Conceptual Framework in Accounting: Objectives, Benefits, Prudence, and Substance over Form

Conceptual Framework
The conceptual framework or the statement of concepts
refers to the body of interrelated fundamentals and
objectives. The objectives help in the identification of
the goals and need for financial reporting and the basic
concepts are the concepts, which help in the
achievement of those objectives. Such concepts provide
assistance in the selection of the transactions, events
and the circumstances to account, how can they be
summarised as well as reported (ifrs.Org. 2019).

Benefits from a Conceptual Framework
The benefits of the Conceptual Framework are that, it
provides the Financial Accounting Standards Boards
with the foundation for the setting of standards and
the concepts to use as techniques for the resolving of
the accounting and reporting questions. Further more
it gives a basic answering on which to take into
consideration the benefits of the alternative solutions
to the complex financial accounting on the reporting
of the problems.

Criticisms to the Current Accounting Framework
The Conceptual Framework has been surrounded by certain
limitations. The primary criticism that it has been going through is
difficulty in its establishment. It is a very time consuming and an
expensive framework, which is not possible for the firms to use.
Further more, the conflict that may arise among the framework
and the various standards of accounting.