Conceptual Framework for Financial Reporting: Present Content and Nuances

Financial Reporting
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Table of Contents
Introduction................................................................................................................ 3
Present content of conceptual framework..................................................................3
Objective of financial reporting...............................................................................3
Qualitative features of useful financial information.................................................3
Financial statements and reporting entity...............................................................4
Financial instruments as components of financial statement..................................4
Recognition and de-recognition............................................................................... 5
Measurement.......................................................................................................... 5
Presentation and disclosure.................................................................................... 5
Recognition of nuance of the issue............................................................................. 5
Reference :................................................................................................................. 6
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Introduction
Financial reporting is the backbone to judge the economic condition of any entity. This reporting
is used by different stakeholders of the organization to understand the financial condition of the
said organization to ensure proper action by the stakeholders related to that organization in
future. Conceptual framework is set by the global regulatory bodies of accounting to set
standardized platform to report financial performances of any organization with proper
identification of characteristics of the financial information followed by proper disclosures. This
report will emphasize on the present theories of conceptual framework set with nuances of these
issues in respect of its application for the entity reported.
Present content of conceptual framework
Conceptual framework is set by global accounting regulators like IASB and the application of
this framework is being taken care by International Financial Reporting Standard (IFRS). As per
demand of the situation, IFRS practices modification and alternation of present set of conceptual
framework for financial reporting to ensure prudent and logical financial reporting for the
stakeholders with the basic objective to set global standard of financial reporting to serve
stakeholders of any business entity globally.
To identify present content of conceptual framework, we have to understand and analyze
different factors of financial reporting.
Objective of financial reporting
Objective of financial reporting is to help the stakeholders to decide about their future decisions
with the business entity for different aspects. Broadly, the commercial operations like buying,
selling, providing services and finding favorable outcome from the operation of the business are
the main objectives of the stakeholders. To help them to decide on these issues, financial
reporting facilitates the purpose with globally acclaimed financial reporting system. 1
Qualitative features of useful financial information
Conceptual framework is set to establish a globally acceptable accounting policy with assurance
of prudence to the stakeholders and easily understandable mode of financial reporting. Main
1 IFRS, ‘ Conceptual Framework for Financial Reporting’ ; (March 2018, PP 1-20)
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