Content and Application of the IASB Conceptual Framework

WRITTEN REPORT: -
CONTENT AND
APPLICATION OF THE
IASB CONCEPTUAL
FRAMEWORK

TABLE OF CONTENTS
INTRODUCTION.....................................................................................................................................3
MAIN BODY.............................................................................................................................................3
Purpose of IASB Conceptual Framework................................................................................................3
Content of IASB Conceptual Framework................................................................................................4
Application of IASB Conceptual Framework..........................................................................................5
CONCLUSION..........................................................................................................................................5
REFERENCES..........................................................................................................................................6
APPENDICES...........................................................................................................................................6

INTRODUCTION
The conceptual framework lays down the accounting policies that are to be followed by
the businesses in order to prepare their financial statements within the prescribed format and
presentation. These are developed by the International Accounting Standards Board which assists
and resolves conflicts over the existing accounting standards. This project shall be highlighting
the major purpose that is there for the formulation of these concepts and how this shall be
supporting the various organizations. Apart from that it also shows the contents that are
represented in the conceptual framework and are also to be shown in the financial statements of
the company. Further it demonstrates the application of these concepts in the preparation of the
financial statements thereby depicting true and fair view of the company.
MAIN BODY
Purpose of IASB Conceptual Framework
The International Accounting Standards Board (IASB) has developed the conceptual
framework which lays down the basics that needs to be used by the financial entities for the
purpose of financial reporting. This means that the conceptual framework assists in the
preparation of the financial statements and specifies the various accounting policies that are not
yet covered under the standards of accounting. Also on the basis of these policies under the
conceptual framework the IASB has been findings ways to develop the IFRS. So that the IFRS
can be used when there are conflicting theories under the conceptual framework.
The most significant purpose of conceptual framework is that it shows the way to apply
the various accounting standards that are formed to prepare the financial reports. These financial
reports are significant to the company in order to disclose their financial health and well-being in
front of the various users of such information (Van Mourik and Katsuo Asami, 2018). This helps
in maintaining the consistency among all the entities as they follow the similar formats,
accounting standards, policies to support the recording of the transactions. Also the conceptual
framework has been playing major role in solving the various accounting conflicts that arise due
to lack of availability of the standards of accounting. There are several events or the business
transactions regarding which proper information or explanations are not provided under the
prescribed accounting standards, the clarifications regarding that are also provided under the
conceptual framework that is developed by IASB authorities.
One of the most advantageous purpose that is solved by this conceptual framework is that
it has created a universal way of preparing the financial statements and so all the similar
accounting transactions are treated in similar manner by all the financial entities. This has also
facilitated the process of comparative analysis among the various business competitors in the
market or the inter departmental comparisons to grow the profitable segments and shut down the
loss making ventures of the business (Walton, 2018). It has also sorted to develop and highlight
the national and the international accounting standards of the company that can provide
assistance and support to the financial managers.
The development of the conceptual framework and the universally accepted principles
has solved one more purpose of the internal and the external users of the financial information