Beruflich Dokumente
Kultur Dokumente
BSA - 134
assembles the theories that determine how financial statements are prepared
and presented
helps users in making economic decisions
different entities have different ways of reporting their financial information so
the Conceptual Framework helps reducing these differences by coordinating
regulations, accounting standards, and procedures that have to do with how
financial statements are prepared and presented
if there is disagreement between the Conceptual Framework and an accounting
standard (from the Philippine Financial Reporting Standards or International
Financial Reporting Standards), the accounting standard will be followed
the Conceptual Framework is being revised in order to minimize conflicts
between it and other accounting standards
aids: the International Accounting Standards Board in the progress and review of
IFRS and in reducing differences in regulations and accounting standards and
procedures present in the presentation of financial statements, national
standards boards in expanding national standards, preparers of financial
statements in the application of IFRS, auditors checking if the financial
statements match up with IFRS, users of financial statements in understanding
the information in financial statements, and give information about how IASB
created the IFRSs
financial statements are also called general purpose reports because they are
usually common information needs for users who cannot ask for their particular
information needs
financial statements are primarily used by investors, lenders, and other creditors
in order to figure out if they should give resources to the
enterprise/department/administration but are also used by employees who care
about how stable and profitable their employer can be, the government to
regulate the entitys activities and taxation, and the public who use information
about trends, developments and the activities of the firm
investors make decisions about buying or selling equity depending on what they
get out of it
the common needs of all the users are to assess the companys liquidity (the
fact of having cash or cash equivalents), solvency (ability to pay debts as they
are due), profitability (generating profit using existing assets), and operating &
financial flexibility (ability of company to react to unplanned expenses)
Qualitative Characteristics: