ACCA FR Syllabus A. The Conceptual And Regulatory Framework - What is meant by a conceptual framework of accounting - Notes 1 / 8
Accounting standards need to be built on a reliable set of concepts
The Conceptual framework is
a framework for setting accounting standards
a basis for resolving accounting disputes
fundamental principles which then do not have to be repeated in accounting standards
a theoretical basis for determining how transactions should be measured (historical value or current value) and reported
a statement of generally accepted accounting principles (GAAP) for evaluating existing practices and developing new ones
Who else is the framework useful to?
Auditors
Users of accounts
Anyone interested in how IFRS's are formulated
The Framework is NOT an accounting standard, and if there's a conflict between the two then the IFRS wins
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Is there an alternative system?
Syllabus A. The Conceptual And Regulatory Framework
A1. The Need For A Conceptual Framework