Professional Documents
Culture Documents
A161
THE CONCEPTUAL FRAMEWORK
FOR FINANCIAL REPORTING
aa coherent
coherent (comprehensible)
(comprehensible) system
system of
of
interrelated
interrelated objectives
objectives and
and fundamentals
fundamentals
that
that is
is expected
expected to
to lead
lead to
to consistent
consistent
standards
standards and
and that
that prescribes
prescribes (recommends)
(recommends)
the
the nature,
nature, function
function and
and limits
limits of
of financial
financial
accounting
accounting and
and reporting.
reporting. (FASB)
(FASB)
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Coherent (comprehensible)
Problems
lack
of a general theory
Permissiveness
Inconsistency
of practices
defense
Therefore;
Solomons
Benefits:
consistent,
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the
the objective
objective of
of general
general purpose
purpose
financial
financial reporting
reporting is
is to
to provide
provide
information
information to
to users
users that
that is
is useful
useful in
in
making
making and
and evaluating
evaluating decisions
decisions about
about
the
the allocation
allocation of
of scarce
scarce resources.
resources.
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1.
2.
a)
i.
ii.
iii.
iv.
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b)
c)
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d.
e.
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iii.
iv.
V.
VI.
VII.
SUMMARY
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OBJECTIVES OF CONCEPTUAL
FRAMEWORKS IN PICTORIAL
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CRITIQUE OF CONCEPTUAL
FRAMEWORK PROJECTS
A CRITIQUE OF CONCEPTUAL
FRAMEWORK PROJECTS
Help in explaining reasons for the slow development
of the CF & highlights issues relevant to achieving
progress in the current IASB/FASB project.
Two approaches; scientific & professional approach.
Scientific
Professional
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CIRCULARITY (COMPLEXITY) OF
REASONING
Objective
of a conceptual framework
is to guide the everyday practice of
accountants
Its
AN UNSCIENTIFIC DISCIPLINE
Until
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Accounting
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Provide
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POSITIVE RESEARCH
Basic
Both
SUMMARY OF CRITIQUE ON CF
PROJECT
Professionals
values
STANDARD SETTING
Began with formation IASC in London in 1973.
Committee comprised representative professional
accounting bodies in 9 countries
The aims to develop accounting standard for private sector
for the used of countries throughout the world.
They were adopted & used for the development of
accounting standards
National accounting standard reflected the orientation
arising from code law legal framework & tax based
accounting systems.
Companies used IAS to provide additional information for
capital market participants in a more transparent &
comparable manner.
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ACCOUNTING REGULATION IN AN
INTERNATIONAL CONTEXT
IOSCO (International Organization of Securities
Commissions) 1974
In 2005, the European Commission to adopt IASB
standards
international harmonization
Convergence (IASB + FASB)
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THEORIES OF REGULATION
Three views of regulatory activity
public interest theory overview
Application
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regulatory
capture theory
private-interest
theory
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THE MALAYSIA CF
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CONCEPTUAL FRAMEWORK
The Conceptual Framework was issued by MASB
in November 2011.
The Conceptual Framework is applicable for the
preparation and presentation of financial
statements in accordance with MFRS framework
or FRS framework.
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QUALITATIVE CHARACTERISTICS OF
USEFUL
FINANCIAL INFORMATION
Fundamental qualitative characteristics
Relevant financial information is capable of making a difference in
the decisions made by users. Information may be capable of making a
difference in a decision even if some users choose not to take
advantage of it or are already aware of it from other sources.
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ENHANCING QUALITATIVE
CHARACTERISTICS
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MASB
1.
2.
3.
4.
5.
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RELEVANT ARTICLES
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