identification of a set of (ideally mutually exclusive and collectively exhaustive) criteria to be used in choosing between alternative solutions to standard setting problems in assessing the quality and utility of financial reports
Conceptual frameworks
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Definitions

“A conceptual framework is a constitution, a coherent system of interrelated objectives and fundamentals that can lead to consistent standards and that prescribes the nature, function and limits of financial statements.” FASB “A basic structure for organising one’s thinking about what one is trying to do and how to go about it” Macve

Some conceptual frameworks

FASB conceptual framework project The Corporate report - ASC Guidelines for financial reporting standards - The Solomon’s report to ICAEW Framework for the Preparation and Presentation of Financial statements - IASC Making Corporate Reports Valuable - ICAS Statement of Principles - ASB

Elements of a conceptual framework

general agreement on the overall objectives of financial reporting

general agreement on the nature and needs of the various users of financial reports
Readings


Elliot and Elliot chapter 10 Deegan and Unerman chapter 6 Perks, Accounting and Society, chapter 7 (in library key texts)


Seminar on conceptual frameworks


What is the need for a conceptual framework What are the benefits and limitations of a conceptual framework


Statement of principles

objectives and users of financial statements attributes of financial statements that enable them to fulfil their purpose - qualitative characteristics elements that make up financial statements what items are to be recognised in financial statements how net resources, performance and changes in these are to be measured how items can be best be presented nature of the reporting entity