MGT220H5 Chapter 2: Chapter 2 (Conceptual Framework Underlying Financial Reporting) - MGT220 (2018)
Document Summary
Like a constitution; it"s a coherent system of interrelated objectives & fundamentals that can lead to consistent standards and that prescribes the nature, function, and limits of financial accounting & statements. there"s no universally accepted conceptual framework. Standard setting should build on an established body of concepts & objectives. This allows for useful, consistent & coherent standards over time. The framework should increase understanding, confidence & comparability. It should help with solving new practical problems. To communicate information that"s useful to investors, creditors & other users. It"s helps on deciding on how to allocate resources (including assessing management stewardship). These basic statements give information that meets the needs of key users. Statements are intended to provide the most useful information possible in a manner whereby benefits exceed costs to the different kinds of users. The general objective of accounting is providing information that has decision usefulness (information that"s useful for decision-making purposes).
