Textbook Notes (368,217)
Canada (161,710)
MGAB01H3 (126)
Liang Chen (50)
Chapter 2.1

chapter 2.1

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Financial Accounting
Liang Chen

Chapter 2 Conceptual Framework of Accounting The conceptual framework of accounting is a coherent system of inter-related objectives and fundamentals that can lead to consistent standards and that prescribes the nature, function, and limits of financial accounting statements. Conceptual framework ensures that existing standards and practices are clear and consistent, makes it possible to respond quickly to new issues, and increases the relevance, faithful representation, comparability, and understandability of financial reporting results. It is impossible to create a rule for every situation; therefore there are general principles rather than specific rules. The international accounting standards board (ISAB) was formed to try to reduce the lack of uniformity with other governments. The conceptual framework of accounting has four main sections: the objective of financial reporting, the qualitative characteristics of accounting information, the elements of financial statements, and recognition and measurement criteria. The Objective of Financial Reporting The main objective of financial reporting is to provide information that is useful to individuals wh
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