BU387 Chapter Notes - Chapter 2: Financial Statement
Document Summary
Why is a conceptual framework necessary: to by useful, standard seing should build on an established body of concepts and objecives. Useful and consistent standards can be addiionally added over ime. The following diagram shows an overview of a conceptual framework. At the irst level, the objecives idenify accouning"s goals and purposes: these are the conceptual framework"s building blocks. At the second level are the qualitaive characterisics that make accouning informaion useful and the elements of inancial statement (assets, liabiliies, equity, revenues, expenses, gains and losses). At the third and inal level are the foundaional principles used in establishing and applying accouning standards. First level: the why goals and purposes of accouning. Second level: bridge between levels 1 and 3.
