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Hi Mike,
I’m a little confused about the relationship between conceptual framework and IFRS.
I read this sentence off the BPP study text:
“The conceptual framework is not an IFRS and so does not overrule any individual IFRS. In the rare case of conflict between an IFRS and the conceptual framework, the IFRS will prevail.”What exactly is the conceptual framework? I have always thought that the Conceptual framework consisted of all the IFRS till now. I’ve tried reading several articles on it but still couldn’t understand what exactly a conceptual framework is.
Here’s the overview:
“Definition of conceptual framework
In financial reporting, a conceptual framework is a theory of accounting prepared by a standard-setting body against which practical problems can be tested objectively.
A conceptual framework deals with fundamental financial reporting issues such as the objectives and users of financial statements, the characteristics that make accounting information useful, the basic elements of financial statements (e.g., assets, liabilities, equity, income, and expenses), and the concepts for recognising and measuring these elements in the financial statements.”
So, there you have it!
The Framework is a generalised set of ideas around which the IFRS are based but where (exceptionally) an IFRS differs from the framework, the IFRS shall prevail
This should happen more and more rarely in the future
Hi
I was wandering if someone can help.
I am confused between bpp material and what’s on here.
Bpp says divided into 4 chapters
1. The objective of general purpose financial reporting
2. The reporting entity – to be added by IASB at a later date
3. Qualitative characteristics
4. Framework for the preparation of financial statements, includes underlying assumptions, elements of financial statement, recognition and measurement.Whilst open tuition says says 7 chapters
1. The objective of general purpose financial reporting
2. underlying assumptions
3. Qualitative characteristics
4. elements of financial statement
5. recognition
6. measurement
7. Capital maintenanceI am not sure which to go by?
Thanks
Try this link and see what you think
https://www.iasplus.com/en/standards/other/framework
and then let me know
You’re wrong!
the course notes do NOT say that there are 7 chapters!
The notes actually say (page 4)
Framework contents
• objectives of financial statements
• underlying assumptions ( accruals and going concern )
• qualitative characteristics ( see next )
• elements of financial statements (assets, liabilities, equity, income, expenses and capital maintenance)
• recognition of the elements
• measurement
• concept of capital and capital maintenance
The word “chapter” is NOT mentioned
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