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I am reading the “Conceptual Framework” chapter in the BPP workbook.
It reads:
”It is not clear that a conceptual framework makes the task of preparing and then implementing standards any easier than without a framework.”
This is mentioned as a disadvantage.
How is this a disadvantage? Should not they construct accounting standards on a rules-based approach and simply find out?
Hi,
We are using a principles based approach to IFRS and so by having something that does not give specific rules can cause difference on areas of judgement, so potentially a disadvantage but not a significant one.
I’d be more aware that IFRS are based on principles (guidance) as opposed to rules as is the case with US GAAP.
Thanks
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