Conceptual Framework Essay

1051 Words5 Pages
What is Conceptual Framework ? The project of conceptual framework was undertaken keeping in mind certain objectives to attain, that is, to generate a sound foundation for accounting standards for upcoming period of time which are based on principles, internally frequent and globally converged. IASB & FASB jointly govern the new framework. The objectives of Conceptual Framework project is to consistently update and process the present concepts to affect the changes in markets, economic environment and business practice which were developed before one or two decades ago. The IASB has redefined portions of its framework; on the other side the FASB has issued ‘Concepts Statement 8’ to replace ‘Concepts Statements 1 and 2’. How favorable establishing conceptual framework would it be? The Conceptual Framework gives a better knowledge of accounting while interpreting the given data. In addition to this, the Conceptual Framework is aimed at many other benefits including the following: a) The Conceptual Framework brings in synchronization and harmony by presenting a basis for choosing the most suitable accounting treatment acceptable by the financial accounting standards. b) The Conceptual Framework could works as a guide for the advancement of financial accounting Standards for the unforeseen period. c) The Conceptual Framework helps in coordinating events, trading transactions, tough conditions or obstacles occurred, those which were not dealt by financial accounting standard developed by AAOIFI. d) The Conceptual Framework helps users in interpreting data of financial reports, enclosed in financial statements prepared in conformity with financial accounting standards. IASB & FASB International Accounting Standard Board was duly founded by IFRS foundation. It is the self-governing standard-setting body which consists of 15 full
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