Conceptual Framework
An Assignment on Conceptual Framework of Accounting
An Assignment on Conceptual Framework of Accounting
Course Name: Financial Accounting-II
Course Title: MGT-204
Submitted By:
Md. Nazrul Islam
ID#2340
2nd Batch
Department of Management Studies
Submitted To:
AKM Anisuzzaman
Lecturer,
Dept of Accounting & Information Systems
Jahangirnagar University,
Savar, Dhaka
Date of Submission:____May 2013
Conceptual Framework:
A conceptual framework establishes the concepts that underlie financial reporting. A conceptual framework is a coherent system of concepts that flow from an objective. The objective identifies the purpose of financial reporting. The other concepts provide guidance on (1) identifying the boundaries of financial reporting; (2) selecting the trans-actions, other events, and circumstances to be represented; (3) how they should be recognized and measured; and (4) how they should be summarized and reported.
Why do we need a conceptual framework? First, to be useful, rule-making should build on and relate to an established body of concepts. A soundly developed conceptual framework thus enables the FASB to issue more useful and consistent pro-enouncements’ over time; a coherent set of standards should result. Indeed, without the guidance provided by a soundly developed framework, standard-setting ends up being based on individual concepts developed by each member of the standard-setting body. The following observation by a former standard-setter highlights the problem. Second, as a result of a soundly developed conceptual framework, the profession should be able to more quickly solve new and emerging practical problems by refer-ring to an existing framework of basic theory. Development of a Conceptual Framework:
In 1976, the FASB began to develop a conceptual framework that would be a basis for setting accounting rules and for resolving financial reporting controversies. The FASB has since issued seven Statements
An Assignment on Conceptual Framework of Accounting
Course Name: Financial Accounting-II
Course Title: MGT-204
Submitted By:
Md. Nazrul Islam
ID#2340
2nd Batch
Department of Management Studies
Submitted To:
AKM Anisuzzaman
Lecturer,
Dept of Accounting & Information Systems
Jahangirnagar University,
Savar, Dhaka
Date of Submission:____May 2013
Conceptual Framework:
A conceptual framework establishes the concepts that underlie financial reporting. A conceptual framework is a coherent system of concepts that flow from an objective. The objective identifies the purpose of financial reporting. The other concepts provide guidance on (1) identifying the boundaries of financial reporting; (2) selecting the trans-actions, other events, and circumstances to be represented; (3) how they should be recognized and measured; and (4) how they should be summarized and reported.
Why do we need a conceptual framework? First, to be useful, rule-making should build on and relate to an established body of concepts. A soundly developed conceptual framework thus enables the FASB to issue more useful and consistent pro-enouncements’ over time; a coherent set of standards should result. Indeed, without the guidance provided by a soundly developed framework, standard-setting ends up being based on individual concepts developed by each member of the standard-setting body. The following observation by a former standard-setter highlights the problem. Second, as a result of a soundly developed conceptual framework, the profession should be able to more quickly solve new and emerging practical problems by refer-ring to an existing framework of basic theory. Development of a Conceptual Framework:
In 1976, the FASB began to develop a conceptual framework that would be a basis for setting accounting rules and for resolving financial reporting controversies. The FASB has since issued seven Statements