Conceptual framework for financial reporting · 2006. 1. 29. · Intermediate accounting:...

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Conceptual framework for financial reporting

At the first level, the objectives identify the goals and

purposes of financial accounting and are the building blocks

for the conceptual framework.

At the second level, are the qualitative characteristics that

make financial accounting information and the elements of

financial statements.

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At the third level are the measurement and recognition

concepts that accountants use in establishing and applying

financial accounting standards.

These concepts include assumptions, principles, and

constraints that describe the present reporting environment.

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Exercise

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Qualitative criteria

Qualitative criteria are criteria that, in conjunction with the

organisation’s objectives, are used to evaluate possible

measurement options and to choose the most appropriate

accounting policies. There are trade-offs among the various

criteria, especially between relevance and reliability.

Exercise

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