Conceptual Framework for Accounting and Accounting Professionals
Conceptual Framework for Accounting and Accounting Professionals
- In preparing and presenting the company’s financial statements, management has the flexibility to choose alternative accounting principles or methods that are intended to accurately reflect the economic condition of the company in connection with business operations and transactions. For that, we need a reference in accounting practices in preparing and presenting its financial statements. The basic framework of accounting and financial reporting defined as intent to broadly define the objectives, terms and concepts relating to accounting practices that ultimately is needed to determine the scope and boundaries of accounting and financial reporting.
- The framework includes the following. (1) The purpose of these financial statements. (2) basic assumptions. (3) qualitative characteristics of financial statements. (4) Elements of financial statements. (5) Recognition and measurement of financial statement items. (6) The concept of capital and capital maintenance.
