Summary FAC2601 Learning Unit 2- Additional notes.docx

Learning Unit 2


Conceptual Framework for Fin Reporting:
Describe the objective of, & the concepts for, general purpose fin reporting & the
purpose is to –
- Assist the International Accounting Standards Board (IASB) to develop
International Financial Reporting Standards (IFRS) based on consistent
concepts
- Assist preparers to develop consistent accounting policies when no
Standard applies to particular transaction or other event, or when
Standards allows a choice of accounting policy &
- Assist all parties to understand & interpret the Standards


Conceptual Framework for Financial Reporting:
- Not a Standard, don’t override any Standards or any requirement in a
Standard – may be revised based on IASR’s experience of working with it
- March 2018 – comprehensive set of concepts for fin reporting issued –
effective date of 1 January 2020 with earlier application permitted


Conceptual Framework addresses:
- Objective of general purpose fin reporting
- Qualitative characteristics of useful fin info
- Fin statements & reporting entities
- Elements of fin statements
- Recognition & derecognition
- Measurement
- Presentation & disclosure
- Concepts of capital & capital maintenance


The main changes:
1. Concepts of measurements – incl. factors considered when selecting
measurement basis
2. Concepts on presentation & disclosure – incl. when to classify income &
expenses I other comprehensive income
3. Guidance on when A & L are removed from fin statements


Updated:
- Definitions of A & L
- Criteria fir incl. A & L in fin statements




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