Conceptual Framework
Recognition
Reliably measured
Probable
Meet definitions
Cost Constraints & Assumptions
transactions are recognised when they occur
periods to which they relate
continue to be in operation indefinitely
Benefits > Costs
Objective of FR
Provide FR
Users
provide resources
Measurement
5 elements
Expense
decreases in economic benefits
Income
increases in economic benefits
during an accounting period
an increase in equity
Equity
residual interest
in the entity’s assets after deducting its liabilities
Liability
present obligations
outflow of economic benefits
Asset
economic resources controlled
future economic benefits
Qualitative Charateristics
Enhancing
Understandability
classifying, characterising and presenting information clearly and concisely
Timlineness
available to decision-makers in time
Verifiability
Consensus of Different knowledgeable and independent observers
Subtopic
Comparability
similarities in, and differences among, items
Fundamental
Faithful representation
complete, neutral and free from error
Relevance
Difference in decision making
Objective
improve FR
