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Chapter 2: Q.2-31FRS (page 76)

Question: What are some of the differences in elements in the IASB and FASB conceptual frameworks?

Short Answer

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Answer

The IASB conceptual framework focus on the creation of financial statements as it looks up toaccomplish the requirements of all the shareholders. Whereas FASB targets financial reporting as its purpose is to provide aid to the investors.

Step by step solution

01

Meaning of Conceptual Framework

A conceptual framework is a linear representationthat assists in demonstrating the estimated relationship between cause and effect in a financial situation.

02

Differences in elements in the IASB and FASB conceptual frameworks

Differences between International Accounting Standards Board (IASB) and Financial Accounting Standards Board (FASB) include:

  • The International Accounting Standards Board (IASB) emerged on April 1, 2001. On the other hand, the Financial Accounting Standards Board (FASB) emerged in 1973.
  • The International Accounting Standards Board (IASB) is situated in London. While Financial Accounting Standards Board (FASB) is situated in the United States.
  • The International Accounting Standards Board (IASB) deals with the advancement of International Financial Reporting Standards and encourages the use of these standards. However, Financial Accounting Standards Board (FASB) is a non-profit entity that serves the advancement of Generally Accepted Accounting Principles (GAAP) in the general interest.
  • The International Accounting Standards Board (IASB) is also known as the beneficiary of the International Accounting Standards Committee. While the Financial Accounting Standards Board (FASB) was substituted by the Accounting Principles Board (APB) and the Committee on Accounting Procedure (CAP).

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Most popular questions from this chapter

BE2-1 (L03) Match the qualitative characteristics below with the following statements. 1. Relevance 5. Comparability 2. Faithful representation 6. Completeness 3. Predictive value 7. Neutrality 4. Confirmatory value 8. Timeliness (a) Quality of information that permits users to identify similarities in and differences between two sets of economic phenomena. (b) Having information available to users before it loses its capacity to influence decisions. (c) Information about an economic phenomenon that has value as an input to the processes used by capital providers to form their own expectations about the future. (d) Information that is capable of making a difference in the decisions of users in their capacity as capital providers. (e) Absence of bias intended to attain a predetermined result or to induce a particular behavior.

Expenses, losses, and distributions to owners are all decreases in net assets. What are the distinctions among them?

What is a conceptual framework? Why is a conceptual framework necessary in financial accounting?

Selane Eatery operates a catering service specializing in business luncheons for large corporations. Selane requires customers to place their orders 2 weeks in advance of the scheduled events. Selane bills its customers on the tenth day of the month following the date of service and requires that payment be made within 30 days of the billing date. Conceptually, when should Selane recognize revenue related to its catering service

Question: Which of the following statements about the IASB and FASB conceptual frameworks is not correct?

  1. The IASB conceptual framework does not identify the element comprehensive income.
  2. The existing IASB and FASB conceptual frameworks are organized in similar ways.
  3. The FASB and IASB agree that the objective of financial reporting is to provide useful information to investors and creditors.
  4. IFRS does not allow use of fair value as a measurement basis.
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