THE FRAMEWORK FOR THE PREPARATION AND PRESENTATION OF FINANCIAL STATEMENTS
The International Accounting Standards Board (IASB) is responsible for the setting of International Financial Reporting Standards (IFRS) in accordance with their ‘Framework for the Preparation and Presentation of Financial Statements’ hereinafter referred to as the ‘Framework Document’. The objective of the Framework Document is to set out the concepts that underlie the preparation and presentation of financial statements for external users as set out in the Framework. It is important at the outset to understand that the Framework Document itself does not have the force of an accounting standard — its primary purpose is to assist the IASB in developing new or revised accounting standards and to assist preparers of financial statements in applying accounting standards and dealing with the issues not covered by accounting standards. It is worth noting that where there is conflict between the Framework Document and an accounting standard, the standard will prevail. In addition the Framework Document:
- Assists the IASB in promoting global harmonisation and providing a basis for reducing the number of alternative accounting treatments permitted by international accounting standards.
- Assists national standard-setting bodies in developing national standards.
- Assists users of general purpose financial statements in interpreting the information contained in them.
- Assists auditors in forming an opinion as to whether ...