“Conceptual framework Tor — Financial Reporting _ Function _ : ___by Describe _the_obyct ____} Ojective : to provide useful financial infor nehan +r senlés as the Cote, principle in the deve lopment of the Otcounting Standards. —b Eiety candad that wile, devoped by he TASB sh work toward Achicving Provisions that will pesult in financial Statemen’s uscrs with ustful financial infor nation b concepts: the goal here is for there to te a guiding. principles on what concepts Should be applied. : Hote ANthe standards should tye based on the general principles laid_Qut in the frame work. b Turpose_ol tne. Concephuol ftomework = by assis ; Ly the TASB in developing TERS standards by the 1erS_Of financia) reports ——_'_All parties who will pe using the financial statements re | TT Conceptual Frame work Standard Oneeptudl Femework andayd Atonghord ~ Conceptual Framework « slandar 1 work ore not glwa 5g visions of the Conceptal framework ORGS Ih thes enwe hot ‘Stonclat as |(cnaPTeR L ; ) date ive of General. Purpase, Financial Repo =e ide {ivoncial information about the reporting enhity thal is_useful pee in.ttaKing ore Primary Dxising 0 Potential investors 2) \enders and other Creditors cisions about. + buying seling Of holding equity and debt Instruments % Provide or setting logns and other forms of credit & — rata +o vote “= — In fluence ¢ the_entity's €conomic Spee a | 3a Specific infor' mation needs by dividends _ b principal and joderes} —Payments b norkel pice increases sor Of the. amount nd uncertainty of future. Net Cash flows oom of managements tewordship of- he Cntity's economic. respurces, feturn_of investment Vs. return _on_jnvestment — 4 Simpe._poyboack or sinpe pk__b» excess of the Tewuin_of the. amount OF'Qina\ investment invested x wie( a oe ee icone ny fu eet cific information ne jal_Statem # Users or ie ie en Bras dy 1 the economic resources of he enity CA een sets) and the Sloins Against the entity (Liabilities) a ng the Changes of the resources and claims >) the cffectivit jent dischonge their responsibilities fity ss eonoMic resources Nature of General Purpose Financial Reports Ly Do not nd cannot provide al) the information that the primary users need by Focuses on Common information need ‘Not designed for the financial informotion needs of — 2 tcl vs. jens, oa mad nee — thon exact depictions Wh desta Sv Re ahs ofo zr ing entity Going toncern —__ cern t it ig the expectation that Q Company wil) continue i bie fat we[a ) date exer nc Reports fend. Use historical is because this information is_ more ec aeeae Its this canno} be refuted - anes modo cument volue ———__——_ n “afemalion_ohed ‘nalune_and amounts of a reporting eCondmic pesources ang claims + is aes aan solvency for_additiona) freancin —s Of obtaining, needled financin, Priorities and pa en iremeats —3 Datta ma a Ng those with ai rn ? orting enti hy con mic, fesourc nq claims Chan ‘) Financial Performance - assessment of rchurns 2 Iss. ing, Debt or equity instruments —— . a t_effects Of transactions and olner evtnks al Cifcumstances on a reporting entity's economic Hf cua, inf : the periods in which those effects occur, even if the aa COsh_feceipts and ts_ occur eriod. . Ly more (clidiye for I attest L>_tool_on the viabini of on entiby > it wil) gel you evergtni Ng +01 is celevant for q _—_ particular period by in ich sie difficult 40 monipuraie compared to basis Atouttng S parr eee financial Performance ta Lit __# Operational eBicenay : A Past and future abilihy to = cash rors + Reaction 40 the marke) _ aes = Past Cash Flows cee ey ee 4 Gosh Honage meny i hy Other TransGctions one ¥ Capita) wonagement leComrie?) Bualitotive thommcterstics of Useful Financial Tnformavion —Fungomenial ucitative Characteristics 1) Relevance: 2°) faithful_Represcniaton = a Charocterishics 8) Verifiabill 2) Compara ity 3) Undercand ab))ity, ) Timeline Fundamental Bugiitptive Choracterishes ly Mandatory qualities for 4 useful informeion 1 Both Qualities a present _ Enhancing Gualijative Characteristics yon i i 1 Enhonce the information Ly Help financial ctatament ysers to choose between 4wun_useful_in formation Note: No amount of enhancing Qualitative characteristic. can ____flevaie_on informahion ‘as’ being useful if the, fundamen) Qual arve Gualities ALE hot prise GeiloC we The TASB makes sure. thal ‘te Provisions in our standargs _fesul in. information thal possesses. the fundanentol Alito Chavactenstics Gnd the Clondarck also makes sure frat the —thoices or judgements one makes take into ovcount the —tnhancing, guoli tobe charac teristics. The financial statemend users need not Concern themsedwes itp Mes ith He framework because they Can Get information from ne findnclo) reports that hove the fundomenta) Aualitative Characteristics —Fundameniq) Quariiarive Characteristics eine Capabie_of maki ing g diffrence 4 iedictive Value i p Usta in Se ulure Outcomes | —— eee Se ¢ ian owa_ 1€COS} forward- lodking ¥ tela ayer a == information Con be useal A tv confirm past Chohions > band look —Nole: Having onc of tne Wh aos is ¢nougn. Golden,loa doe Materia lit ——»_Considered as a in of “ree vance 2 cauld influence decisions i Ly Possible that_an item may be material fp one enbity bat not ania another a eae Material = Small Company P10, 000 log > Immaicriol » large company Foithful Rey prstnaion b a i resem} the substance of pre aes ihe it purports to represent Bottomline: NO SEGAL OR Tie CL TIMATE TRANSACTIONS 3 flements of Faithful Reprecentation 1) Completeness ly includes gl) the information Aecesrony fix 0 user erst hen omenon ________b description of tne natute bod the asseds_( Account Titks) Ly numerical descriptions of the assets _(Monetory Ampuats) ie | _ eseription of what the nu merica _dtpiction feples ants (Wotes to tne, Finonciol Statements) Note: All of te 4 Statements are monclatory Godaneee ee However, some ascels and jiabilities that reguife_ more, —lnformavion for the depiction 4o be considered ‘complete — here is wha} du need tp acted: Oty eh b explanations of cignifican facks about the guairy Gnd nature of the items _ by factors and circumstances that might affect their quality and nature 1 —__ the proces used to determine. the mymerical Otpiction Note: These are 4o be. used when the Informobon needs more descriptions ang ¢xplanations. 2) Neutrality i Ly Without bias in the selec tion or piccentation of _fingncia) information ’ : +> Nol manipulale to increase the probability that ——_financial_information will ne teceived fowriby or un favorably by Users. ‘y The information should no! influence the penavior ___pf the finoncial Stotemen) ser Prudence Ly the CxeICise_ tion wh ng_j fi unger Conditions Of wncertoinhy gon‘itn te a4 4 Does not mean_accurate inal) respects pial __Ly means that there art no €tfor or Omission_in the Aescription of the prenowenon b the process usc to produce. tre feportea _ information has peste eel with no Crtors in the. process Principle wid Applying the Fundanenial Qualitative Characteristics _ bent an economic Phenom enn ____D iden » form the phenonenon thabis tev on}. 9) delecmine. whet, tnot informohpn ic _avcilaiye ——— fn weit cm_ pani fia epson _ Of Int. economic. pro Li i!) Enchontng Quaitne. haucttihes “fig? acs iffetemt knowledgapie and independent — ths ona ent A ——)_nok_necessori; agement — 2 adgicion of aa (plecentation —Ltypes_of Verification Ditect’ Verification ——_!.medns Verifying on epresetalion through ditect observati it. Cash Coun Indirect verification b> Checking inputs 4a model, formuig pr other techmigue_and recalculating the output using. the same_metnodora, — helps your information to be a faitnfu) represenk fon ted UI She —_ Note: Quant fied information need nod 40 be a ci gic point 2 estimate for it 40 be Considered yerifigbe” ‘a x GodinComporobili reli S10 hi ee i Lig the Qualitative Chavocleristic that enables users fo identify ang understand similarities. ag aaa among items. Consicten ty the we of the dame methods procedures aad ofner policies thtoughau} pultiple periods Uniformity by unifor im_Wnchods, procedwes, and olter Policies _ fn aNd year Out b even though he trait a comporaritiny i is desivahe, we.do nor Sacrifice e thee for the cake of np b Note: Componaby ity. 15 the goo while Consistency) is tne means tpwariA dchieving Comparability Undetslondabiliy » Classifying, charactenizin iCsemin mhahon clearly ond concisely makes it unders Nh _& we do not sacrifice tie completeness of the. fi tne valve of forthfu) teprestntation for tHe sake i. yngking the i ! understandabie ' 15 We don’t make i} undcrstondob. jo everyone, we oF least ed. fone unecstacb ses at aff kale Omics. g aeC __) ime liness, _ __ 12 Means having information availobie tp decision makers in time — ———4o_be_copale of influencing their decisions. — ——__— = sail ati seful it wil) be — Ossess trends. Ly We shoi ide informal it_foses yaluc [v: