Introduction IASB frame work

The Framework lays out the purpose, status and scope of the document and sets out the concepts that underlie the preparation and presentation of financial statements for external users.

Purpose and Status

• The purposes of the Framework: –
• Assist the board to develop future IFRS and in its review of existing IFRSs
• Assist the board in harmonization of regulations, accounting standards and procedure relating to the preparation and presentation of financial statements.
• Assist national standard setting bodies to develop national standards
• Assist in preparation of financial statements and dealing with items not covered by the IFRS yet
• Assist auditors in forming opinion whether the financial statements give a true and fair view
• Assist users in interpreting the financial information
• Assist in understanding the approach followed in the preparation of IAS
• The Framework and IFRS do not override any individual IAS.

Scope of Framework

The framework deals with the following: –

• The objective of financial statements
• The qualitative characteristics that determines the usefulness of financial statements
• The definition, recognition and measurement of the elements of financial statements
• Concepts of capital and capital maintenance

The framework is concerned with the general-purpose (commercial, industrial, business, public or private sector) financial statements but it can be applied to other types of accounts. A complete set of financial statements includes.

• A balance sheet
• An income statement
• Statement of changes in equity
• A statement of changes in financial position (cash flow statement); and
• Notes, other statements and explanatory material