IASB CONCEPTUAL FRAMEWORK FOR FINANCIAL REPORTING

IASB (2008) defines relevance as the ability to make a difference concerning the decision users make as it pertains to their capacity as capital providers. Relevance can be operationalised based on their predictive and confirmatory value (Elliott & Elliott 2008, p. A predictive value refers to information addressing the ability of a firm to generate a reliable future cash flow while a confirmatory value confirms or change the present or past expectations of a firm based on the previous assessment (IASB, 2008). Faithful presentation the financial information purports to represent is characterized by completeness, neutrality, and error-free. According to Van Beest, Braam and Boelens (2009), freedom from bias, unqualified audit report, neutrality, and corporate governance statement all constitute proxies used to measure faith representation. These principles are regarded as “Conceptual Framework.

” Therefore, a conceptual framework can be defined as a statement of widely acknowledged principles that act as a foundation of accounting statement utilized in a variety of business transactions (Elliott & Elliott 2008, p. One of the functions of the conceptual framework is that it serves as a reference point for both the user and individuals preparing financial statements. As a reference point, a conceptual framework helps financial statement preparers to ensure that the standards of accounting used conform to a consistent approach of reconciling issues rather than representing responses that that seek to address accounting issues on a piecemeal basis. Additionally, it facilitates the establishment of consistent and coherent accounting standards by IASB. iasplus. com/en/meeting-notes/iasb/2008/agenda_0812/agenda1083 [Accessed 21 Dec.