Financial Reporting Framework
The Foundation of Financial Reporting
Financial reporting begins with the conceptual framework established by FASB. Financial statements are designed to provide relevant, faithfully represented information that helps investors, creditors, and other users make informed economic decisions.
- Accrual basis accounting.
- Going concern assumption.
- Historical cost and fair value measurement.
- Qualitative characteristics of accounting information.
Summary
Understanding why accounting standards exist makes applying them much easier.