Acca financial Accounting (FA) Study Text ac ca (FA)

 

 

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Introduction to financial reporting 

10

 

KAPLAN PUBLISHING

 

The purpose of the Framework 

The purpose of the Framework is to assist the IASB in the development of 

financial reporting standards and to assist preparers of financial statements to 

develop accounting policies when reporting standards do not provide sufficient 

guidance, or where there is a choice of accounting policy. 

It is also a useful reference document to assist in understanding and 

interpreting reporting standards. 

The objective of financial reporting 

The main objective is to provide financial information about the reporting entity 

to users of the financial statements that is useful in making decisions about 

providing economic resources to the entity, as well as other financial decisions. 

Prudence 

Prudence is the exercise of caution when making judgements under conditions 

of uncertainty. The helps to ensure that assets and income are not overstated in 

the financial statements, and that liabilities and expenses are not understated.