Learning Objectives LO 1 Describe the conceptual framework

Learning Objectives LO 1 Describe the conceptual framework for financial reporting. LO 2 Identify factors that can influence a country’s accounting standards. LO 3 Identify the role that the IASB intends to play in the establishment of uniform worldwide accounting standards. LO 4 Identify the direction that the FASB intends to follow for public companies. © 2013 Mc. Graw-Hill Ryerson Limited Chapter 1 Slide 1

LO 1 The Conceptual Framework for Financial Reporting Document in the CICA Handbook just prior to the IFRS’s in Part 1. Main items include • The objective of general-purpose financial reporting • Qualitative characteristics of useful financial information • Underlying assumptions • Definition, recognition, and measurement of the elements of financial statements All accounting practices should be traceable back to and supported by the conceptual framework. © 2013 Mc. Graw-Hill Ryerson Limited Chapter 1 Slide 2

LO 1 The Conceptual Framework for Financial Reporting Professional judgement is required in order to apply the basic principles and concepts of The Conceptual Framework in order to provide useful information to make decisions. Use judgement to provide a fair representation of the financial position and the financial performance of the entity. © 2013 Mc. Graw-Hill Ryerson Limited Chapter 1 Slide 3

LO 1 The Conceptual Framework for Financial Reporting There are three main areas where judgement needs to be applied: • Choice of appropriate accounting policies • Making accounting estimates eg. tangible asset life, effective hedging strategy, asset impairment • Disclosure in the notes to the financial statements (what to disclose, disclosure details – how much disclosure. ) © 2013 Mc. Graw-Hill Ryerson Limited Chapter 1 Slide 4