chapter  1
12 Pages

Conceptual Framework for International Financial Reporting Standards VICTORIA KRIVOGORSKY

The importance of cross-sectional comparability of fi nancial statements in the facilitation of decision making has been addressed in accounting literature for many years. In this vein, uniformity among fi nancial statements, which implies the presentation of fi nancial statements being invariant among different fi rms worldwide with regard to several principles, which desirably include accounting procedures, measurements, concepts, classifi cation, and methods of disclosure. It was with this idea in mind that the International Accounting Standards Committee (IASC)1 was created in 1973 as a body independent of government and pseudo-government control, with the stated purpose of enhancing the accounting profession worldwide and the main goal of generating a single set of international accounting standards. Contemporaneously with these developments the advent of a conceptual framework for international fi nancial reporting became essential; and such a conceptual framework is considered to be an assembled body of interconnected basic accounting principles guiding the formulation of standards on a consistent basis as opposed to the ad hoc manner that was often used previously.