ABSTRACT
Everyone agrees that accounts must be useful: accounting is not an end in itself, it must serve some purpose. From this viewpoint, the elements of defining a conceptual framework for accounting have been argued to be as follows: 1
Identify the potential users of accounts (either as individuals, or more commonly grouped by some common interest) who are to be served.
For each user or group, identify the decisions they have to take, and the factors relevant to their decisions.
For each decision, identify the accounting information that can be provided and how it will be useful to them in assessing those factors.
In each case, compare the benefits of providing the accounting information with the costs of doing so, since in choosing between alternative types of information to provide (e.g. between different accounting disclosures, or different accounting methods) one will wish to choose the alternative which has the greatest value, i.e. the greatest benefit in excess of cost.
