Reflective Learning Journal Assignment For Conceptual Framework Application In Accounting

Question:

How has your understanding of the conceptual framework in accounting evolved throughout this assignment?

Answer

Introduction: The board or the organization's conceptual framework defines the nature and operation of the firm's accounting function. A conceptual framework is required for determining the hypothetical and conceptual issues that are related to the company's financial reporting system and, as a result, will need a proper and logical foundation. This foundation will help the company strengthen the maturity of the accounting standards.

In many instances, conceptual framework wins out, because it is made expressly for financial reporting. It might be described as the declaration that the company uses to maintain data records, evaluate the philosophy of the firm's past, and gauge the maturity of the current ones. As a result, accounting's primary purpose is to provide relevant data that serves as the foundation for economic decision-making.

The use of conceptual frameworks

Setting standards for concepts and goals is helpful. IASB or FASB standards should always be taken into account by a company using the conceptual framework in order to boost functionality. The framework should also assist in changing the way that statement users think and the way that financial reporting is done. Comparing data from different companies should also be helpful to the business. Additionally, using the current fundamental ideas aids in providing speedy solutions to difficulties (Singleton-Green, 2016).

The flexibility of the conceptual framework in the creation of financial statements was questioned by the accountants. The history of how the firm has used conceptual frameworks to grow was used to respond to this question. The conceptual framework and accounting rules are incompatible. They have an impact on the company's income and financial statements, which results in a contradiction of the transactional information (Baluch et. al, 2011). The standards were created in response to the scandal or failure, or by looking at the surroundings. Their primary goal was to enhance the strategy through the adoption of new policies.

Another argument that might have been made is that the conceptual framework has less restrictions and guidelines. The usage of the conceptual framework is therefore required if the management is to be conducted with the utmost care. Compared to other systems, this one will be more rigid and the financial statements' magnetism will be much more similar (IFRS Foundation, 2010).

Centred on objectives

Only complete application of the conceptual frameworks can result in the achievement of the IASB's primary goal. For those that use financial statements or for new start-ups looking to expand in the market, these solutions have proven quite helpful. The usage of the conceptual framework has resulted in a better and more inventive representation of the accounting rules. After examining the present status of the company's financial statements, it was determined that the person should be given the pertinent reports so they can use them to determine the index of the conceptual framework of the company (IFRS Foundation, 2013). When evaluating the conceptual framework, all information pertaining to liabilities, assets, capital upkeep, and expenses should be considered.