CONCEPTUAL FRAMEWORK

CONCEPTUAL FRAMEWORK The following comprises the conceptual framework of Financial Reporting: Objective of Financial Reporting Elements of Financial Statements Basic Financial Statements Recognition and Measurement Concepts o Basic Accounting Assumptions o Broad Accounting Principles Qualitative Characteristics o Understandability o Relevance o Reliability o Comparability

Diagram of Conceptual Framework

OBJECTIVE: To provide useful information for sound decision-making

QUALITATIVE CHARACTERISTICS: UNDERSTANDABILITY RELEVANCE Nature and Materiality Predictive Value Feedback Value Timeliness RELIABILITY Faithful Representation Substance ove form Prudence Completeness Neutrality COMPARABILITY Consistency

ELEMENTS: Assets Liabilities Owner's Equity or Capital Revenues Expenses Gains Losses

RECOGNITION and MEASUREMENT CONCEPTS: ASSUMPTIONS Economic Entity Going Concern Periodicity Monetary Unit PRINCIPLES Historical cost Realization Matching Full disclosure

FINANCIAL STATEMENTS: Statement of Financial Position Income Statement Statement of Changes in Equity Cash Flow Statement Notes to Financial Statements

References : Philippine Accounting Standards (PAS) Philippine Financial Reporting Standards (PFRS)

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