Integrated Reporting Framwork Assignment Example | Topics and Well Written Essays - 1250 words

Integrated Reporting Framwork - Assignment Example This created the need to improve the financial reporting standards by having in place an improved conceptual framework. The main objective of financial reporting is outlined as providing information that is useful to present and potential investors and creditors in making investment and credit decisions and other users, and also in resource allocation. The previous concept that laid emphasis in providing information to management and owners and others on enterprise performance or profitability in describing how management has performed is lacking enough information. The recognition of every user of financial information is the key for the conceptual framework. IASB recognises the following users of financial information equity investors, loan creditors, suppliers, employees, customers, members’ of public, the government and government bodies. With such robust of potential users it is important to provide financial information in a clear format that benefits all. ... Information should be relevant, have faithful representation, be comparable and finally understandable. These aspects bring in the economic sense of financial reporting. The real world economic value should be elaborated in the financial reports. This brings in the aspect of valuation and measurement aspects. It is important to understand how to express assets and liabilities in monetary terms. The historical cost that has been in use is being phased out by incorporating market value, calculated fair value, depreciated historical value, valuations by actuaries, and finally measurements modified by impairment tests. With increasing reporting aspects it becomes even harder to substantiate all the financial, nonfinancial, social, governance, and environment in reports using the previous reporting framework The US FASB is among the partners who are engaged in developing the conceptual framework defined under the grounds of a constitution, a coherent system of interrelated objectives and fundamentals that can amount to consistent standards and that prescribe the nature, functions and the extent of financial accounting and financial statements. In this context it explains the objectives of financial reporting, the quality aspects of accounting information, elements, recognition and measurement of financial statements. Role of a conceptual framework in setting out the needs of Integrated Reporting The accounting standards board has defined the statement of principle for financial reporting that addresses the concepts underlying the information presented in financial statements. The aim of this statement is to give a framework for consistency and logical formulation of individual accounting standards. The statement allows users of financial