ASB'S Framework for Preparation and Presentation of Financial Research Paper

ASB'S Framework for Preparation and Presentation of Financial Statements - Research Paper Example Three more important concepts which are identified by IAS 1 are Prudence, substance over form and materiality. These concepts form the basis of the selection and implementation of the accounting policies. The basic purpose of the framework presented by the IASB is to provide the definition of why the financial statements are required. It also ascertains the qualitative characteristics that eke the process of making the information provided by the financial statements more useful. The framework also elaborates about the basic elements included in the financial statements and the concepts for recognizing and measuring them in financial statements. The general purpose financial statement is required to provide information regarding the financial position including the cash flow and performance of the company. The information provided in the financial statement helps a company in comparing its performance from the last year and supports the management in undertaking important decisions regarding the business. The purpose can only be fulfilled if the financial statements provide information regarding the following aspects of the company. Other information in the notes and related documents help the users in estimation and evaluation of the present and future position of the entity. The framework provided by the IASB addresses the general purpose financial statements prepared by every business entity for addressing the information requirements of a wide range of users in making economic decisions. As the framework addresses the purpose of preparing the general financial reports it may not apply to the special purpose financial reports.