CONCEPTUAL FRAMEWORK FOR FINANCIAL REPORTING: INTEGRATED POLICY

N Savina,O Miklukha,N Pozniakovska

doi:10.18371/fcaptp.v1i36.227624

Abstract

Abstract. The project of the International Accounting Standards Board that updates and develops international accounting standards (IASB) has been lasting more than twenty years. In Ukraine, International accounting standards were adopted as the national standards for business and public sectors. The article analyzes the Conceptual Framework for Financial Reporting for the business sector entities, compares it with the Conceptual Framework for financial reporting for the public sector entities, and the current requirements of the Ukrainian legislation in the field of accounting and financial reporting. The necessity of creating a single Conceptual Framework for financial reporting, based the needs of information users, is substantiated. The relevant International Standards for the business sector entities became fundamental for the development of International Public Sector Accounting Standards. The similar needs of financial reports users support this approach. At the same time, part of the IPSAS, and the Conceptual Framework take into account the functional peculiarities of the entities in this sector of the economy. Financial reporting concepts for entities in any sector of the economy determine the aim of financial reporting as that to acquire information concerning the entity. Investors, creditors, other lenders are prior users of financial information in the business sector while society as a whole uses information in the public sector. The Conceptual Framework for the public sector takes into account the peculiarity of this sector of the economy, the main purpose of which is to provide services to society, rather than generating profits and ensuring the return on capital of investors. The common features of financial reporting standards and their Conceptual Framework, taking into account current trends and global challenges, indicate the possibility and feasibility of creating a unified (integrated) Conceptual Framework for Financial Reporting. Keywords: the Conceptual framework for financial reporting, International Financial Reporting Standards for the entrepreneurial sector, International Public Sector Accounting Standards, National Accounting Statements (Standards). JEL Classification M41 Formulas: 0; fig.: 1; tabl.: 2; bibl.: 20.

Highlights

Structural changes in the economy and politics during the last decade, market rearrangement, financial crises, climate changes and natural disasters, social changes, and a variety of threats cause the use of trustworthy financial and nonfinancial information for an adequate reaction to global challenges and effective decision making
On March 29, 2018, IASB edited an updated version of the Conceptual Framework for financial reporting that came into force in 2020
Is a comparison between principles and qualitative characteristics of accounting and financial reporting according to International Standards by business and public sectors entities (Table 2)

Summary

Introduction

Structural changes in the economy and politics during the last decade, market rearrangement, financial crises, climate changes and natural disasters, social changes, and a variety of threats cause the use of trustworthy financial and nonfinancial information for an adequate reaction to global challenges and effective decision making. The International Accounting Standard Board edited the Conceptual Frameworks for financial reporting for the public sector [20] in 2013 when the projects of some paragraphs have been published and discussed during 2008—2013 This variant of the Concept included supplements with regulations about the approval and the assessment of financial reporting elements. Is a comparison between principles and qualitative characteristics of accounting and financial reporting according to International Standards (the Conceptual Framework for financial reporting) by business and public sectors entities (Table 2). The Conceptual Frameworks for financial reporting for both business and public sectors, determine qualitative characteristics of financial reporting, unlike the Law of Ukraine of 2017, edited to implement regulations of the national legislation and EU Directive that describes only general principles for financial reporting compelling. We propose distinct formulation of the financial reporting submission and compiling characteristics in relevant paragraphs of the concept

Conclusions

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