Abstract

The subject of the study is the Conceptual Framework that lays the foundation for the preparation of information presented in International Financial Reporting Standards. The significance of the research topic is explained by the increasingly active use of international financial reporting standards in accounting of various countries. The purpose of the study is to assess the impact of changes made to the Conceptual Framework for Financial Reporting in 2018 on the accuracy of the information contained in the financial statement. The article focuses on the need to study the conceptual framework for financial reporting for a relevant and understandable reflection of the objects of financial reporting. The methodological basis of the work includes general scientific methods, such as analysis and synthesis, detailing and generalization, comparison and abstraction, models and a method of system and chronological analysis, etc.

Highlights

  • In order to do business successfully, as well as to make optimal decisions, entity's management must be able to read, understand and analyze financial statements

  • The last component is especially important in connection with the issuance of the new leases standard, IFRS 16 Leases, in which there is a right of use asset (ROU asset)

  • IFRS does not contain any requirements for the preparation of combined financial statements, the term has been included in the new Framework

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Summary

Introduction

In order to do business successfully, as well as to make optimal decisions, entity's management must be able to read, understand and analyze financial statements. It is necessary for reporting to be comprehensible to all the users This requires that the reporting is subject to certain general rules of the preparation of accounting information. At the present time, when business relations between entities of various states are rapidly developing, this task faces national accounting control systems, and the entire international accounting community. One of the most important documents that determine the main areas of the preparation of information in the accounting conducted in accordance with the requirements of IFRS, is the Conceptual Framework for Financial Reporting (hereinafter – the Framework). This defines the principles for reflecting accounting information, as well as requirements for recognizing objects in accounting, and for evaluating these objects

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