The IASB framework provides concepts and principles for preparing financial statements. It outlines the objective of financial statements which is to provide useful information to investors and creditors. The framework also describes underlying assumptions like going concern, accrual basis accounting, qualitative characteristics like understandability and comparability, and elements of financial statements such as assets, liabilities, and equity. For an item to be recognized in the financial statements, it must meet the definition of an element, its flow to or from the entity must be probable, and its cost or value must be reliably measurable.

1. IASB FRAMEWORK
Topic
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Assigned by:
SIR SOHAIL BHUTTO:
Presented by:
Gulshan Ujjan
Muhammad Haris Shaikh
Kashif Laghari

2.  The international accounting standards board
(IASB) Issued its “Framework” for the preparation
and presentation of financial statements in 1989.
This is referred to as its conceptual framework. The
framework sets out the concepts that shape the
preparation and presentation of financial
statements for external users.
IASB MAIN FRAMEWORK:
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3.  A statement of principles used for the development
of new accounting standards.
 The Contents of the framework include:
 The objective of the finical statement
 Underlying assumptions of financial statements
 Qualitative characteristics of financial statements
 The elements of the financial statements
 Recognition of the elements of financial statements.
THE CONTENTS OF FRAMEWORK
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4.  Financial Statements are prepared to provide the
financial position of a reporting entity the financial
information provided by financial statements is
useful to existing & potential investors, lenders &
other creditors of the entity.
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5.  GOING CONCERN CONCEPT
 The going concern principles is the assumption that an
entity will remain in business for the foreseeable future.
Usually meaning more than 12 months.
 ACCRUALS CONCEPTS
 The accruals concept means that expenses & revenues
are recorded in the period in which they occur, rather
than when cash is received in or paid out.
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6. QUALITATIVE CHARACTERISTIC:
 Understandability
 Comparability
 Faithful Representation
 Verifiability
 Timeless
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7.  UNDERSTANDABILITY:
 The information must be readily understandable to
users of the financial statements. This means that
information must be clearly presented, with additional
information supplied in the supporting footnotes as
needed to assist in clarification.
 COMPARABILITY
 The information must be comparable to the financial
information presented for other accounting periods, so
that users can identify trends in the performance &
financial position of the reporting entity.
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8.  FAITHFUL REPRESENTATION
 Information should be faithful in its presentation i.e.
complete neutral & free from error.
 VERFIABILITY
 The ability to see how an entity arrives at a certain
results in the financial statements from the data it
provides.
 TIMELESS
 Information needs to be up to date & delivered at the
right time.
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9.  Statements of
Financial Position
 Assets
 Liabilities
 Equity
 Income Statement
 Income
 Expenses
An assets is present economic
resource controlled by the entity
as a result of past events
A liability is a present obligation of
the entity to transfer an
economic resource as a result of
past events.
Equity is the residual interest in the
assets of an entity after the
deduction of all its liabilities
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10.  Statements of
Financial Position
 Assets
 Liabilities
 Equity
 Income Statement
 Income
 Expenses
An economic resource is a right
that has the potential to
produce economic benefit.
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11.  Statements of
Financial Position
 Assets
 Liabilities
 Equity
 Income Statement
 Income
 Expenses
Income is the increase in an
organization economic
benefit during the accounting
period that results in the
increase in capital.
Expenses are the decrease in
an organization economic
benefit during the accounting
period that result in the
decrease in capital.
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12.  In order for the 5 element to be recognized in the
financial statements the following criteria must be
met.
 Item must meet the definition of an element
 It must be probable that any future economic benefit
associated with the item will flow to or from the entity.
 Item’s cost or value must be reliably measurable
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13. THANK YOU
  
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