The difference between FASB and IASB conceptual framework :

FASB IASB

Presentation of Conceptual The Conceptual The International

Framework Framework of Accounting Standard
Concept Statements Board issued the
No.8 includes: revised Conceptual
Framework for
● Chapter 1 Financial Reporting
● Chapter 3 in March 2018,
● Chapter 4 which is a
● Chapter 7 comprehensive set
● Chapter 8 of concepts for
● Concepts Statement financial reporting,
No.7 which identify the
● Concepts Statement following :
No.5
● Chapter 2
● Chapter 2
● Chapter 3
● Chapter 4
● Chapter 5
● Chapter 6
● Chapter 7
● Chapter 8

Purpose of Conceptual The Conceptual To assist the Board

Framework Framework is to develop IFRSs
intended to set for standards based on
the fundamental consistent concepts,
concepts that will be resulting in financial
the basis for information that is
development of useful to investors,
financial accounting lenders and other
and reporting creditors
standards To assist preparers
It is intended to of financial reporting
serve the public to develop consistent
interest by providing accounting policies
structure and for transactions or
direction to financial other events when
accounting and no Standard applies
report to facilitate the or Standard allows a
provision of choice of accounting
unbiased financial policies
and related To assist all parties
information to understand and
interpret Standards

Primary Users Many existing and Users of financial

potential investors, reports are entities
lenders and other existing and potential
creditors cannot investors, lenders
 require reporting and others creditors.
entities to provide These users must
information directly rely on financial
to them and must reports for much of
rely on general the financial
purpose financial information they
reports for much of need
the financial
information they
need

Objective of Financial The objective of To provide financial

Reporting general purpose information that is
financial report is to useful to users in
provide financial making decisions
information and the relating to providing
reporting entity that resources to the
is useful to existing entity
and potential
investors, lenders
and other creditors in
making decision

Qualitative Characteristics Fundamental Fundamental

Characteristics : Characteristics :
● Relevance ● Relevance
● Faithful ● Faithful
Representati Representati
on on

Enhancing Enhancing
Characteristic : Characteristics :
● Comparability ● Comparability
● Verifiability ● Verifiability
● Timelines ● Timelines
● Understanda ● Understanda
bility bility

The Elements of Financial There are two Assets

Statement different types of Liabilities
elements of financial Equity
statements. Income
1. The first types
Expenses
included :
● Assets
● Liabilities
● Equities
2.The second type of
elements describe :
● Revenues
● Gains
● Expenses
● Losses
● Investment
 by owners
● Distribution
by owners

Constraints Cost benefit Cost constraint

Materiality
Industry practice
Conservatism

Measurements The measurements The measurements

depending on: bases on:

● The nature of ● Historical

item cost
● The measurement
relevance bases
● Reliability of ● Current value
attribute Measurement
measured bases

1. Fair
value
2. Value
in use
3. Curre
nt
cost

Assumptions Economic entity Economic entity

Going concern Going concern
Monetary unit Accrual basis
Accrual basis Stable measuring
unit
Periodicity

Principle Measurement Matching

Revenue recognition Revenue recognition
Expense recognition and realisation
Full disclosure Measurement
Conservatism Full disclosure
Consistency

Reporting entity The Board will An entity that is

considered because required or chooses
some aspect are not to prepare financial
addressed statements
Not necessarily a
legal entity could be
a portion of an entity
or compromise more
than one entity