1

Objectives of Financial Reporting

(To provide financial information
The IASB
2 that is useful to capital providers) Conceptual
4 Framework
Qualitative Characteristics
Financial Statements Elements
Fundamental
Financial Position
 Relevance Recognition of Elements
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o Predictive value  Assets
 Liabilities  Provides relevant
o Confirmatory value information
o Materiality  Equity
 Provides faithful
 Faithful Representation Financial Performance representation
o Completeness
o Neutrality  Income Measurement of Elements
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o Free from error  Expense
 Measurement bases
Enhancing
7 Presentation & Disclosure
 Comparability 1
 Verifiability Financial Statements Elements
 Timeliness
 Statement of Financial 8 Capital and Capital Maintenance
 Understandability Position 1 Concepts
 Statement of Profit or Loss
and Other Comprehensive
Income
Constraint Underlying Assumption
 Cost Effectiveness  Going Concern
Reporting Entity
3  Boundary of Entity