What is accounting standards and how it differs from conceptual

framework and GAAP?

 An accounting standard is a common set of principles, standards and

procedures that define the basis of financial accounting policies and
practices. Accounting standards improve the transparency of financial
reporting in all countries.

 The International Accounting Standards (IAS) constitute a single set of high-

quality accounting standards, which help in the preparation of consolidated
financial statements, including the balance sheet, income statement,
statement of changes in the financial position, cash flow statement and
explanatory notes.

 The conceptual framework resulted in offering guidance on how financial

reports are prepared and disclosed. While the accounting standards offer a
threshold that must be met in when preparing and disclosing financial
statements
 A Conceptual framework in accounting is a statement of generally
accepted theoretical principles and not rules which form the frame of
reference for financial reporting. The financial reporting process is
concerned with providing information that is useful in the business
and economic decision making process. As such a conceptual
framework will form the basis for determining which events should be
accounted for, how they should be measured and how they should be
communicated to the user.

 International accounting standards such as IFRS (International

Financial Reporting Standards) and/or GAAP (Generally Accepted
Accounting Principles).

The GAAP accounting standards have been largely developed within the United States while
the IFRS accounting standards are more European based. 
 IFRSs set out recognition, measurement, presentation and disclosure
requirements dealing with transactions and events that are important
in general purpose financial statements. IFRSs are based on the IASB
framework, which addresses concepts underlying the information
presented in general purpose financial statement, facilities the
consistent and logical formulation of IFRSs.
IFRSs are designed to apply to the general purpose financial
statements and other financial reporting of all profit oriented entities.

 The primary difference between the two systems is that GAAP is

rules-based and IFRS is principles-based. This disconnect manifests
itself in specific details and interpretations. Basically, IFRS guidelines
provide much less overall detail than GAAP. Consequently, the
theoretical framework and principles of the IFRS leave more room for
interpretation and may often require lengthy disclosures on financial
statements.
o Principles-based consider to be the most popular accounting method. Most
countries opt for a principles-based system, as it is often better to adjust
accounting principles to a company’s transactions rather than adjusting a
company’s operations to accounting rules.

 The International financial reporting standard IFRS) system—the most

common international accounting standard—is not a rules-based system.
The IFRS states that a company’s financial statements must be
understandable, readable, comparable, and relevant to current financial
transactions.

 The  Generally Accepted Accounting Principles (GAAP) system is the rules-

based accounting method used in the United States. Companies and their
accountants must adhere to the rules when they compile their financial
statements. These allow investors an easy way to compare the financial
information of different companies. Rules-based accounting is a
standardized process of reporting financial statements.
There are 10 principles of the rules-based GAAP accounting system:
1. Regularity
2. Consistency
3. Sincerity with an accurate representation of the company's financial
situation
4. Permanence of methods
5. No expectation of compensation
6. Prudence with no semblance of speculation
7. Continuity
8. Dividing entries across appropriate periods of time
9. Full disclosure in all financial reporting
10. Good faith and honesty in all transactions