Conceptual Framework

Herman Ruslim
Framework for Financial Reporting

Third Level:
Recognition, Measurement, and Disclosure
The "How" -
Concepts
Implementation

Qualitative Elements
Characteristics of
of Financial Second Level:
Accounting Statements Bridge between
Information levels 1 and 3

Objectives
of Financial
Reporting
First Level: The Why
- Purpose of Accounting
Conceptual Framework for
Financial Reporting
Recognition, Measurement, and Disclosure Concepts
Assumption Constraints
Principles 1. Cost
1. Economic Entity
1. Measurement 2. Materiality
2. Going Concern Third Level:
2. Revenue Recognition
3. Monetary Unit The "How" -
3. Expense Recognition
4. Priodicity Implementation
4. Full Disclosure
5. Accrual

Qualitative
Characteristics Elements
1. Fundamental Qualities 1. Assets Second Level:
A. Relevance 2. Liabilities Bridge between
(1) Predictive Value 3. Equity levels 1 and 3
(2) confirmatory Value 4. Income
B. Faithfull Representation 5. Expenses
(1) Completeness
(2) Neutrality
(3) Free from Error

Provide Information
about the reporting
entity that is useful
to present and
potential equity investors,\ First Level: The Why
lenders and other - Purpose of Accounting
creditors in their
capacity as capital
provideders
Hierarchy of Accounting
Qualities