የIFRS ኮንሰፕቹአል ፍሬምዎርክ ክፍል 1

PURPOSE
To assist the Board to develop Standards based on consistent concepts, resulting in financial info that is useful to investors, lenders & other creditors (primary users of financial info)
To assist F/Stt preparers to develop consistent accounting policies for trn or other events when no Standard applies or a Standard allows a choice of accounting policies & helps to prevent creative accounting
Generally accepted theoretical principles &Concepts
The conventions & definitions
It is Neither a Standard Nor overrides any Standard or its requirements
Status of the CF
In 1989 the framework for the preparation & presentation of the F/Stt
Amended & rename in 2010 the conceptual framework for the financial reporting. Unfinished framework
Revised in March 2018 new conceptual framework for the financial reporting. Final & every thing completed
It has 8 chapters.
Chapter 1-The Objective of General Purpose Financial Reporting;
Chapter 2 - Qualitative Characteristics of Useful Financial Information;
Chapter 3-Financial Statements and the Reporting Entity;
Chapter 4-The Elements of Financial Statements;
Chapter 5-Recognition and Derecognition;
Chapter 6-Measurement;
Chapter 7-Presentation and Disclosure;
Chapter 8-Concepts of Capital and Capital Maintenance.
CHAPTER 1
The Objective of General Purpose Financial Reporting
To provide useful information to primary users to make decisions. (trading, providing loan)
The primary users need information
To assess the economic resources of the entity, claims against the entity & changes in those resources and claims
To assess how effectively & efficiently management has discharged its responsibilities to use the entity's existing resources (i.e., stewardship).
The decisions made by users will involve:
1) Investment decisions (buying, selling or holding)
2) Financing decisions(buying, selling or holding) or providing/settling loans
3) Voting, or influencing management actions
2)Timeliness
Information should be made available to users within a timescale which is likely to influence their decision
3) Comparability:
Comparability b/n d/t entities & time periods
Consistency help to achieve comparability by using same method period to period or across entities.
4) Verifiability (direct or indirect):
It means that, different, knowledgeable and independent observers could reach consensuses.
To verify some explanations and forward-looking financial information until a future period necessary to disclose the underlying assumptions, the methods.
CHAPTER 2
Qualitative Characteristics of Useful Financial Information
Financial Information that are likely to be most useful to users in making decisions classified as
Fundamental qualitative characteristics
Enhancing qualitative characteristics ;
Relevance:
If it will impact (influence) decision made by its users
It has to be capable of making a difference (Predictive/confirmatory/both value)
Relevance is supported by materiality (omitting, misstating or obscuring) considerations it is entity specific context (based on nature/magnitude)
Faithful representation:
For financial info to be faithfully presented, it must be:
Complete (all necessary descriptions & explanations of the nature & process used)
Neutral (not overstatement/understatement of asset, income, liability, expenses)
Free from error (no errors have been made in selecting & applying an appropriate process)
CHAPTER THREE
Financial Statements & the Reporting Entity
Financial Statement
F/stt provides info about the assets, liabilities, equity, income & expenses of the reporting entity
Statement of financial position, statement of financial performance and other statements & notes (the methods, assumptions & judgements used/changed in estimating)
F/stt provide comparative info for at least one preceding reporting period to help users of f/stt to identify and assess changes and trends.
CH-3 Going concern assumption
F/stt are normally prepared on the assumption that the RE is a going concern & will continue in operation for the foreseeable future.
It is assumed that the entity has neither the intention nor the need to enter liquidation or to cease trading.
The Reporting Entity
A RE is an entity that is required or choose to prepare f/stt.
RE f/stt can be:
Consolidated, (parent & subsidiaries)
Unconsolidated (parent alone)
combined F/stt are the d/t forms of f/stt (two or more entities that are not all linked by a parent-subsidiary relationship)

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