Conceptual framework of financial report and its role
The full name of the conceptual framework of financial reporting is "the conceptual framework of financial accounting and reporting", or "CF" for short. It is a theoretical system composed of a series of basic concepts that explain financial accounting and are applied by financial accounting. It is the theoretical basis for evaluating existing accounting standards, guiding and developing future accounting standards.
The conceptual framework of financial accounting plays the following important roles:
1. Be able to evaluate the quality of the existing accounting standards, ensure the consistency of the internal logic of the accounting standards related documents, and ensure the integrity and thoroughness of the standards system. In addition, it can make up for some defects in the standards and provide theoretical support for solving major accounting problems;
2. It can guide the accounting standard setting institutions to develop new accounting standards, and formulate and point out the direction, and regularly revise and improve the accounting standards. At the same time, the research on the conceptual framework of financial accounting can timely display the latest results of accounting theory research under the change of social and economic environment, thus constantly promoting the in-depth development of accounting theory research;
3. For areas lacking GAAP, it plays a basic normative role in guiding accounting practice;
4. It will help users of accounting information better understand the purpose, content, nature and limitations of the information provided by the financial report, so that they can make appropriate analytical judgments and correct business decisions.