Financialisation The Conceptual Framework -Myassignmenthelp.Com

Question: Discuss About The Financialisation The Conceptual Framework? Answer: Introduction Conceptual framework is identified as the theory which is prepared for formulating a body to resolve the practical problems. The important aspect of the conceptual framework is associated to the purposes of the users of the financial statements. The accounting information is able to include the important aspects of the accounting such as assets, liabilities, equity, income, and expenses. Some of the main form of the benefits of the conceptual framework is related to the concepts for acknowledgement and measurement of the financial areas. The study aims to discuss the conceptual framework and financial reporting standard as per IASB. It further aims to discuss on the several types of other qualitative characteristics which are linked to the reporting standards as per IASB. The latter part of the learning of the study is able to address the accounting concepts which are related to the recognition and measure of the conceptual framework (Kalkhouran et al., 2015). Discussion on the conceptual framework and financial reporting standard The conceptual framework for accounting is set with the publications as per the International Accounting Standards Board (IASB) formulated with the discussion of the changes pertaining to the conceptual framework as per the financial reporting. The four purposes of the conceptual framework to provide guidance in the development and application of accounting standards are: Firstly, the present conceptual framework in MASB has been seen with IASB to develop IFRS which has considerably improved the financial reporting. Some of the significant amendments of the IASB in 2011 is able to include the revisions of the drafts including the definitions of liabilities and assets, distinction among the liabilities and equity, measurement, comprehensive income, presentation and derecognitions (Sutton, Cordery, van Zijl, 2015). Secondly, the main reason for the expansion of the approved theoretical framework is discerned with the setting of accounting standard built on the resolving of the disputes based on fundamental principles which do not have to be repeated in accounting standards. The significant reasons for the agreement and expansion of the conceptual framework for accounting shows the development of the sound theoretical base for setting the accounting standards as per requirement (A A N Kalkhouran et al., 2015). Thirdly, it is discerned that conceptual framework acts as the reference point to evaluate the existing and the proposed accounting standard which were not covered by the proposed and the existing accounting standard. There have been significant differences associated to the treatment required for the new transactions. There are several instances which has depicted that the accountant is facing considerable amount of pressure due to increased prerequisite for the requirements. It needs to be further understood that the significant nature of the concepts associated to the accounting needs to be addressed with the resolution of the issues in a conceptual framework for the development of the financial report. Fourthly, the development of the conceptual framework of report is further seen to be based on the consideration of the significant measurement of the principles and rules of recognition and measurement. The consideration of the development of the framework for accounting is seen with working on objectives such as Qualitative characteristics and quantitative characteristics. The important consideration for the qualitative characteristics is based on the important assumptions and constraints. In addition to this, the various types of the quantitative parameters of the report is seen to be based on the recognition and measurement of the important accounting concepts (Spraakman Jackling, 2014). Discussion on the qualitative characteristics of useful information The qualitative characteristics of the financial reporting is seen to be based on the concepts which is related to the relevance, understandability, reliability and comparability of the available information. The relevance qualitative factor assists the users to make the predictions on the outcome of the present, past and future events. This also helps the users for confirmation and correcting of the past evaluations as per the feedback value. It ensures the timeliness of the important elements of the relevance which is associated to the change in the judgement of the rational user (Natalia, 2017). The quality factor related to the understandability of the financial information is based on the significant nature of adherence to the relevant principles. The reliability characteristic of the financial report is built on the important considerations of the quality of the information which is directly related to the relevant value of the availability of the financial information. The rel iability characteristics is depicted with the faithful representation, verifiability, completeness and neutrality (Jermakowicz, Reinstein, Churyk, 2014). In addition to this, the qualitative characteristics of the report is able to ensure the faithful representation of the financial report which is seen to be based on the reporting of the actual transactions and the events which effects the firms. It needs to be further understood that the quality of the financial report ensures the transactions and the events are not recorded in their mere legal form. The accountants need to ensure the prudence aspect by considering the factors causing uncertainty and take proper caution while exercising the judgements while making the estimations. The verifiability of the data is considered with the knowledgeable and independent individuals developing the essential measures from examining similar evidence or records. Henceforth, the verifiability aspect is able to focus on measurement which is related to the similar evidences. The qualitative factor of the financial information is able to ensure the independent individuals developing the similar measures and conclusions taken from measurements based on examining of similar evidences (Biondi Soverchia, 2014). The comparability quality of the financial report is able to ensure that the financial statements is able to recognize the real similarities which exists with the real similarities along with the existence of the difference as per the economic phenomena of the firm at one time or between the firm at one time and over time. As per the comparative quality, the financial statements are able to identify the consistency in terms of the measurement and display of the information by the firm one period to another and the existing differences between the same (Craig, Smieliauskas, Amernic, 2014). Discussion on the accounting concept of recognition and measurement Firstly the inclusion of the some of the important concept of recognition and measurement of the economic entity assumption can be identified with revisions of the drafts including the explanations of liabilities and assets, distinction among the liabilities and equity, measurement, comprehensive income, presentation and derecognitions. For example, FASB Issues Exposure Draft On Disclosure Of Going Concern Uncertainties is most of the most popular exposure draft to determine the need for going concern disclosures. Secondly, the theoretical framework is conducive in recognizing the components of earnings which is important for resolving several instance of disputes in accounting and acts as the primary measure of the entity performance. The supervision for the recognition of the accounting principles is related to the understanding of the important recognition criteria to the elements of earnings. It needs to be further understood that the identification for the important recognition elements is related to the revenues, gains, expenses, and losses with those cycles (Zhou, Ou, Li, 2016). The consumption of benefits and the expenses is associated to the same is seen to be included with the different aspects of the revenue earnings until it has been realized or ascended to be realizable. The recognition criteria for the conceptual framework is related to the subjectivity concept of Probability (Ding, Hellmann, De Mello, 2017). For example, a professional accountant shall assess any threats to co mpliance with the fundamental principles when the professional accountant know or could reasonably be expected to know, of circumstances or relationships that may compromise compliance with the fundamental principles. Thirdly, differences associated to the treatment required for the new transactions is considered with the reaction to the uncertainty with the stringent requirement for the historical impacts for the recognition of the revenues and the gains as the component for identifying the expenses and losses. The different types of the conservative reactions are able to affect the guidance for the application and recognition for the important components related to the earnings. The recognition of the revenues and gains is included with the realized or realizable revenue and gains which are generally not recognized as the components of earnings until realized or realizable. For example, The earned revenues are not seen to be included when the entities are having a substantial accomplishment as per the benefits represented by the revenues. The gains are further seen to be less than significant releasable value (Schaltegger Zvezdov, 2015). Fourthly, the important consideration made for the recognition is ensured with the criteria that the financial elements comply with the definition of the elements as per the financial statements. The measurability aspect needs to be relevant with the sufficient reliability aspect of the Qualitative characteristics and quantitative characteristics. (Zhang Andrew, 2014). In addition to this, the fundamental for the measurement of the financial entities are based on definitions, measurability, relevance and reliability. For example the rules of recognition and measurement can vary from historical cost and current market value, net realizable value and present value of the future cash flows (Abela et al., 2014). As per the nature of the item the reliability and relevance of the attributable value is measured. The monetary unit of the measurement for different types of the elements of the financial statement of the accounting is seen to be based on the consideration of variations in the purchasing power of the money over time. The board expects that the nominal units of money which is not considered for the changes in the purchasing power overtime. The board expects that the nominal units of money will continue to measure the items recognised in the financial statements. Summarization of the key points The important assertions as per discourse on the conceptual framework has stated that that conceptual framework acts as the reference point to evaluate the existing and the proposed accounting standard which were not covered by the proposed and the existing accounting standard. The discussions have also inferred that the financial reporting standard have shown adherence to International Accounting Standards Board (IASB) formulated with the discussion of the changes pertaining to the conceptual framework as per the financial reporting. The present conceptual framework in MASB is compliant with IASB to develop the quality IFRS which has considerably improved the financial reporting. The qualitative characteristics of the financial reporting is based on the factors such as relevance, understandability, reliability and comparability of the available information. The qualitative factors of the information are further considered with the knowledgeable and independent individuals opinion on developing the essential similar measures by examining similar evidence or records. The qualitative characteristics of the information is also depicted to be maintained with the reliability characteristics which is depicted with the faithful representation, verifiability, completeness and neutrality. The qualitative factor of the financial information is able to ensure the independent individuals developing the similar measures and conclusions taken from measurements based on examining of similar evidences. Discussion on the accounting concept of recognition and measurement is able to identify the considerations as per the going concern assumption, periodicity assumptions and monetary unit assumptions. The primary reason for the recognition and measurement of the accounting concepts are based on the fundamental for the measurement of the financial entities which are based on definitions, measurability, relevance and reliability. The board assumes that the nominal units of money whi ch will remain to measure the items recognised in the financial statements. The control in recognizing the mechanisms of earnings is important for the primary measure of the entity performance. Conclusion The significant aspects of the learnings from the study has been able to suggest that Malaysian Accounting Standards Board (MASB) is established as per the application of MFRS framework for the annual periods beginning on or after 1 January 2012, along with certain exceptions to apply the Financial Reporting Standards (FRS) framework. As per the notification issued on 28 October 2015 entitled amendment to the effective date and applicability of the Malaysian Financial Reporting Standards, which is entitled for the alternative application of the FRSs to comply with the MFRSs beginning on or after 1 January 2018. It needs to be further understood that the board has permitted for the early adoption of the MFRS. As per the explanatory column the consequential amendments to this standard is based on the amendments to another Standard being issued that have an effective date after 1 January 2015. This column has further included the documents which accompanies with the respective standards which are not part of these standards. These are seen to form a part of the IASB 2017 edition of documents accompanying IFRS Standards. The main aspects for the conclusions for the amendment are set as per the standards which are having an effective date on or after 1st January 2017. The illustrative implementation of the guidance is considered with the amendment which are effective after 1 January 2017. References Abela, M., Barker, R., Sommer, R., Teixeira, A., Andr, P. (2014). Towards a New Conceptual Framework: Presentations at the Accounting in Europe and European Accounting Association Financial Reporting Standards Committee Symposium. 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