国际财务报告准则2017( IFRS2017)英文版

Preface to IFRSs Preface to International Financial Reporting Standards1

This Preface is issued to set out the objectives and due process of the International Accounting Standards Board and to explain the scope,authority and timing of application of International Financial Reporting Standards.The Preface was approved by the IASB in April2002and superseded the Preface published in January1975(amended November1982).In2007the Preface was amended in January and October to reflect changes in the IASC Foundation’s2Constitution and in September as a consequence of the changes made by IAS1Presentation of Financial Statements(as revised in2007).In January2008paragraph9was amended to update the reference to the body now known as the IPSASB.In2010the Preface was amended to reflect the Constitution as revised in January2009and January2010and the publication of the Conceptual Framework in September2010.

1The International Accounting Standards Board(IASB)was established in2001as part of the International Accounting Standards Committee(IASC)Foundation.

In2010the IASC Foundation was renamed the IFRS Foundation.The governance

of the IFRS Foundation rests with twenty-two Trustees.The Trustees’

responsibilities include appointing the members of the IASB and associated

councils and committees,as well as securing financing for the organisation.The

IASB comprises fifteen full-time members(the IFRS Foundation’s Constitution

provides for membership to rise to sixteen by1July2012).Approval of

International Financial Reporting Standards(IFRSs)and related documents,such

as the Conceptual Framework for Financial Reporting,exposure drafts,and other

discussion documents,is the responsibility of the IASB.

2The IFRS Interpretations Committee3comprises fourteen voting members and a non-voting Chairman,all appointed by the Trustees.The role of the Committee

is to prepare interpretations of IFRSs for approval by the IASB and,in the context

of the Conceptual Framework,to provide timely guidance on financial reporting

issues.The Committee(then called the International Financial Reporting

Interpretations Committee)replaced the former Standing Interpretations

Committee(SIC)in2002.

3The IFRS Advisory Council4is appointed by the Trustees.It provides a formal vehicle for participation by organisations and individuals with an interest in

international financial reporting.The participants have diverse geographical

and functional backgrounds.The Council’s objective is to give advice to the IASB

on priorities,agenda decisions and on major standard-setting projects.

4The IASB was preceded by the Board of IASC,which came into existence on 29June1973as a result of an agreement by professional accountancy bodies in

Australia,Canada,France,Germany,Japan,Mexico,the Netherlands,the United

1including IFRIC and SIC Interpretations

2In July2010the IASC Foundation was renamed the IFRS Foundation.

3Before March2010the Interpretations Committee was called the International Financial Reporting Interpretations Committee(IFRIC).

4Before March2010the IFRS Advisory Council was called the Standards Advisory Council(SAC).

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Kingdom and Ireland,and the United States of America.A revised Agreement

and Constitution were signed in November1982.The Constitution was further

revised in October1992and May2000by the IASC Board.Under the May2000

Constitution,the professional accountancy bodies adopted a mechanism

enabling the appointed Trustees to put the May2000Constitution into force.

The Trustees activated the new Constitution in January2001,and revised it in

March2002.5

5At its meeting on20April2001the IASB passed the following resolution:

All Standards and Interpretations issued under previous Constitutions continue to

be applicable unless and until they are amended or withdrawn.The International

Accounting Standards Board may amend or withdraw International Accounting

Standards and SIC Interpretations issued under previous Constitutions of IASC as

well as issue new Standards and Interpretations.

When the term IFRSs is used in this Preface,it includes standards and

Interpretations approved by the IASB,and International Accounting Standards

(IASs)and SIC Interpretations issued under previous Constitutions. Objectives of the IASB

6The objectives of the IASB are:

(a)to develop,in the public interest,a single set of high quality,

understandable,enforceable and globally accepted financial reporting

standards based on clearly articulated principles.These standards

should require high quality,transparent and comparable information in

financial statements and other financial reporting to help investors,

other participants in the various capital markets of the world and other

users of financial information make economic decisions;

(b)to promote the use and rigorous application of those standards;

(c)in fulfilling the objectives associated with(a)and(b),to take account of,

as appropriate,the needs of a range of sizes and types of entities in

diverse economic settings;

(d)to promote and facilitate the adoption of IFRSs,being the standards and

interpretations issued by the IASB,through the convergence of national

accounting standards and IFRSs.

Scope and authority of International Financial Reporting Standards

7The IASB achieves its objectives primarily by developing and publishing IFRSs and promoting the use of those standards in general purpose financial

statements and other financial reporting.Other financial reporting comprises

information provided outside financial statements that assists in the

interpretation of a complete set of financial statements or improves users’

ability to make efficient economic decisions.In developing IFRSs,the IASB 5The Constitution was further revised in July2002,June2005,October2007,January2009,January 2010and January2013.

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works with national standard-setters to promote and facilitate adoption of IFRSs

through convergence of national accounting standards and IFRSs.

8IFRSs set out recognition,measurement,presentation and disclosure requirements dealing with transactions and events that are important in

general purpose financial statements.They may also set out such requirements

for transactions and events that arise mainly in specific industries.IFRSs are

based on the Conceptual Framework,which addresses the concepts underlying the

information presented in general purpose financial statements.Although the

Conceptual Framework was not issued until September2010,it was developed from

the previous Framework for the Preparation and Presentation of Financial Statements,

which the IASB adopted in2001.The objective of the Conceptual Framework is to

facilitate the consistent and logical formulation of IFRSs.The Conceptual

Framework also provides a basis for the use of judgement in resolving accounting

issues.

9IFRSs are designed to apply to the general purpose financial statements and other financial reporting of profit-oriented entities.Profit-oriented entities

include those engaged in commercial,industrial,financial and similar activities,

whether organised in corporate or in other forms.They include organisations

such as mutual insurance companies and other mutual co-operative entities that

provide dividends or other economic benefits directly and proportionately to

their owners,members or participants.Although IFRSs are not designed to

apply to not-for-profit activities in the private sector,public sector or

government,entities with such activities may find them appropriate.The

International Public Sector Accounting Standards Board(IPSASB)prepares

accounting standards for governments and other public sector entities,other

than government business entities,based on IFRSs.

10IFRSs apply to all general purpose financial statements.Such financial statements are directed towards the common information needs of a wide range

of users,for example,shareholders,creditors,employees and the public at large.

The objective of financial statements is to provide information about the

financial position,performance and cash flows of an entity that is useful to

those users in making economic decisions.

11A complete set of financial statements includes a statement of financial position,

a statement of comprehensive income,a statement of changes in equity,a

statement of cash flows,and accounting policies and explanatory notes.When a

separate income statement is presented in accordance with IAS1Presentation of

Financial Statements(as revised in2007),it is part of that complete set.In the

interest of timeliness and cost considerations and to avoid repeating

information previously reported,an entity may provide less information in its

interim financial statements than in its annual financial statements.IAS34

Interim Financial Reporting prescribes the minimum content of complete or

condensed financial statements for an interim period.The term‘financial

statements’includes a complete set of financial statements prepared for an

interim or annual period,and condensed financial statements for an interim

period.

12Some IFRSs permit different treatments for given transactions and events.The IASB’s objective is to require like transactions and events to be accounted for and

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reported in a like way and unlike transactions and events to be accounted for

and reported differently,both within an entity over time and among entities.

Consequently,the IASB intends not to permit choices in accounting treatment.

Also,the IASB has reconsidered,and will continue to reconsider,those

transactions and events for which IFRSs permit a choice of accounting

treatment,with the objective of reducing the number of those choices.

13Standards approved by the IASB include paragraphs in bold type and plain type, which have equal authority.Paragraphs in bold type indicate the main

principles.An individual standard should be read in the context of the objective

stated in that standard and this Preface.

14Interpretations of IFRSs are prepared by the Interpretations Committee to give authoritative guidance on issues that are likely to receive divergent or

unacceptable treatment,in the absence of such guidance.

15IAS1(as revised in2007)includes the following requirement:

An entity whose financial statements comply with IFRSs shall make an explicit and

unreserved statement of such compliance in the notes.An entity shall not

describe financial statements as complying with IFRSs unless they comply with all

the requirements of IFRSs.

16Any limitation of the scope of an IFRS is made clear in the standard.

Due process

17IFRSs are developed through an international due process that involves accountants,financial analysts and other users of financial statements,the

business community,stock exchanges,regulatory and legal authorities,

academics and other interested individuals and organisations from around the

world.The IASB consults,in public meetings,the Advisory Council on major

projects,agenda decisions and work priorities,and discusses technical matters

in meetings that are open to public observation.Due process for projects

normally,but not necessarily,involves the following steps(the steps that are

required under the terms of the IFRS Foundation’s Constitution are indicated by

an asterisk*):

(a)the staff are asked to identify and review all the issues associated with

the topic and to consider the application of the Conceptual Framework to

the issues;

(b)study of national accounting requirements and practice and an

exchange of views about the issues with national standard-setters;

(c)consulting the Trustees and the Advisory Council about the advisability

of adding the topic to the IASB’s agenda;*6

(d)formation of an advisory group to give advice to the IASB on the project;

(e)publishing for public comment a discussion document;

(f)publishing for public comment an exposure draft(including any

dissenting opinions held by IASB members)approved by at least nine 6Beginning no later than30June2011the IASB is required to carry out a public consultation on its agenda every three years.

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votes of the IASB if there are fewer than sixteen members,or by ten of its

members if there are sixteen members;*

(g)normally publishing with an exposure draft a basis for conclusions and

the alternative views of any IASB member who opposes publication;*

(h)consideration of all comments received within the comment period on

discussion documents and exposure drafts;*

(i)consideration of the desirability of holding a public hearing and of the

desirability of conducting field tests and,if considered desirable,holding

such hearings and conducting such tests;

(j)approval of a standard by at least nine votes of the IASB if there are fewer than sixteen members,or by ten of its members if there are sixteen

members;*and

(k)publishing with a standard(i)a basis for conclusions,explaining,among other things,the steps in the IASB’s due process and how the IASB dealt

with public comments on the exposure draft,and(ii)the dissenting

opinion of any IASB member.*

18Interpretations of IFRSs are developed through an international due process that involves accountants,financial analysts and other users of financial statements,

the business community,stock exchanges,regulatory and legal authorities,

academics and other interested individuals and organisations from around the

world.The Interpretations Committee discusses technical matters in meetings

that are open to public observation.The due process for each project normally,

but not necessarily,involves the following steps(the steps that are required

under the terms of the IFRS Foundation’s Constitution are indicated by an

asterisk*):

(a)the staff are asked to identify and review all the issues associated with

the topic and to consider the application of the Conceptual Framework to

the issues;

(b)consideration of the implications for the issues of the hierarchy of IAS8

Accounting Policies,Changes in Accounting Estimates and Errors;

(c)publication of a draft Interpretation for public comment if no more than

four Committee members have voted against the proposal;*

(d)consideration of all comments received within the comment period on a

draft Interpretation;*

(e)approval by the Interpretations Committee of an Interpretation if no

more than four Committee members have voted against the

Interpretation after considering public comments on the draft

Interpretation;*and

(f)approval of the Interpretation by at least nine votes of the IASB if there

are fewer than sixteen members,or by ten of its members if there are

sixteen members.*

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Timing of application of International Financial Reporting

Standards

19IFRSs apply from a date specified in the document.New or revised IFRSs set out transitional provisions to be applied on their initial application.

20The IASB has no general policy of exempting transactions occurring before a specific date from the requirements of new IFRSs.When financial statements

are used to monitor compliance with contracts and agreements,a new IFRS may

have consequences that were not foreseen when the contract or agreement was

finalised.For example,covenants contained in banking and loan agreements

may impose limits on measures shown in a borrower’s financial statements.The

IASB believes the fact that financial reporting requirements evolve and change

over time is well understood and would be known to the parties when they

entered into the agreement.It is up to the parties to determine whether the

agreement should be insulated from the effects of a future IFRS,or,if not,the

manner in which it might be renegotiated to reflect changes in reporting rather

than changes in the underlying financial condition.

21Exposure drafts are issued for comment and their proposals are subject to revision.Until the effective date of an IFRS,the requirements of any IFRS that

would be affected by proposals in an exposure draft remain in force.

Language

22The approved text of any discussion document,exposure draft or IFRS is that approved by the IASB in the English language.The IASB may approve

translations in other languages,provided that the translation is prepared in

accordance with a process that provides assurance of the quality of the

translation,and the IASB may license other translations.

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The Conceptual Framework for Financial Reporting

The Conceptual Framework was issued by the International Accounting Standards Board in September2010.It superseded the Framework for the Preparation and Presentation of Financial Statements.

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Conceptual Framework

C ONTENTS

from paragraph FOREWORD

THE CONCEPTUAL FRAMEWORK FOR FINANCIAL

REPORTING

INTRODUCTION

Purpose and status

Scope

CHAPTERS

1The objective of general purpose financial reporting OB1 2The reporting entity to be added

3Qualitative characteristics of useful financial information QC1 4The Framework(1989):the remaining text 4.1

FOR THE ACCOMPANYING DOCUMENTS LISTED BELOW,SEE PART B OF

THIS EDITION

APPROVAL BY THE BOARD OF THE CONCEPTUAL FRAMEWORK2010

BASIS FOR CONCLUSIONS ON CHAPTERS1AND3

TABLE OF CONCORDANCE

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Conceptual Framework

Foreword

The International Accounting Standards Board is currently in the process of updating its conceptual framework.This conceptual framework project is conducted in phases.

As a chapter is finalised,the relevant paragraphs in the Framework for the Preparation and Presentation of Financial Statements that was published in1989will be replaced.When the conceptual framework project is completed,the Board will have a complete,comprehensive and single document called the Conceptual Framework for Financial Reporting.

This version of the Conceptual Framework includes the first two chapters the Board published as a result of its first phase of the conceptual framework project—Chapter1The objective of general purpose financial reporting and Chapter3Qualitative characteristics of useful financial information.Chapter2will deal with the reporting entity concept.The Board published an exposure draft on this topic in March2010with a comment period that ended on16July 2010.Chapter4contains the remaining text of the Framework(1989).The table of concordance,at the end of this publication,shows how the contents of the Framework(1989) and the Conceptual Framework(2010)correspond.

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The Introduction has been carried forward from the Framework(1989).This will be updated when the IASB considers the purpose of the Conceptual Framework.Until then,the purpose and the status of the Conceptual Framework are the same as before. Introduction

Financial statements are prepared and presented for external users by many entities around the world.Although such financial statements may appear similar from country to country,there are differences which have probably been caused by a variety of social, economic and legal circumstances and by different countries having in mind the needs of different users of financial statements when setting national requirements.

These different circumstances have led to the use of a variety of definitions of the elements of financial statements:for example,assets,liabilities,equity,income and expenses.They have also resulted in the use of different criteria for the recognition of items in the financial statements and in a preference for different bases of measurement.The scope of the financial statements and the disclosures made in them have also been affected.

The International Accounting Standards Board is committed to narrowing these differences by seeking to harmonise regulations,accounting standards and procedures relating to the preparation and presentation of financial statements.It believes that further harmonisation can best be pursued by focusing on financial statements that are prepared for the purpose of providing information that is useful in making economic decisions.

The Board believes that financial statements prepared for this purpose meet the common needs of most users.This is because nearly all users are making economic decisions,for example:

(a)to decide when to buy,hold or sell an equity investment.

(b)to assess the stewardship or accountability of management.

(c)to assess the ability of the entity to pay and provide other benefits to its employees.

(d)to assess the security for amounts lent to the entity.

(e)to determine taxation policies.

(f)to determine distributable profits and dividends.

(g)to prepare and use national income statistics.

(h)to regulate the activities of entities.

The Board recognises,however,that governments,in particular,may specify different or additional requirements for their own purposes.These requirements should not,however, affect financial statements published for the benefit of other users unless they also meet the needs of those other users.

Financial statements are most commonly prepared in accordance with an accounting model based on recoverable historical cost and the nominal financial capital maintenance concept.Other models and concepts may be more appropriate in order to meet the objective of providing information that is useful for making economic decisions although there is at present no consensus for change.This Conceptual Framework has been developed so that it is applicable to a range of accounting models and concepts of capital and capital maintenance.

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Conceptual Framework Purpose and status

This Conceptual Framework sets out the concepts that underlie the preparation and presentation of financial statements for external users.The purpose of the Conceptual Framework is:

(a)to assist the Board in the development of future IFRSs and in its review of existing

IFRSs;

(b)to assist the Board in promoting harmonisation of regulations,accounting

standards and procedures relating to the presentation of financial statements by providing a basis for reducing the number of alternative accounting treatments permitted by IFRSs;

(c)to assist national standard-setting bodies in developing national standards;

(d)to assist preparers of financial statements in applying IFRSs and in dealing with

topics that have yet to form the subject of an IFRS;

(e)to assist auditors in forming an opinion on whether financial statements comply

with IFRSs;

(f)to assist users of financial statements in interpreting the information contained in

financial statements prepared in compliance with IFRSs;and

(g)to provide those who are interested in the work of the IASB with information about

its approach to the formulation of IFRSs.

This Conceptual Framework is not an IFRS and hence does not define standards for any particular measurement or disclosure issue.Nothing in this Conceptual Framework overrides any specific IFRS.

The Board recognises that in a limited number of cases there may be a conflict between the Conceptual Framework and an IFRS.In those cases where there is a conflict,the requirements of the IFRS prevail over those of the Conceptual Framework.As,however,the Board will be guided by the Conceptual Framework in the development of future IFRSs and in its review of existing IFRSs,the number of cases of conflict between the Conceptual Framework and IFRSs will diminish through time.

The Conceptual Framework will be revised from time to time on the basis of the Board’s experience of working with it.

Scope

The Conceptual Framework deals with:

(a)the objective of financial reporting;

(b)the qualitative characteristics of useful financial information;

(c)the definition,recognition and measurement of the elements from which financial

statements are constructed;and

(d)concepts of capital and capital maintenance.

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Conceptual Framework

C ONTENTS

from paragraph CHAPTER1:THE OBJECTIVE OF GENERAL PURPOSE

FINANCIAL REPORTING

INTRODUCTION OB1 OBJECTIVE,USEFULNESS AND LIMITATIONS OF GENERAL PURPOSE

FINANCIAL REPORTING OB2 INFORMATION ABOUT A REPORTING ENTITY’S ECONOMIC RESOURCES,

CLAIMS AGAINST THE ENTITY AND CHANGES IN RESOURCES AND CLAIMS OB12 Economic resources and claims OB13 Changes in economic resources and claims OB15 Financial performance reflected by accrual accounting OB17 Financial performance reflected by past cash flows OB20 Changes in economic resources and claims not resulting from financial

performance OB21 A20

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Chapter1:The objective of general purpose financial reporting Introduction

OB1The objective of general purpose financial reporting forms the foundation of the Conceptual Framework.Other aspects of the Conceptual Framework—a reporting

entity concept,the qualitative characteristics of,and the constraint on,useful

financial information,elements of financial statements,recognition,

measurement,presentation and disclosure—flow logically from the objective. Objective,usefulness and limitations of general purpose financial reporting

OB2The objective of general purpose financial reporting1is to provide financial information about the reporting entity that is useful to existing and potential

investors,lenders and other creditors in making decisions about providing

resources to the entity.Those decisions involve buying,selling or holding equity

and debt instruments,and providing or settling loans and other forms of credit.

OB3Decisions by existing and potential investors about buying,selling or holding equity and debt instruments depend on the returns that they expect from an

investment in those instruments,for example dividends,principal and interest

payments or market price increases.Similarly,decisions by existing and

potential lenders and other creditors about providing or settling loans and other

forms of credit depend on the principal and interest payments or other returns

that they expect.Investors’,lenders’and other creditors’expectations about

returns depend on their assessment of the amount,timing and uncertainty of

(the prospects for)future net cash inflows to the entity.Consequently,existing

and potential investors,lenders and other creditors need information to help

them assess the prospects for future net cash inflows to an entity.

OB4To assess an entity’s prospects for future net cash inflows,existing and potential investors,lenders and other creditors need information about the resources of

the entity,claims against the entity,and how efficiently and effectively the

entity’s management and governing board2have discharged their

responsibilities to use the entity’s resources.Examples of such responsibilities

include protecting the entity’s resources from unfavourable effects of economic

factors such as price and technological changes and ensuring that the entity

complies with applicable laws,regulations and contractual provisions.

Information about management’s discharge of its responsibilities is also useful

for decisions by existing investors,lenders and other creditors who have the

right to vote on or otherwise influence management’s actions.

OB5Many existing and potential investors,lenders and other creditors cannot require reporting entities to provide information directly to them and must rely

1Throughout this Conceptual Framework,the terms financial reports and financial reporting refer to general purpose financial reports and general purpose financial reporting unless specifically indicated otherwise. 2Throughout this Conceptual Framework,the term management refers to management and the governing board of an entity unless specifically indicated otherwise.

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on general purpose financial reports for much of the financial information they

need.Consequently,they are the primary users to whom general purpose

financial reports are directed.

OB6However,general purpose financial reports do not and cannot provide all of the information that existing and potential investors,lenders and other creditors

need.Those users need to consider pertinent information from other sources,

for example,general economic conditions and expectations,political events and

political climate,and industry and company outlooks.

OB7General purpose financial reports are not designed to show the value of a reporting entity;but they provide information to help existing and potential

investors,lenders and other creditors to estimate the value of the reporting

entity.

OB8Individual primary users have different,and possibly conflicting,information needs and desires.The Board,in developing financial reporting standards,will

seek to provide the information set that will meet the needs of the maximum

number of primary users.However,focusing on common information needs

does not prevent the reporting entity from including additional information

that is most useful to a particular subset of primary users.

OB9The management of a reporting entity is also interested in financial information about the entity.However,management need not rely on general purpose

financial reports because it is able to obtain the financial information it needs

internally.

OB10Other parties,such as regulators and members of the public other than investors,lenders and other creditors,may also find general purpose financial

reports useful.However,those reports are not primarily directed to these other

groups.

OB11To a large extent,financial reports are based on estimates,judgements and models rather than exact depictions.The Conceptual Framework establishes the

concepts that underlie those estimates,judgements and models.The concepts

are the goal towards which the Board and preparers of financial reports strive.

As with most goals,the Conceptual Framework’s vision of ideal financial reporting

is unlikely to be achieved in full,at least not in the short term,because it takes

time to understand,accept and implement new ways of analysing transactions

and other events.Nevertheless,establishing a goal towards which to strive is

essential if financial reporting is to evolve so as to improve its usefulness.

Information about a reporting entity’s economic

resources,claims against the entity and changes in

resources and claims

OB12General purpose financial reports provide information about the financial position of a reporting entity,which is information about the entity’s economic

resources and the claims against the reporting entity.Financial reports also

provide information about the effects of transactions and other events that A22

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change a reporting entity’s economic resources and claims.Both types of

information provide useful input for decisions about providing resources to an

entity.

Economic resources and claims

OB13Information about the nature and amounts of a reporting entity’s economic resources and claims can help users to identify the reporting entity’s financial

strengths and weaknesses.That information can help users to assess the

reporting entity’s liquidity and solvency,its needs for additional financing and

how successful it is likely to be in obtaining that https://www.360docs.net/doc/a017244290.html,rmation about

priorities and payment requirements of existing claims helps users to predict

how future cash flows will be distributed among those with a claim against the

reporting entity.

OB14Different types of economic resources affect a user’s assessment of the reporting entity’s prospects for future cash flows differently.Some future cash flows

result directly from existing economic resources,such as accounts receivable.

Other cash flows result from using several resources in combination to produce

and market goods or services to customers.Although those cash flows cannot be

identified with individual economic resources(or claims),users of financial

reports need to know the nature and amount of the resources available for use

in a reporting entity’s operations.

Changes in economic resources and claims

OB15Changes in a reporting entity’s economic resources and claims result from that entity’s financial performance(see paragraphs OB17–OB20)and from other

events or transactions such as issuing debt or equity instruments(see

paragraph OB21).To properly assess the prospects for future cash flows from the

reporting entity,users need to be able to distinguish between both of these

changes.

OB16Information about a reporting entity’s financial performance helps users to understand the return that the entity has produced on its economic resources.

Information about the return the entity has produced provides an indication of

how well management has discharged its responsibilities to make efficient and

effective use of the reporting entity’s https://www.360docs.net/doc/a017244290.html,rmation about the

variability and components of that return is also important,especially in

assessing the uncertainty of future cash https://www.360docs.net/doc/a017244290.html,rmation about a reporting

entity’s past financial performance and how its management discharged its

responsibilities is usually helpful in predicting the entity’s future returns on its

economic resources.

Financial performance reflected by accrual accounting

OB17Accrual accounting depicts the effects of transactions and other events and circumstances on a reporting entity’s economic resources and claims in the

periods in which those effects occur,even if the resulting cash receipts and

payments occur in a different period.This is important because information

about a reporting entity’s economic resources and claims and changes in its

economic resources and claims during a period provides a better basis for

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Conceptual Framework

assessing the entity’s past and future performance than information solely

about cash receipts and payments during that period.

OB18Information about a reporting entity’s financial performance during a period, reflected by changes in its economic resources and claims other than by

obtaining additional resources directly from investors and creditors(see

paragraph OB21),is useful in assessing the entity’s past and future ability to

generate net cash inflows.That information indicates the extent to which the

reporting entity has increased its available economic resources,and thus its

capacity for generating net cash inflows through its operations rather than by

obtaining additional resources directly from investors and creditors.

OB19Information about a reporting entity’s financial performance during a period may also indicate the extent to which events such as changes in market prices or

interest rates have increased or decreased the entity’s economic resources and

claims,thereby affecting the entity’s ability to generate net cash inflows.

Financial performance reflected by past cash flows

OB20Information about a reporting entity’s cash flows during a period also helps users to assess the entity’s ability to generate future net cash inflows.It

indicates how the reporting entity obtains and spends cash,including

information about its borrowing and repayment of debt,cash dividends or other

cash distributions to investors,and other factors that may affect the entity’s

liquidity or https://www.360docs.net/doc/a017244290.html,rmation about cash flows helps users understand a

reporting entity’s operations,evaluate its financing and investing activities,

assess its liquidity or solvency and interpret other information about financial

performance.

Changes in economic resources and claims not resulting from

financial performance

OB21A reporting entity’s economic resources and claims may also change for reasons other than financial performance,such as issuing additional ownership shares.

Information about this type of change is necessary to give users a complete

understanding of why the reporting entity’s economic resources and claims

changed and the implications of those changes for its future financial

performance.

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Conceptual Framework

CHAPTER2:THE REPORTING ENTITY

[to be added]

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Conceptual Framework

C ONTENTS

from paragraph CHAPTER3:QUALITATIVE CHARACTERISTICS OF USEFUL FINANCIAL INFORMATION

INTRODUCTION QC1 QUALITATIVE CHARACTERISTICS OF USEFUL FINANCIAL INFORMATION QC4 Fundamental qualitative characteristics QC5 Relevance QC6 Faithful representation QC12 Applying the fundamental qualitative characteristics QC17 Enhancing qualitative characteristics QC19 Comparability QC20 Verifiability QC26 Timeliness QC29 Understandability QC30 Applying the enhancing characteristics QC33 THE COST CONSTRAINT ON USEFUL FINANCIAL REPORTING QC35

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Conceptual Framework Chapter3:Qualitative characteristics of useful financial information

Introduction

QC1The qualitative characteristics of useful financial information discussed in this chapter identify the types of information that are likely to be most useful to the

existing and potential investors,lenders and other creditors for making

decisions about the reporting entity on the basis of information in its financial

report(financial information).

QC2Financial reports provide information about the reporting entity’s economic resources,claims against the reporting entity and the effects of transactions and

other events and conditions that change those resources and claims.(This

information is referred to in the Conceptual Framework as information about the

economic phenomena.)Some financial reports also include explanatory

material about management’s expectations and strategies for the reporting

entity,and other types of forward-looking information.

QC3The qualitative characteristics of useful financial information3apply to financial information provided in financial statements,as well as to financial information

provided in other ways.Cost,which is a pervasive constraint on the reporting

entity’s ability to provide useful financial information,applies similarly.

However,the considerations in applying the qualitative characteristics and the

cost constraint may be different for different types of information.For example,

applying them to forward-looking information may be different from applying

them to information about existing economic resources and claims and to

changes in those resources and claims.

Qualitative characteristics of useful financial information

QC4If financial information is to be useful,it must be relevant and faithfully represent what it purports to represent.The usefulness of financial information

is enhanced if it is comparable,verifiable,timely and understandable.

Fundamental qualitative characteristics

QC5The fundamental qualitative characteristics are relevance and faithful representation.

Relevance

QC6Relevant financial information is capable of making a difference in the decisions made by https://www.360docs.net/doc/a017244290.html,rmation may be capable of making a difference in a decision

even if some users choose not to take advantage of it or are already aware of it

from other sources.

QC7Financial information is capable of making a difference in decisions if it has predictive value,confirmatory value or both.

3Throughout this Conceptual Framework,the terms qualitative characteristics and constraint refer to the qualitative characteristics of,and the constraint on,useful financial information.

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Conceptual Framework

QC8Financial information has predictive value if it can be used as an input to processes employed by users to predict future outcomes.Financial information

need not be a prediction or forecast to have predictive value.Financial

information with predictive value is employed by users in making their own

predictions.

QC9Financial information has confirmatory value if it provides feedback about (confirms or changes)previous evaluations.

QC10The predictive value and confirmatory value of financial information are https://www.360docs.net/doc/a017244290.html,rmation that has predictive value often also has confirmatory

value.For example,revenue information for the current year,which can be

used as the basis for predicting revenues in future years,can also be compared

with revenue predictions for the current year that were made in past years.The

results of those comparisons can help a user to correct and improve the

processes that were used to make those previous predictions.

Materiality

QC11Information is material if omitting it or misstating it could influence decisions that users make on the basis of financial information about a specific reporting

entity.In other words,materiality is an entity-specific aspect of relevance based

on the nature or magnitude,or both,of the items to which the information

relates in the context of an individual entity’s financial report.Consequently,

the Board cannot specify a uniform quantitative threshold for materiality or

predetermine what could be material in a particular situation.

Faithful representation

QC12Financial reports represent economic phenomena in words and numbers.To be useful,financial information must not only represent relevant phenomena,but

it must also faithfully represent the phenomena that it purports to represent.

To be a perfectly faithful representation,a depiction would have three

characteristics.It would be complete,neutral and free from error.Of course,

perfection is seldom,if ever,achievable.The Board’s objective is to maximise

those qualities to the extent possible.

QC13A complete depiction includes all information necessary for a user to understand the phenomenon being depicted,including all necessary

descriptions and explanations.For example,a complete depiction of a group of

assets would include,at a minimum,a description of the nature of the assets in

the group,a numerical depiction of all of the assets in the group,and a

description of what the numerical depiction represents(for example,original

cost,adjusted cost or fair value).For some items,a complete depiction may also

entail explanations of significant facts about the quality and nature of the items,

factors and circumstances that might affect their quality and nature,and the

process used to determine the numerical depiction.

QC14A neutral depiction is without bias in the selection or presentation of financial information.A neutral depiction is not slanted,weighted,emphasised,

de-emphasised or otherwise manipulated to increase the probability that

financial information will be received favourably or unfavourably by users.

Neutral information does not mean information with no purpose or no A28

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