Describe the primary users of financial statements according to the conceptual framework.
|
EN Translate:
EN
SubscribeEmail Address EXPLORING International Financial Reporting Standards
nearshoreme Salam Tower, Beside Al-Salam International Hospital, Nile Corniche, Maadi, Cairo, Egypt +201069915551 Copyright © 2020 Nearshore Middle East S.A.E - All Rights Reserved. AnnouncementWelcome! Check out our new IFRS HUB and subscribe now to receive our FREE newsletters!! Learn more This website uses cookies.We use cookies to analyze website traffic and optimize your website experience. By accepting our use of cookies, your data will be aggregated with all other user data. DeclineAccept THE CONCEPTUAL FRAMEWORK FOR FINANCIAL REPORTING 1 INTRODUCTION The Conceptual Framework sets out the concepts that underlie the preparation and presentation of financial statements for external users (Conceptual Framework, Section “Purpose and status”). The relationship between the Conceptual Framework and individual IFRSs can be described as follows.
2 THE OBJECTIVE OF GENERAL PURPOSE FINANCIAL REPORTING The objective of general purpose financial reporting is 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 (e.g. providing loans to the entity or buying equity instruments of the entity) (OB2). Existing and potential investors, lenders, and other creditors are the primary users to whom general purpose financial reports are directed (OB5). They require useful information in order to be able to assess the future cash flows of the ... Primary users of the financial statements are considered existing and potential investors, creditors, and lenders. Primary users obtain financial statement information and allow them to understand the overall health of the company such as its net cash flow status etc. Such users make decisions related to purchasing or selling interest in these reporting entities. Other information can be provided about the company such as information related to management and the board of directors. This will give primary users a greater understanding of qualitative characteristic about the company. Back To All Questions You might also be interested in... What is included in a company’s financial statements?At a very high-level, there are 5 key sections to a company’s financial statements. There may be certain other requirements for public companies, NFP’s, or governmental entities. However, the five main components include the balance sheet, income statement, changes in equity, cash flow statement, and the notes to the financial statements. What can financial statements tell readers?Financial statements can be used for just about anything the reader wants them to be used for! Financial statements can tell the reader about the economic resources owned by the company, the solvency and liquidity, as well as their ability to obtain financing. Financial statements also provide a high-level of the operations of the business.... Who are primary users of financial statements?Primary users of the financial statements are considered existing and potential investors, creditors, and lenders. Primary users obtain financial statement information and allow them to understand the overall health of the company such as its net cash flow status etc.
What is the primary purpose of the Conceptual Framework?The primary purpose of the Conceptual Framework was to assist the IASB in the development of future IFRSs and in its review of existing IFRSs. The Conceptual Framework may also assist preparers of financial statements in developing accounting policies for transactions or events not covered by existing standards.
What are the Conceptual Framework of financial statements?The Conceptual Framework for the Financial Reporting (let's title it just “Framework”) is a basic document that sets objectives and the concepts for general purpose financial reporting. Its predecessor, Framework for the preparation and presentation of the financial statements was issued back in 1989.
What is a primary objective of financial reporting as indicated in the Conceptual Framework?The primary objective of financial reporting is providing useful information which is helpful to the present and potential investors, the creditors, as well as other users. It helps them to make rational decisions.
|
