Essay about Conceptual Framework

1379 Words Dec 9th, 2012 6 Pages
C38FA-Financial Accounting | November 26
2012
| Topic- Conceptual Framework
Name: Kashish Jashnani
HW ID: H00114889

Conceptual Framework

Introduction

Conceptual framework is defined as the “a coherent system of interrelated objectives and fundamentals that can lead to consistent standards and that prescribes the nature, function, and limits of financial accounting and financial statements.” [wiley.com, 2002]. The conceptual framework is needed in the accounting body due to two reasons. Firstly, to be beneficial, standard setting must form on and transmit to a well-known body of concepts and purposes. Secondly, new and developing real-world troubles should be more rapidly solved by reference to a current
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Finance lease is a lease that transfers all risks and rewards to the lessee. Whereas, an operating lease is for shorter span of useful life of the asset, also risks and rewards are non-transferable. [iasplus.com, 2012].

There are few indicators to identify an operating lease, first is, an operating lease should be recorded as expenditure in the profit and loss account. Second is, the lease is cancellable as per

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