The study examines the importance of the IASB’s conceptual framework and analyzes how the key accounting principles are related to it. The current Conceptual Framework is neither a Standard nor an Interpretation and it doesn’t supersede any particular Standard or Interpretation as well. There is a possibility that in some cases, a conflict may arise between a standard and the Conceptual Framework. However, it is imperative for IASB to ensure that the disagreements between a standard and the conceptual framework must be minimized over the time, because the conceptual framework often facilitates IASB in the development and amendment of standards.
What is the conceptual framework?
The conceptual framework is a set of accounting principles which are actually a set of guidelines for the users as well as prepares of financial statements (Barth, Landsman & Lang, 2008). Even though the Conceptual Framework often facilitates ISB in the development and amendment of standards, however, in rare cases, it might be possible that the conceptual framework may not be able to facilitate ISB in generating the financial information of the entity which is helpful for the users of the financial statements of the entity.