How does financial reporting information fit into business? Financial reporting ultimately serves a number of different desired outcomes. One of these is economic growth. It does not promote growth directly; instead, growth is promoted through a number of subordinate outcomes. One of these could be described as good business performance. This in turn is promoted through subordinate outcomes that could be described as good business decisions and good management. Financial reporting information is one type of information that helps people understand whether desired outcomes are being achieved. Have good decisions been made? Have they been well implemented? Have they led to good performance?… Read more
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.
The Objective of General Purpose Financial Reporting is the basis of the Conceptual Framework.
In addition the 2018 revised Conceptual Framework sets out:
- the qualitative characteristics of useful financial information;
- a description of the reporting entity and its boundary;
- definitions of an asset, a liability, equity, income and expenses and guidance supporting these definitions;
- criteria for including assets and liabilities in financial statements (recognition)