Understanding the Purpose of Conceptual Framework for IFRS

What is the purpose of the Conceptual Framework?

If there were no framework for preparing financial statement, accounting standards would be developed in a random, haphazard way to deal with issues as they arise. This would result in standards which would be inconsistent with each other or legislation.

By having a single conceptual framework, preparers and users of financial statements understand that accounting practices and accounting standards are based on this common ideology.

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