Professor Adams' Lecture Materials

LO1-06: Explain the purpose of the conceptual framework.

The conceptual framework is the supporting structure or the underlying foundation for US accounting standards.

1. Referred to as the accounting constitution.
2. Does not directly prescribe GAAP. [01]
3. Does prescribe the nature, function, and limits of financial accounting and reporting.

[01] Unlike in the United States, internationally the conceptual framework guides the setting of IFRS.

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