1. Rangajewa Herath B.Sc. Accountancy and Financial Management(Sp.)(USJ) MBA-PIM(USJ), ACA

3. What is Financial Reporting?

4. A set of guiding principles that influence and direct decisions in a particular area. In accounting - provides guidance and apply in relation to a range of issues relating to preparation of financial statements. General purpose financial reporting, which meets the needs of external users of information.

5. Studies commenced in 1960 s FASB, USA Framework (1978), first conceptual framework to develop IASB Framework (First time in 1989 ) IASB Revised Framework (2010)

7.  The objective of general purpose financial reporting  The underlying assumption  The qualitative characteristics of useful financial information  The elements of the financial statements  The recognition and measurement of the elements of financial statements

8. 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.

9. Qualitative characteristics Fundamental Relevance Faithful representation Enhancing ComparabilityTimelinessVerifiabilityUnderstandability

10.  Asset  Liability  Equity  Income  Expenses

16. Recognition is the process of incorporating in the Statement of Financial Position or Statement of Comprehensive Income an item that meets:  The definition of an element of the financial statements and  The criteria for recognition; ▪ It is probable that any future economic benefit associated with the item will flow to or from an entity. (The probability of future economic benefit) ▪ The item has a cost or value that can be measured reliably. (Reliability of measurement)

17. The measurement is the process of determining the monetary amounts at which the elements of the financial statements are to be recognized and carried in the Statement of Financial Position and the Statement of Comprehensive Income.

18. Historical Cost Current Cost Realizable (Settlement) Value Present Value

19.  Accounting standards are more consistent and logical  Standard-setters become accountable for their decisions  Communication process is enhanced  The development of accounting standards become more economical  Emphasize the ‘decision usefulness’ role of financial reports

20. Burden on small organizations. Economic in focus of Conceptual framework. Representation of a codification of existing practice rather than prescribing an ‘ideal’ or logically derived approach to accounting.