Describe the conceptual framework used by FASB and the IASB to guide their standard-setting decisions
CONCEPTUAL FRAMEWORK
Both the FASB and the IASB rely on a conceptual framework to guide their standard-setting
decisions. The conceptual framework is not a rigorous set of principles from which standard
setters can logically deduce appropriate financial reporting standards. Its purpose is to guide
standard-setting decisions in order to enhance the quality and consistency of those decisions.
The FASB and the IASB have separately developed their conceptual frameworks, and
those frameworks are similar. The two standard-setting bodies are currently working to
develop a common conceptual framework for financial reporting.
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