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The draft chapters define the objective of financial reporting, and the qualitative characteristics of decision-useful financial information. The document is the first to result from the boards’ joint project on the conceptual framework.
At present, the boards are each guided by their own individual framework. The preliminary views restate the existing frameworks’ definition of the objective of general purpose external financial reporting as providing information that is useful to present and potential investors and creditors and others in making investment, credit and similar resource allocation decisions. The document also identifies relevance, faithful representation, comparability (including consistency) and understandability among the characteristics of financial information that make it decision-useful.
From 17 July, the text of the Discussion Paper will be available freely from the IASB’s Website.
Deadline for comments is 3 November 2006.
Press release
Conceptual Framework