AN ANALYSIS OF THE NEW CONCEPTUAL FRAMEWORK IN TERMS OF FINANCIAL REPORTING

Conceptual Framework, first version of which came into effect in 1989, is the basis in terms of the development and consistency of reporting standards in addition to being the foundation of financial reporting. This non-standardized framework not only determines the limits of accounting standards but also has the feature of a general understanding and a guide. A need to create an equilibrium between increase in intelligibility of Conceptual Framework which provides benefits in practice but drawbacks of it have been identified in time and a need to elaborate the content has arisen. It is perceived that the revision procedure which was initiated for this purpose ended after the creation of necessary drafts by International Accounting Standards Committee in 2012 and final version went in to effect in 29 March 2018. In this study, the importance and content of the conceptual framework were addressed and through a comparative analysis of the main components of conceptual framework and the revised conceptual framework have been explained. With the new conceptual framework, prudence, substance over form and measurement uncertainty were clarified and the definition of the reporting entity concept was added. Furthermore, concepts such as asset and liability have been redefined and changes have been made accordingly