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ACCA Applied Skills · Financial Reporting · The need for a conceptual framework and the characteristics of useful information

Which of the following is NOT an objective or purpose of the Conceptual Framework as stated by the IASB?

Determining permitted dividends is not a purpose of the Conceptual Framework. Its purposes are to help the IASB develop consistent Standards, help preparers choose policies where no Standard applies, and help everyone understand and interpret Standards. Distributable profit is governed by law.

  1. ATo assist the IASB in developing IFRS Standards based on consistent concepts
  2. BTo assist preparers in developing accounting policies when no Standard applies
  3. CTo assist all parties in understanding and interpreting the Standards
  4. DTo determine the amount of dividends an entity is permitted to distributeCorrect

Explanation

The Framework's purposes are to help the IASB develop Standards, help preparers develop consistent policies where no Standard applies, and help all parties understand and interpret Standards. Dividend distribution limits are a matter of company law, not the Framework.

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