ACCA Applied Knowledge · Financial Accounting · Key principles and concepts of accounting
Which statement about the Conceptual Framework for Financial Reporting is correct?
The Conceptual Framework helps the IASB develop standards and guides preparers where no standard covers an issue. It is not a standard itself, so if a specific IFRS conflicts with it, the standard prevails. It does not give detailed measurement rules.
- AIt overrides an IFRS Accounting Standard where the two conflict
- BIt sets out the detailed rules for measuring each class of asset
- CIt assists the IASB in developing standards, and where a standard conflicts with it the standard prevailsCorrect
- DIt is only applicable to listed entities
Explanation
The Conceptual Framework underpins the IASB's development of standards and helps preparers where no standard applies. It is not itself a standard, so where a specific IFRS conflicts with it, the IFRS prevails. Detailed measurement rules sit in individual standards, and the Framework is not limited to listed entities.
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