PURPOSE AND STATUS OF THE FRAMEWORK
The FRSC Framework for the Preparation and Presentation of Financial Statements describes the basic concepts by which financial statements are prepared. The Framework serves as a guide to the Board in developing accounting standards and as a guide to resolving accounting issues that are not addressed directly in Philippine Accounting Standards or Philippine Financial Reporting Standards or Interpretations. The purpose of the framework as outlined is to:
a. Assist the Financial Reporting Standards Council (FRSC) in developing accounting standards that represent generally accepted accounting principle;
b. Assist the FRSC in its review and adoption of existing International Accounting Standards;
c. Assist preparers of the financial statements in applying FRSC Statements of Financial Accounting Standards and in dealing with topics that have yet to form the subject of an FRSC statement;
d. Assist auditors in forming an opinion as to whether financial statements conform with Philippine GAAP;
e. Assist users of financial statements in interpreting information contained in the financial statements prepared in conformity with Philippine GAAP;
f. Provide those who are interested in the work of the FRSC with information about its approach to the formulation of Statements of Financial Accounting Standards
Scope of the Framework:
- Defines the objectiveof financial statements;
- Identifies the qualitative characteristicsthat make information in financial statements useful; and
- Definesthe basic elements of financial statements and the concepts for recognizing and measuring them in financial statements.
- Concepts of capital and capital maintenance.