Uploaded by Allana Nicdao

Framework on preparation of financial statements

Intermediate Accounting 1
A Research paper on Framework on Presentation of
Financial Statements and its role to BSA students
and accountants
ABELEDA, Pauline Ellaine J.
BURBOS, Marielle Mae
JAVIER, Kristel Ann Joy M.
MALLONGA, Jaydelynn A.
MIRANDA, Alyzza Flor S.
NICDAO, Allana Joyce L.
According to the Merriam-Webster Dictionary, a framework is a noun which has a
definition of a basic conceptional structure (as of ideas) or a skeletal, openwork, or structural
frame. Framework in every area of expertise or study just like in Accounting varies in each other.
Talking about framework, specifically for accounting dealing with the preparation or presentation
of financial statements, it has the Conceptual Framework for Financial reporting which is a
complete, comprehensive and single document promulgated by the International Accounting
Standards Board (IASB). The Conceptual Framework is a summary of the terms and concepts that
underlie the preparation and presentation of financial statements for external users. In other
words, it describes the concepts for general purpose financial reporting. Also, it is an attempt to
provide an overall theoretical foundation for accounting. The Conceptual Framework is intended
to guide standard-setters, preparers, and users of financial information in the preparation and
presentation of financial statements. (Valix, Peralta, & Valix, 2019).
As for the framework on the preparation of financial statements, according to the
website, IASPlus from Deloitte, IAS 1 Presentation of Financial Statements sets out the overall
requirements for financial statements, including how they should be structured, the minimum
requirements for their content and overriding concepts such as going concern, the accrual basis
of accounting and the current/non-current distinction. The standard requires a complete set of
financial statements to comprise a statement of financial position, a statement of profit or loss
and other comprehensive income, a statement of changes in equity and a statement of cash
In PAS 1 or Philippine Accounting Standard 1, for the frequency of reporting, the financial
statements shall be presented at least annually. This will provide information about the financial
position, financial performance and cash flows of an entity that is useful to a wide range of users
in making economic decisions. (Valix, Peralta, & Valix, 2019). Just like the IAS 1, the PAS 1 shall
be applied to all general-purpose financial statements prepared and presented in
accordance with International Financial Reporting Standards (IFRSs). General purpose
financial statements are those that are intended to meet the needs of users who are not in
a position to demand reports tailored to meet their particular information needs.
The Bachelor of Science in Accountancy (BSA) program is composed of subjects in
accounting (financial, public, managerial), audit, administration, business laws, and taxation. Its
primary focus is not limited to business subjects, but to other fields as well, such as banking and
finance, government, social services, education, and more. The BSA students are the future
accountants that will serve in the industry. They are the ones who will study the frameworks and
standards of accounting.
According to the bizfluent, Accounting standards provide day-to-day guidance to
accountants to ensure the steady operation of the business. Thus, it will serve as guidance to
the BSA students as well because after all, they are the accountants on the process. In addition,
every person needs to systematically monitor or keep track of his personal finances – both his
resources and obligations. Financial information is needed by individuals specifically accounting
students. Accounting, which is a major course of the BSA students, involves the systematic
recognition, measurement, reporting, and interpretation of data that are related to the financial
activities of a nature or artificial person. Processing information in such a way that it will be useful
to the user is the primary purpose of accounting. The accountants and accounting students use
financial statements as a mean to communicate the status of an entity. Thus, Accounting is often
called the language of business.
Studying International Accounting Standards and Philippine Accounting Standards
(IAS/PAS) will benefit them when they proceed in their studies and support them in finding
decent jobs in the future. In other words, framework on presentation of financial statements is
crucial to the development of the students’ future career because it will serve as a fundamental
knowledge. It is recommended for the accounting students or accountants for it will accompany
them in their chosen career path. Also, understanding the framework will bring consistency to
accounting language, practices and statements, and will help them make educated financial
analysis and decisions.