Question

Refer to the following issues regarding the conceptual framework and answer the questions below.

The conceptual framework includes a discussion of the constraints of cost effectiveness.

Assume that the International Accounting Standards Board (IASB) is considering revising an important accounting standard. Discuss and explain the desired benefit from revising an accounting standard, and some of the possible costs that could result from such a revision. Discuss what the IASB will do to assess the possible benefits and costs of a proposed revision of an accounting stand ard.

Answer 1

1. What is the desired benefit from revising an accounting standard?

2. What are the some of the possible costs that could result from a revision of an accounting standard?

3. What does the IASB do in order to assess possible benefits and costs of a proposed revision of an accounting standard?

Refer to the below image for more detailed explanation.

n . What is the desired benefit frorn revising an a Mounting Standard? Rejoitement O wet: The desired benefit is that the new Standard will provide a better set of information to external users - This will then increase the efficiency of the resource allocation Process - Beher is defined by the IASB in terms of an appropriate combination et relevance and faithful representation - : @: What are some result from a of the revision possible of an costs that could accounting Standard ? Reasurement Answer: The costs could include increased information a gathering, processing and dissemination costs to the companies affected, increased inter preking costs to osers, and adverse economic consequences to the companies, their investors, creditors, employees other interest groups as well as to soccery as a whole- : What does the IASB do in order benefits and costs of a proposed alvonting Standard ? to assess possible revision of an Requirement Answo: The TASR undertakes a series of daborate information gathering Steps before issuing a substantive accounting Standard. These steps include open hearings, deliberations and scopoests for written comments. These steps provide information to the TANTS as to the possible benefits and costs of the new Standard-