Question

Question 2 - 4 marks (750 words) Identify the main users of accounting referred to within the AASB/IASB conceptual framework. Does the identification of particular users within the conceptual framework have implications for the future of accounting measurement? In your response you will need to consider the implications of the identification of particular users on the use of fair values and historical cost accounting.

Answer 1

• Users of Financial Statements

There are various different users of financial statements, each with different information needs.

The Conceptual framework lists the primary users of financial statements as:

1. Suppliers and trade creditors are interested in information that will help them determine whether the amounts owing to them will be paid on time.
2. Lenders – want information that will enable them to decide whether their loans will be paid when due, and whether or not to issue new loans to the entity.
3. Investors – who supply risk capital in the form of funding, this group are concerned with the risk inherent in, and the return provided by their investments
4. Customers will be interested in the continuance of the entity, especially if they depend on it themselves.
5. Employees – wish to know about the stability and profitability of their employers. This may give them confidence about their jobs and could be used to discuss salary and conditions of employment.
6. The Government and government agencies are interested in the allocation of resources and the activities of the entities in general.
7. The General public may be affected by an entity in a number of different ways, especially how an entity may contribute to the local economy.

2.

Yes in the development of future Accounting Standards and in its review of existing Accounting Standards to present better. it happens in the special case.

3.

fair value and historical cost accounting now everything is considered under a fair value accounting in my view fair value is a value which represents the true value of such assets our financial statements are more reliable under this system.