Professional Documents
Culture Documents
1. Vague definition
- Definition of asset and liabilities are rather vague and the recognition criteria
are couched in terms of probability which is subjective.
- Recognition criterion fails to offer any guidance on the measurement problem,
which is fundamental to accounting
- Definition is open-ended and it appears that any measure would be acceptable
as long as the cost or value can be reliably measure
2. Conceptual framework is intended as a fundamentally prescriptive project
- Aim is to provide guidance and prescriptions which is not based on observations
of current practice to practicing accountants on how to account for information
which is relevant for decision making
3. Do not resolve contemporary disclosure issue
- For deferred tax credits, treatment of costs of exploration in the oil and gas
industry and current value accounting
- Definition for liabilities is so general that we are unable to predict the boards
position on deferred tax.