Purpose of International Accounting Standard Board
The purpose of International Accounting Standard Board is standardization of the accounting standards which can be accepted globally by different countries of the world. It has another important responsibility of promoting the utilization and application of the accounting standards for better results. International Accounting Standard Board established a framework which acted as a standard and guide to the organization (Walton, 2004, p 5-16). The framework is basically prepared to make the financial statements more meaningful and purposeful. The framework has four main objectives. First being the defining of the actual objectives of financial statements. Second being the identification of the features that make the required information useful. Third objective is defining the main components of the financial statements and fourth being providing the concepts for maintenance of the capital. International Accounting Standard Board is also responsible for formulating the International Financial Reporting Standards (IFRS). The framework contains the assumptions which are made related to International Financial Reporting Standards. The two assumptions are the accrual basis and the going concern. The former states that occurrence of the transaction is important i.e. A transaction is recorded when it happens rather not when the cash is received from the transaction.