Conceptual Framework

The conceptual framework has been described as the constitution of accounting providing and underlying foundation for U.S. accounting standards. It is used in research as a desired or planned approach. In accounting, it guides and oversees the development of standards (e.g., GAAP) (part of our next lesson). The conceptual framework developed by the Financial Accounting Standards Board (FASB) has been through a long process and remains a continually changing project. This lesson takes an in-depth look at the FASB's conceptual framework.

The FASB set forth to build a conceptual framework that all standards would adhere to. The FASB has issued seven (some SFAC were superseded by SVAC 6 or 8) statements of financial accounting concepts (SFAC), which ultimately preside over the conceptual framework. Though you will not discuss each concept individually, you will discuss the hierarchy of characteristics of accounting information, based on information from each of the seven concept statements. The next page in the lesson shows a table of the statements of financial accounting concepts (SFAC) and the superseded statements.