On The Financial Accounting Conceptual Framework

Since the announcement of American Statements of Financial Accounting Concepts in 1978, the research on Conceptual Framework (CF) has been the core of financial accounting theory. Some countries and international organizations are learning from it in succession. It is broadly accepted that the CF with strict and consistent logic has been considered as the theoretic base of establishing accounting standards in the field of international accounting. So each standards setting-up body is imperative to have the guidance of a series of integrated CF when they launch on the establishment of standards. In this regard, the study of CF will be paid more attention in the near future.Considered as CF of China, our Fundamental Accounting Standards had been out of date. With the acceleration of enacting specific accounting standards, it brings forth the phenomenon that the news are conflict with the olds and then causes the confusion in accounting practice. From one perspective, the confusing use of fair value makes it more urgent to set up CF. Nowadays, China is establishing CF research groups to draft our own CF of financial accounting in Beijing, Shanghai and Xiamen. Therefore, the research of this paper has significant meaning not theoretically, but practically.First, this paper constructs the analyses framework that provides theoretic support to the necessity and feasibility of Chinese CF, which embody fair value. Second, we contrast the objectives that are supposed to be the jumping-off of CF between China and foreign countries, and then conclude the two-levels perspective of Chinese financial accounting objective. The first level is "decision-making utility perspective" and "accountability perspective" with the same importance; the second level is "decision-making utility perspective", which contains accountability perspective. Third, we dissect the quality characteristics of accounting information and build an accounting information quality characteristics chart with reliability, relevance and transparency as the core. Forth, we specifically study the essence of accounting components , and then study the recognition, measurement, recording and reporting of accounting and figure out that it is necessary to enlarge the meaning of recognition, the measurement with present value and fair value is both related and reliable, accounting recording and financial reporting should be included in the CF. Finally, On the foundation of analyses on the nature of accounting standards and theory of standard-circumstance, we build theChinese CF which embody fair value and draw a conclusion that Chinese CF contains fundamental theory level and standard-circumstance theory level.