The Conceptual Framework is a body of interrelated objectives and fundamentals. The objectives identify the goals and purposes of financial reporting and the fundamentals are the underlying concepts that help achieve those objectives. Those concepts provide guidance in selecting transactions, events, and circumstances to be accounted for, how they should be recognized and measured, and how they should be summarized and reported. A Statement of Financial Accounting Concepts is nonauthoritative and does not establish or change generally accepted accounting standards.

On December 22, 2021, the Financial Accounting Standards Board (FASB) issued FASB Concepts Statement No. 8, Conceptual Framework for Financial Reporting—Chapter 7, Presentation.

Chapter 7 identifies factors for the Board to consider when deciding how items should be displayed in the financial statements. The Board will assign priority to the factors based on the item being evaluated for presentation purposes. The priority of the factors would be determined in the context of best meeting the objective of financial reporting. Chapter 7 supersedes portions of Concepts Statement No. 5, Recognition and Measurement in Financial Statements of Business Enterprises.

Additional Information: