What is the objective of financial reporting? Why is it so important?
The boards propose that the objective of general purpose financial reporting is to provide financial information about the reporting entity that is useful to present and potential equity investors, lenders, and other creditors in making decisions in their capacity as capital providers. The objective of financial reporting is the foundation of the conceptual framework. Other aspects of the framework – qualitative characteristics, elements of financial statements, recognition and measurement – will build on that foundation with the aim of ensuring that financial reporting achieves its objective.
