The following extract is from ‘Comments of Leonard Spacek’, in R.T. Sprouse and M. Moonitz, A Tentative Set of Broad Accounting Principles for Business Enterprises, Accounting Research Study No. 3, AICPA, NewYork, 1962, reproduced in A. Belkaoui, Accounting Theory, Harcourt Brace Jovanovich.

A discussion of assets, liabilities, revenue and costs is premature and meaningless until the basic principles that will result in a fair presentation of the facts in the form of financial accounting and financial reporting are determined.This fairness of accounting and reporting must be for and to people, and these people represent the various segments of our society.

Required:

(a) Explain the term ‘fair’.

(b) Discuss the extent to which the IASC conceptual framework satisfies the above definition.