A conceptual framework establishes the concepts that underlie financial reporting. It is used by the users of financial statements to answer different questions about the recognition and measurement of financial items, specifically, the reporting rules, nature, functions, and limits of financial accounting and financial statements.

REQUIRED:

(a) As reflected in the conceptual framework triangle, identify and briefly explain the basic components of the conceptual framework.

(b) Briefly explain your views about the success of the conceptual framework. Justify your views with 4 (FOUR) key benefits.