Discussion the basic function of the conceptual framework in terms of financial reporting. In particular, there is a 'Rules versus Principles' debate in which the respective cases are made for tightly prescribed rules (students can think of these rules as the specific treatments indicated in accounting standards versus the general guidelines of the Conceptual framework. Students should note that regulators state that standards should be followed, and that the conceptual framework should be used only for guidance, where there is uncertainty as to the applicable rules. However, preparers (of financial statements) should disclose (in notes to the accounts) where strict adherence to standards causes the financial statements to deviate from a faithful representation of economic reality. So, the question that students need to be answered: Is there really a gap between rules-based General Purpose Financial Reporting and principles-based GPFR? 600-800 words