Financial Accounting Standards Board (FASB) has supported the use of asset-based model while building their conceptual framework, such model has also been adopted while building the International Accounting Standards Board's (IASB) conceptual framework. Recent research, however, argues against that model and proposes another alternative model.

Required:

question

Critically discuss this statement and Explain the advantages of using alternative approaches?

(Note: Students should rely on one or both of the following references):

Dichev, I. D. (2008). On the balance sheet-based model of financial reporting. Accounting Horizons, 22(4), 453-470.

Dichev, I. D. (2017). On the conceptual foundations of financial reporting. Accounting and Business. Research, 47(6), 617-632.