Economics at your fingertips  

Two conflicting definitions of relevance in the FASB Conceptual Framework

Myojung Cho, Oliver Kim and Steve C. Lim

Journal of Accounting and Public Policy, 2010, vol. 29, issue 6, 604-611

Abstract: In this paper we show that the FASB Conceptual Framework stipulates two mutually conflicting definitions of relevance. Both the original FASB Concepts Statement No. 2 of May 1980 and the IASB/FASB Exposure Draft of May 2008 define relevance as the pertinence of the selected economic phenomenon to the decisions of accounting users. However, both pronouncements also define relevance as the pertinence of accounting information to decisions. While many textbooks and conceptual frameworks of other countries use the second definition, we provide evidence that the first definition is more consistent with a model in which relevance and faithful representation are the two essential qualities required for the provision of useful accounting information. To improve internal consistency, the second definition should be removed from the Concepts Statement.

Date: 2010
References: Add references at CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Access Statistics for this article

Journal of Accounting and Public Policy is currently edited by L. A. Gordon

More articles in Journal of Accounting and Public Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

Page updated 2021-06-30
Handle: RePEc:eee:jappol:v:29:y::i:6:p:604-611