The accounting framework is a constitution for accountants around the world.
Standards issued by professional accounting organizations should be based on this framework.
The framework consists of basic assumptions such as the economic entity assumption and the monetary unit assumption, basic principles such as the matching principle and the historical cost principle, and also constraints such as conservatism. Certain aspects are incomplete, inaccurate, and misleading.

Below are some of the shortcomings in the accounting framework:

1.The definition of Assets:

The definition of an asset as resources that have future economic benefits owned by an entity is incomplete and inaccurate as this definition does not clarify tangible or intangible assets and it is also expected that practically each and every expenditure will generate future benefits.

International Accounting Standard 14 (IAS14) and Financial Accounting Standard 14 (FAS14):
The current standards of IAS 14 and FAS 14 that refer to reporting by segment also distort the conceptual framework of accounting, as those standards contradict the unit of account, as there is no need to report by segment independently. , since we treat all segments as a unit. .

3.Use of fair value in measurement:

Another deviation is the use of fair value in measurement. According to IAS 36, impairment of long-term assets, an asset is said to be impaired when its cost is less than its fair value. The application of the concept of fair value contradicts the principle of historical cost. Fair value requires the accountant’s judgment to determine this value, which will be chaos, as this will allow the accountant to be biased toward management when determining value, which will affect the fairness of financial reports.

The accounting profession has a deep need to adjust the accounting framework to meet current and anticipated IAS and FAS standards. We hope that the new standards of IFRS (International Financial Reporting Standards) realize the need for adjustment.