 Today we are going to start conceptual framework of financial reporting. Now in this particular standard, rather in particular module, first of all let's see the learning outcomes, understand the role of ISB in financial reporting. ISB is the International Accounting Standard Board who frame these international financial reports. Who are the users of the financial statements? Assumption used in preparation of financial statements. Purpose of financial statements. Understand the importance of why IFRS are the definitive best practices for preparation of the financial statement. Now the financial statement framework and the objective of ISB, what basically ISB want to see when people are going to use these international financial reporting standards. To develop in particular interest a single set of high quality, understandable and enforceable global accounting standards that require high quality, transparent and comparable information in the financial statements to the users. We are not in a single company. We are a number of companies we are and we have different units in the same industry so we need comparable information so unless we put their reports in the same fashion in the same prospects only then it can be useful to the users. To promote the use and rigorous application of these standards they want really that every company at least which are listed on stock exchange should follow these international accounting standards. Now so far to bring the about conversion of national and IFRS to quality solution the word has been seeking the single set of highly qualified or quality global accounting standards to ensure adequate comparability. It means simply that they want globally to follow all these international account area of financial reporting standards. Now the other thing is to provide the financial information about reporting entity. Here reporting entity as I said it's not a single company it can be a group of companies also that it is useful to present and potential equity investors. Normally emphasis are on the shareholders but that's not enough. It's lenders and other creditors in decision making who about providing resources to the entity. Even the employees are providing services to the entity so they also are interested to know that the accounts are being prepared according to the financial reporting standards. Decision involving buying, selling or holding equity and debt instruments and providing or settling loans and other forms of credit. Then the objective of financial reporting identify investors and creditors at the primary user of the journal purpose statements. Now among the users as I said there are three groups basically one is the customer on the top. Customer is on top because they utilize our goods and services so that's why we are saying that they are on the top. Then we have the employees number two according to me employees because they provide services to the company and they do their best to promote the company's affair. Similarly then we have the creditors. Creditors here not only the suppliers of goods and services but also the shareholders and those who provide resources they are all creditors. Now government regulators are also very interested in it. Then researchers and analysts are also interested in it. Journal public at large they are also interested in it because they want quality product at a reasonable price. So unless you look into those international accounting standard what is their requirement how they want the account to be prepared then only then it is possible that we can serving all these users. The framework is built upon the fundamental understanding that the harmonization can be best be pursued by focusing on financial statement that are prepared for the purpose of providing information and that is useful in making economic decision. You know we are doing business let's say we are in a manufacturing business so we are producing some goods but the question is those who are outsider how they come to know that you are doing a good job unless you provide them some information and those information is supposed to be in the form of financial reports. The framework recognize that not all information need of all users can be addressed in a single set of financial statement however there are needs common to all users all the interested in the position and financial of the entity. Here there are results is the important thing that if you are buying and selling so at the end of the day are you making profit or loss. So people are interested to know how you are doing the business. Similarly at the end of the year you must know what are the assets and liabilities you have how much resources you generated and how much you used. Then now there is underlying the assumptions this is the important thing because we assume first of all we assume here that we in business are honest people. So when we are doing business when we are selling something the buyer is aware that we are giving them a best service the best goods. Similarly when we are borrowing money so we assume that we are going to return that money also. So interesting thing is that we are all honest people only than business activity can perform. So a cruel here means that it's not a question of receipt and payment it's a question of if something happened if some events is happened that will be recorded there and then. For example you're selling on credit record a sale but you're not receiving the money yet. You're using the light but you're not paying there and then but you have to record it that the question is that you are recording the events happen. Once the event is happened you must be recorded in your books of accounts. Now the effect of transaction and other events are recognized when they occur. Cash and cash equivalent is not received are not that important and they are recorded in the accounting records and reports in the financial statement of the periods to which they relate. It's very important profit and loss account or income statement is for the whole period. Whole period means a whole year or maybe a quarter or maybe half year or maybe monthly but currently even weekly and then the other assumption which is also very crucial going concern. Going concern means that the entity is going to continue in business and they have no intention whatsoever to close it down because if you if you know if people know that you're going to close it down no one going to do business with you. So we need to assume here the entity is assumed to be going concern that is an account continuing in operation for the foreseeable future. This foreseeable future means at least three years not only one year. It is assumed that the entity has neither the intention nor the need to liquidate or curtail materially the scale of its operation. You know sometimes we are producing two products and if it if you decide to stop one and that's giving the other and the only one then people might think that they are not going to give the second one even after some time. So they don't like it. We have to assume that we are going to continue and our accounts are based on going concern basis. Now compliance with IFRS give a true and fair view. They are definitive statements of what constitute best practices. In fact this framework things started long long time ago but in 1920-2018 they come up with a solid framework that okay this is now you keep following and they keep on changing also. Let me tell you it's not that 1890 they started then then 2010 and now then 2018. So things have been changing. Adoption of a local accounting standards. In fact in Pakistan also we tried to have our own standards but unfortunately we cannot continue. Similarly in England there was their own standard they used to call it standard statement of accounting practices. Again now they are they have to stop also. Similarly in America we used to have financial financial accounting standards so they also stop and all over the world now it is international financial reporting standards. Now previously they are international accounting standards but now they are removing from international accounting standards to international financial reporting standards. So things have been changing and let me tell you that it's not the end of it. They are going to change in future also. We have to be ready to opt the change in those standards. Persuasion influence is the formatting local accounting standards. Then IFRS do not have the explicit legal force any non-compliance would be highlighted in the financial statement of large companies. Here I want to explain one thing you know our laws our companies laws also required that we should follow these standards. In fact they have mentioned clearly this this this this standard should be followed and if we are not following those standards the auditors can give an qualified report. So that's why now we need to follow these standards strictly. IFRS are authoritative statements of how particular type of transaction and event should be reflected in the financial statement. Thank you very much.