The IASB Conceptual Framework adopts which approach to determining profits?
A) revenue/expense approach
B) matching principle approach
C) asset/liability approach
D) cash basis approach

Question

Quizplus · Accepted Answer

The IASB Conceptual Framework adopts the asset/liability approach to determining profits, which means profits are recognized when there is an increase in assets or a decrease in liabilities that can be attributed to the activities of an entity. This approach focuses on changes in the entity's economic resources rather than revenue and expenses.

The IASB Conceptual Framework Adopts Which Approach to Determining Profits