There is no specific scope of conceptual framework although it can be applied in various fields. Commonly, this is used in accounting whereby FASB defines its conceptual framework as a logical system of mutual relations and fundamentals. It is also referred to as a normative theory of accounting. It outlines the objectives of accounting, its qualitative characteristics, and what financial information should entail in general, how to define the elements of accounting, how to recognize them, and how they should be measured.
A common misconception in regards to the conceptual framework projects is that they are impossible to handle especially when trying to develop financial accounting systems.
At a wide scope, conceptual framework can be viewed as a statement of GAAP (Generally Accepted Accounting Principles). This forms a frame of reference for the appraisal of ongoing practices as well as the creation of new ones. The conceptual framework can be used to create a theoretical basis for vital economic decision making. This dictates how transactions should be measured and reported in the accounting field.
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