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I Gusti Ayu Tri Bhuwana Dewi (1607531067) I Made Fery Aditya (1607531137)
The basic concept is a conceptual basis for developing accounting standards that will be
applied in a particular (country) environment. Therefore the basic concept is usually a
characteristic or abstraction of factors that are considered to influence or shape behavior in the
environment. This behavior can take the form of attitudes, responses, habits, mentality, or
perceptions of various business fields and occupations and procedures for the community in the
environment. In other words, the basic concept of accounting can be a characteristic or
abstraction of the economic, social, political, cultural and business practices in a country which
is used as a conceptual basis for developing accounting that is suitable for the environment. The
basic concept chosen must certainly reflect the environment in question so that the standards that
are prepared will become effective guidelines in achieving the objectives of financial reporting.
The basic set of concepts put forward by Paton and Littleton (1970) are the basic
concepts introduced before the sources mentioned earlier. The Paton and Littleton (P & L) book
which was first published in 1940 is one of the classic works that influenced accounting thinking
afterwards. The Six concepts and A Set of Assumptions:
The Framework's purpose is to assist the IASB in developing and revising IFRSs that are
based on consistent concepts, to help preparers to develop consistent accounting policies for
areas that are not covered by a standard or where there is choice of accounting policy, and to
assist all parties to understand and interpret IFRS. The fundamental qualitative characteristics are
relevance and faithful representation. The enhancing qualitative characteristics also may help
determine which of two ways should be used to depict a phenomenon if both are considered
equally relevant and faithfully represented.