With the Convergence Project Between IASB and FASB Explain Why

question 69

Essay

With the convergence project between IASB and FASB explain why there is a need for a revised conceptual framework.

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Definitions:

Clientele Effect

A phenomenon where the types of investors attracted to a company's stock are affected by the company's dividend policy or other financial strategies.

Investors

Individuals or institutions that allocate capital with the expectation of receiving financial returns, encompassing various types such as retail and institutional investors.

Retained Earnings

The portion of a company's profit kept in the business after dividends are paid, used for reinvestment or paying down debt.

New Equity

The issuance of additional shares of stock by a company to investors, typically to raise capital for business expansion or operational needs.