This paper proposes a basis for progress in the development of the conceptual framework (CF) as a foundation for developing accounting standards. This topic has gained increased prominence following theIASB's (2013) release of itsReview of the Conceptual Framework for Financial Reporting(RCFFR) proposing changes to theCF. In this paper the broad socio‐economic environment is seen as determining the primary purpose ofGeneralPurposeFinancialReporting (GPFR), which, in turn, establishes the high‐level properties of aCFsuitable to meet that primary purpose. This is to support market stability and efficiency through the provision of an account of the financial position and performance of an entity that accords with economic reality.The case is made that the primary purpose of aCFis to provide the principles for the development of accounting standards that will result inGPFRthat is useful. This requires theoretical coherence. TheCFshould drive the standards and if standards depart from theCFprinciples, such departures should be justified. This proposal is consistent with the position adopted in theRCFFR. However, in contrast to theRCFFR, this paper accents the purposive approach and links the formation of standards directly to theCF. This approach implies that standards are subordinate toCFprinciples; therefore compliance with standards should not provide a basis for compromising the faithful representation of economic reality. From the purpose identified forGPFR, the paper argues for a default presumption in favour ofFairValueAccounting, a retreat from the asset/liability approach, and a re‐casting of the income statement to focus on operational flows.