The International Accounting Standards Board (IASB) has begun a consultation process with the objective of issuing a revised conceptual framework for financial reporting.
The conceptual framework establishes the concepts that underlie the preparation and presentation of financial statements. The IASB follows the principles in the conceptual framework when developing and revising International Financial Reporting Standards (IFRS).
An IASB discussion paper exploring possible changes to the conceptual framework is designed to gain feedback from stakeholders on issues the board will consider in creating an exposure draft of a revised conceptual framework. The issues include:
- Definitions of assets and liabilities.
- Recognition and derecognition.
- The distinction between equity and liabilities.
- Presentation and disclosure.
- Other comprehensive income.
“The conceptual framework underpins the work of the IASB and affects all IFRS that we develop,” IASB Chairman Hans Hoogervorst said in a news release.
In addition to seeking input in the form of comment letters, the IASB will undertake an outreach program designed to obtain feedback on the areas covered in the discussion paper. Comments are due Jan. 14, and can be submitted at the IFRS Foundation website.
In a public consultation conducted in 2011 to identify priorities for the IASB, most respondents identified working on the conceptual framework as a high priority, according to the board. Completing the conceptual framework was the top priority identified by the AICPA Financial Reporting Executive Committee (FinREC) in its comment letter on the agenda consultation.
FinREC encouraged the IASB to establish guiding principles that will ensure that the standards satisfy objectives and are consistent and understandable.
—Ken Tysiac (firstname.lastname@example.org) is a JofA senior editor.