IASB proposes changes to conceptual framework

Project would alter the foundational underpinning for IFRS financial reporting.

The International Accounting Standards Board (IASB) proposed changes to its conceptual framework, which provides a foundational underpinning for financial reporting under IFRS.

In an exposure draft, Conceptual Framework for Financial Reporting, the IASB proposes changes that would include:

  • A new chapter on measurement, describing appropriate measurement bases (historical cost and current value, including fair value) and the factors to consider when selecting a measurement basis.
  • Confirming that the statement of profit or loss is the primary source of information about a company's performance, and adding guidance on when income and expenses could be reported outside the statement of profit or loss in other comprehensive income.
  • Refining the definitions of the basic building blocks of financial statements, including assets, liabilities, equity, income, and expenses.
  • Placing more emphasis on the importance of providing information needed for investors to assess management's stewardship.
  • Reintroducing an explicit reference to "prudence" and explaining clearly what it means.

The IASB plans to issue a final conceptual framework next year. Comments are sought by Oct. 26 and can be made at the IFRS website.

SPONSORED REPORT

2018 financial reporting survey: Challenges and trends

Learn the top reporting challenges that emerged in a survey of more than 800 finance, accounting, and compliance professionals across the world, and compare them with your organization's obstacles.

PODCAST

How the skill set for today’s CFO is changing

Scott Simmons, a search expert for large-company CFOs, gives advice for the next generation of finance leaders and more, including which universities are regularly producing future CEOs and CFOs.