Conceptual framework among IASB priorities

The International Accounting Standards Board (IASB) plans to complete a new conceptual framework by September 2015.

In addition, the board plans to have its technical program focus on implementation and maintenance, including post-implementation reviews and a small number of IFRS projects.

The IASB announced that it has mapped its future plans after reviewing more than 240 comment letters in response to a consultation document it published in July 2011. The plans are included in a 40-page feedback statement released by the IASB.

Respondents to the consultation document advised the IASB to:

• Have a period of relative calm after 10 years of almost continuous change in financial reporting.
• Prioritize work on the conceptual framework. This was one of the recommendations of the comment letter submitted by the AICPA’s Financial Reporting Executive Committee.
• Make targeted improvements that respond to the needs of new adopters of IFRS.
• Pay greater attention to the implementation and maintenance of standards.
• Improve the way it develops new standards, with more rigorous cost/benefit analysis as well as problem definition earlier in the standard-setting process.

A joint conceptual framework project undertaken by the IASB and FASB was suspended in 2010 to allow the boards to focus on high-priority, standards-level projects. The remainder of the IASB’s conceptual framework project will not be run jointly with FASB.

An important step in the building of a new conceptual framework will come when the IASB publishes a discussion paper on the topic in June 2013.

With regard to implementation and maintenance, the IASB already has developed a revised process to allow its Interpretations Committee to deal with a wider range of requests. And the first post-implementation review was launched in early 2012 on IFRS 8, Operating Segments. The next standard planned for such a review is IFRS 3, Business Combinations.

The IASB also has started building a forum for national and regional standard setters to create better dialogue between the board and the standard-setting community. It will be known as the Accounting Standards Advisory Forum.

Nine research projects have been identified as priorities based on the feedback the IASB received. These are:

• Emissions trading schemes.
• Business combinations under common control.
• Discount rates.
• Equity method of accounting.
• Intangible assets; extractive activities; and research and development activities.
• Financial instruments with the characteristics of equity.
• Foreign currency translation.
• Nonfinancial liabilities (amendments to IAS 37, Provisions, Contingent Liabilities and Contingent Assets).
• Financial reporting in high-inflationary economies.

In addition, the IASB is encouraging other standard setters to undertake research work on income taxes, a second phase of post-employment benefits standards development, and share-based payments.

The first three standards-level topics the IASB will consider as a result of its request for views are:

• Agriculture, particularly bearer biological assets such as grapevines or dairy cows.
• Rate-regulated activities.
• Separate financial statements: use of the equity method.

“Our new work program will address many challenging topics,” IASB Chairman Hans Hoogervorst said in the foreword to the feedback statement. “But I look forward to facing those challenges with the support of the wider IFRS community.”

—Ken Tysiac (ktysiac@aicpa.org) is a JofA senior editor.