FASB seeks input on new chapter of conceptual framework

FASB on Thursday issued a proposed new chapter of its Conceptual Framework related to the measurement of items recognized in financial statements.

If finalized by FASB, the proposed chapter, Chapter 6 of FASB Concepts Statement No. 8, Conceptual Framework for Financial Reporting, would represent the completion of FASB’s Conceptual Framework.

The proposed chapter provides concepts for FASB to consider when choosing a measurement system for an asset or a liability recognized in general-purpose financial statements. It describes:

• Two relevant and representationally faithful measurement systems: the entry price system and the exit price system; and
• Considerations when selecting a measurement system.

The new chapter, according to FASB, would be similar to the rest of the framework in that it establishes concepts that FASB would consider in developing standards of financial accounting and reporting.

“It would provide the board with a framework for developing standards that meet the objective of financial reporting and enhance the understandability of information for existing and potential investors, lenders, donors, and other resource providers of a reporting entity,” according to the FASB news release.

The comment deadline on the proposed chapter is March 20, 2024.

— To comment on this article or to suggest an idea for another article, contact Kevin Brewer at Kevin.Brewer@aicpa-cima.com.