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FASB issues new chapter of Conceptual Framework
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FASB issued a new chapter of its Conceptual Framework related to the measurement of items recognized in financial statements.
Chapter 6 of FASB Statement of Financial Accounting Concepts No. 8, Conceptual Framework for Financial Reporting, represents the completion of FASB’s Conceptual Framework.
The new 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 chapter, according to FASB, is similar to the rest of the framework in that it establishes concepts that would be considered in developing standards of financial accounting and reporting.
The chapter, according to a news release, provides 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.
— To comment on this article or to suggest an idea for another article, contact Kevin Brewer at Kevin.Brewer@aicpa-cima.com.