28 May 2015
The International Accounting Standards Board (IASB) today published for
public consultation proposals to improve the Conceptual Framework for
Financial Reporting. The Conceptual Framework underpins
International Financial Reporting Standards (IFRS) and helps the IASB to develop
Standards that bring transparency, accountability and efficiency to financial
markets around the world.
The Exposure Draft proposes a number of enhancements to the Conceptual Framework, including:
Having listened to feedback from parties affected by the IASB’s work, the
Board is also proposing to place more emphasis on the importance of providing
information needed for investors to assess management’s stewardship, and to
reintroduce an explicit reference to ‘prudence’, explaining clearly what it
Hans Hoogervorst, Chair of the International Accounting Standards Board, said:
“A solid Conceptual Framework is essential because it shapes the decisions the IASB takes when developing Standards. Two particularly important areas of the proposals published today are the clarification of the key role of profit or loss as an indicator of a company’s financial performance, and the chapter that describes the information provided by historical cost and current value measurements.”
The Conceptual Framework was last revised in 2010. In 2011, respondents to the IASB’s Agenda consultation called for the IASB to restart and prioritise revision of the parts that were not revised in 2010. The IASB has listened to that feedback and plans to issue a final Conceptual Framework in 2016.
The IASB has also published for public comment a separate Exposure Draft Updating References to the Conceptual Framework, which proposes that references to the Conceptual Framework are updated in existing Standards.
The deadline for commenting on the Exposure Drafts is 26 October 2015.
A ‘Snapshot’ providing a high-level summary of the key aspects of the Exposure Draft can be found here. On 17 June 2015 at 11am (London time) the IASB will hold a live webinar to introduce the proposals and answer questions.