Conceptual Framework (IASB only)
The Staff presented their project plan for developing the new chapters of the Conceptual Framework to the Board members. The main features of the plan were noted in the November 2012 education sessions. The IASB, in September 2012, decided to aim to finalise the new sections of the Conceptual Framework by September 2015. The discussion paper is due in July 2013.
The Staff noted that the discussion paper would encompass:
- Elements of financial statements (including recognition and derecognition);
- Reporting entity; and
- Presentation and disclosure
The Staff noted that an initial draft discussion paper would be presented to the Boards in the February 2013 Board meeting. It was noted that some of the sections of the initial draft would lack detail and others are likely to present alternative approaches rather than a preliminary view. A revised version of the discussion paper will be presented to the Board in April 2013.
The Staff noted that small group meetings will be held with IASB members to brief them on sections of the Discussion paper. It was also noted that external consultation would be sought both internal and external. The Staff propose to use national standard setters and proposed to use the Accounting Standards Advisory Forum (ASAF) as the main consultative group. A public disclosure forum is also due to be held in January 2013 to provide input into the disclosure principles section of the conceptual framework.
The Staff acknowledged that the timetable was challenging and would be likely to be met if the project was restricted to the areas agreed in the September 2012 Board meeting. It was also noted that the framework would be updated rather than starting from a clean sheet of paper. The Objective and Qualitative Characteristics chapters would not be amended although would be looked at if the areas that were being worked on identified a significant impact/change that required amendment.
The comment period will be 120 days for the discussion paper. The other salient features of the Staff proposed plan are as follows:
Development and publication of the Exposure Draft
- September – October 2013 – Public round-table meetings
- November 2013 – End of Discussion paper comment period (120 days)
- January 2014 – Comment letter analysis the Board
- February – May 2014 – Decision making sessions
- June – July 2014 – Sweep issues
- August 2014 – Publish Exposure Draft
The Staff noted that they planned to hold public roundtable meetings during the comment periods and noted that if the Exposure Draft receives good support then the Exposure Draft development should be relatively straightforward.
Development and publication of the new Conceptual Framework
- October – November 2014 – Public round table meetings
- December 2014 – End of Exposure Draft comment period (120 days)
- February 2015 – Comment letter analysis to the Board
- March – June 2015 – Decision making sessions
- July – August 2015 – Sweep issues
- September 2015 – Publish new Conceptual Framework
The Staff asked the Board whether they supported the proposed approach to the Conceptual Framework.
One Board member noted that there will be a number of areas of the project that will take time and it is vital that dedicated meetings are in place with Board members to ensure that sufficient time is devoted to the project. He agreed that the parts of the Conceptual Framework that were considered complete should not be revisited but if issues did arise these should be addressed within those chapters. This Board member advocated a more detailed project plan and he proposed that the Staff perform extensive research to enable them to form the discussion paper. These views were shared by another Board member especially regarding the time spent by Board members on the project.
Another Board member agreed with the Staff proposal and noted that for most parts of the framework a lot of work has been performed and hence the Staff should make use of this.
Another Board member understood the concerns of the first Board member regarding time devotion and also a detailed project plan. He also questioned what the Board would be presented with for those parts where the Staff noted that there would be a lack of detail. He noted that the more complete the Discussion paper was in February the better and if there were a lot if open questions in February this may impact upon the overall project timetable. He also questioned the use of the ASAF as the consultative group bearing in mind that these have yet to be formed.
The Staff noted that a balance needs to be struck to ensure that the project was completed to schedule and if more extensive research was carried out then it would take at least another year to complete.
One member highlighted that discussions with the Capital Markets Advisory Group should be carried out sooner rather than later in order to test the ideas being put forward.
Another Board member asked what format the draft Discussion paper would be – would it present a range of views or one view and discuss why the other Board member views were not adopted. The member was concerned that the Staff should present the full range of views. The Staff noted that it is likely that the Discussion paper would follow the latter format but this would depend on the issue being addressed and the amount of differing views on it.
Notwithstanding the above Board comments, a vote was held and all 14 Board members tentatively agreed to the Staff’s project plan for the Conceptual Framework project.