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Conceptual Framework - Purpose and status (IASB)

Date recorded:

The staff presented to the Board an early draft of the section on the purpose and status of the conceptual framework that would be included within the Conceptual Framework discussion paper (DP).

This proposed that:

  1. The primary purpose of the Conceptual Framework was to assist the IASB in the development of future IFRSs and in its review of existing IFRSs
  2. The Conceptual Framework may also assist preparers of financial statements in developing accounting policies for transactions or events not covered by existing standards
  3. In rare cases, the IASB might need to issue a new or revised IFRS that conflicts with some aspects of the Conceptual Framework. If so, the IASB would need to describe and explain that departure from the Framework in the basis for conclusions on the IFRS?

The Staff noted that the they were not proposing that the Conceptual Framework overrides existing IFRSs and where there was a conflict between the Framework and existing IFRS then the existing IFRS will take precedence in all cases.

A few Board members took the view that the section on purpose and status of the conceptual framework in the draft DP should not make reference to additional purposes for the Conceptual Framework as listed in 4(a) – (d) within the Staff paper.  These noted that this list is not exhaustive and hence there are various other purposes which could also be listed.

One Board member agreed that where there was a departure from the principles of the Conceptual Framework the IASB should have to describe such a departure in the Basis for Conclusions on the IFRS.  However this member also noted that the IASB should also explain why the Conceptual Framework was still valid even though it was being departed from.  Another Board member expressed concern that the DP was highlighting that the IASB may depart from the whole Conceptual Framework.  The Staff noted that they could redraft to highlight that the departure would only be from one specific aspect of the Framework.

There were no other significant Board comments received.

The majority of Board members tentatively agreed to support the Staff proposals.  However, the Staff noted that there did not appear to be broad support for paragraph 4 (some Board members would like to see this deleted and some would like to have it mentioned) in the paper and hence they would do further work on this before the next Board meeting to discuss this aspect of the DP.

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