Conceptual Framework – Comprehensive project

Background

At their joint meeting in October 2004, the IASB and the US FASB decided to add to their respective agendas a joint project to develop a common conceptual framework, based on and built on both the existing IASB Framework and the FASB Conceptual Framework, that both Boards would use as a basis for their accounting standards.

The two boards reached the following tentative decisions about the approach to the project:

  • The project should initially focus on concepts applicable to business entities in the private sector. Later, the boards should consider the applicability of those concepts to other sectors, beginning with not-for-profit organisations in the private sector.
  • The project should be divided into phases, with the initial focus being on achieving the convergence of the frameworks and improving particular aspects of the frameworks dealing with objectives, qualitative characteristics, elements, recognition, and measurement. Furthermore, as the frameworks converge and are improved, priority should be given to addressing issues that are likely to yield benefits to the boards in the short term, that is, cross-cutting issues that affect a number of their projects for new or revised standards.
  • The converged framework should be in the form of a single document. It should include a summary and a basis for conclusions.

    •  

Current status of the project

The Conceptual Framework project is currently paused.  The IASB expects to recommence development of the Conceptual Framework during 2012.

The Conceptual Framework project is being conducted in eight phases:

PhaseStatus
Phase A: Objectives and qualitative characteristics Completed, Conceptual Framework
for Financial Reporting 2010 issued on 28 September 2010
Phase B: Elements and recognition Deliberations have begun, currently paused
Phase C: Measurement Deliberations have begun, currently paused
Phase D: Reporting entity Exposure Draft ED/2010/2 Conceptual Framework for Financial Reporting: The Reporting Entity published on 11 March 2010.  Currently paused
Phase E: Presentation and disclosure Deliberations have not commenced
Phase F: Purpose and status Deliberations have not commenced
Phase G: Application to not-for-profit entities Deliberations have not commenced
Phase H: Remaining issues Deliberations have not commenced

 

Project milestones

DateDevelopmentComments
October 2004 Comprehensive project added to the active agenda
6 July 2006 Discussion Paper Preliminary Views on an improved Conceptual Framework for Financial Reporting: The Objective of Financial Reporting and Qualitative Characteristics of Decision-useful Financial Reporting Information published (Phase A) Comment deadline 3 November 2006
29 May 2008 Exposure Draft An improved Conceptual Framework for Financial Reporting: Chapters 1 and 2 published (Phase A) Comment deadline 29 September 2008
29 May 2008 Discussion Paper Preliminary Views on an improved Conceptual Framework for Financial Reporting: The Reporting Entity (Phase D) Comment deadline 29 September 2008
11 March 2010 Exposure Draft ED/2010/2 Conceptual Framework for Financial Reporting: The Reporting Entity published (Phase D)
 Comment deadline 16 July 2010

28 September 2010

 Conceptual Framework for Financial Reporting 2010 published Completion of Phase A, effectively immediately applicable

For more information, including details of exposure drafts and other due process documents for each phase, refer to the individual project pages for the various project components.

Related Discussions

  • Technical plan

  • Nov 17, 2010

  • The IASB and FASB briefly discussed the timing of each of the Memorandum of Understanding (MOU) joint projects in preparation for the intended issue of an updated technical plan. Three projects were discussed in detail: financial instruments, discontinued operations and the Conceptual Framework.

  • Credit Risk in Liability Measurement

  • Oct 21, 2009

  • At that meeting the Board decided to stop work on credit risk in liability measurement as separate project and not to reach a general conclusion on credit risk at this time. Instead, the issues will be incorporated into the Conceptual Framework Measurement project.

  • Conceptual Framework Phase C — Measurement

  • Jun 17, 2009

  • The Board discussed a draft chapter on measurement that might form the basis of a joint IASB-FASB discussion paper. The sample chapter very basic; it did not include a basis for conclusions or other supporting material that would be included in an actual measurement chapter.

  • Conceptual Framework

  • Mar 24, 2009

  • The Board discussed comments received on the release and effective dates of the Framework chapters.

  • Conceptual Framework Phase C — Measurement

  • Mar 20, 2009

  • The Board held a lively, if inconclusive, discussion of an aspect of the measurement chapter of the proposed conceptual framework. The staff continues to develop issues for inclusion in a discussion paper.

  • Conceptual Framework Phase D — Reporting Entity

  • Mar 19, 2009

  • The staff introduced the topics by noting that the objective of the meeting is to redeliberate the issues related to control of an entity included in the May 2008 Discussion Paper. The DP presented the Board's preliminary view that control of an entity should be defined at the conceptual level. Most respondents agreed with the Board's preliminary view.

  • Conceptual Framework Phase A — Objective and Qualitative Characteristics

  • Mar 19, 2009

  • The objective of this session was to discuss concerns raised by respondents regarding the objective of financial reporting. The staff introduced the topics by noting that the ED proposed that the objective of financial reporting should encompass all decisions made by capital providers of a reporting entity in their capacity as capital providers.

  • Conceptual Framework Phase D — Reporting Entity

  • Jan 20, 2009

  • The Board discussed various issues raised by respondents to the Board's Discussion Paper Preliminary Views on an Improved Conceptual Framework for Financial Reporting: The Reporting Entity. The decisions made in this session will be accommodated in the next phase of this project, which is an exposure draft due later in 2009.

  • Conceptual Framework Phase C — Measurement

  • Jan 20, 2009

  • The Board continued its discussions of the chapter of the Framework devoted to measurement. No formal decisions were made, although the Board did give a very strong indication of its views at several points.

  • Conceptual Framework Phase A — Objective and Qualitative Characteristics

  • Dec 16, 2008

  • The IASB staff presented a preliminary analysis of the major issues raised by respondents to the Exposure Draft of Chapters 1 and 2 of the IASB Framework, which addressed the Objective of Financial Reporting and the Qualitative Characteristics and Constraints of Decision-useful Financial Reporting Information.

  • Conceptual Framework Phase D — Reporting Entity

  • Nov 18, 2008

  • The IASB staff presented its summary of comments received on the Discussion Paper The Reporting Entity. The session was essentially an educational one, and no decisions were made. The staff summary is available in Agenda Paper 4 for this meeting. The staff highlighted several of the high-level findings but did not discuss them to any extent.

  • Conceptual Framework Phase C — Measurement

  • Nov 18, 2008

  • The Board discussed a paper in which the FASB staff assigned to this joint project attempted to identify factors to consider when selecting a basis for measurement after initial recognition.

  • Conceptual Framework Phase B — Elements and Recognition

  • Jun 20, 2008

  • Before the staff could introduce the topic, a Board member challenged the meeting's working definition of a liability, which he saw as precluding performance obligations (and thus contrary to the Board's work in the revenue section of the Framework project). In his view the clause addressing 'economic obligations' displayed tortured reasoning:

  • Conceptual Framework Phase B — Elements and Recognition

  • Dec 13, 2007

  • The Board discussed the way forward regarding the definition of a liability. The staff noted that Phase B of the Conceptual Framework overlaps with the Liabilities and Equity project and raised the concern that this may result in issuing two contradictory discussion papers.

  • Conceptual Framework Phase A — Objective and Qualitative Characteristics

  • Dec 13, 2007

  • At this meeting the Board discussed three options in relation to the replacement of the term 'reliability' with 'faithful representation' and, in particular, its implications for the recognition criteria in paragraph 86 of the existing Framework, which deal with the reliability of measurements.

All Related