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Amendments to the Conceptual Framework for Financial Reporting [Completed]

Effective date: 

The Conceptual Framework does not have a stated effective date and the International Accounting Standards Board (IASB) will start using it immediately.

Next steps:

The AcSB expects to release the revised Conceptual Framework in the CPA Canada Handbook in the second half of 2018.

Last updated:

March 2018

Overview

The Conceptual Framework for Financial Reporting (Conceptual Framework) describes the objective of and concepts for general purpose financial reporting. It is a practical tool that helps the IASB to develop requirements in IFRS® Standards based on consistent concepts. Consideration of these concepts, in turn, should result in the IASB developing IFRS Standards that require entities to provide financial information that is useful to investors, lenders and other creditors.

The IASB decided to revise the Conceptual Framework because some important issues were not covered and some guidance was unclear or out of date. The revised Conceptual Framework, issued by the IASB in March 2018, includes:

  • a new chapter on measurement;
  • guidance on reporting financial performance;
  • improved definitions of an asset and a liability, and guidance supporting these definitions; and
  • clarifications in important areas, such as the roles of stewardship, prudence and measurement uncertainty in financial reporting.

The IASB also updated references to the Conceptual Framework in IFRS Standards by issuing Amendments to References to the Conceptual Framework in IFRS Standards. This was done to support transition to the revised Conceptual Framework for companies that develop accounting policies using the Conceptual Framework when no IFRS Standard applies to a particular transaction.

 

Other developments

March 2018

On March 29, 2018, the IASB published its revised Conceptual Framework for Financial Reporting. Included are revised definitions of an asset and a liability, as well as new guidance on measurement and derecognition, presentation and disclosure. The new Conceptual Framework does not constitute a substantial revision of the document as was originally intended when the project was first taken up in 2004. Instead the IASB focused on topics that were not yet covered or that showed obvious shortcomings that needed to be dealt with.

The IASB also issued Amendments to References to the Conceptual Framework in IFRS Standards. The document contains amendments to IFRS 2, IFRS 3, IFRS 6, IFRS 14, IAS 1, IAS 8, IAS 34, IAS 37, IAS 38, IFRIC 12, IFRIC 19, IFRIC 20, IFRIC 22, and SIC-32. Not all amendments, however update those pronouncements with regard to references to and quotes from the framework so that they refer to the revised Conceptual Framework. Some pronouncements are only updated to indicate which version of the framework they are referencing to (the IASC framework adopted by the IASB in 2001, the IASB framework of 2010, or the new revised framework of 2018) or to indicate that definitions in the standard have not been updated with the new definitions developed in the revised Conceptual Framework. The amendments, where they actually are updates, are effective for annual periods beginning on or after January 1, 2020.

 

December 2017 

On December 18, 2017, the IASB® staff updated the work plan to indicate that the IASB expects to issue the final amendments to the Conceptual Framework in March 2018. 

September 2017

On September 22, 2017, the IASB staff updated the work plan to indicate that the IASB expects to issue the final amendments to the Conceptual Framework in Q1/2018.

June 2017

In June 2017, the IASB staff updated the work plan to indicate that the IASB expects to publish the final amendments to the Conceptual Framework in Q4/2017.

March 2017

On March 23, 2017, the IASB staff updated the Work Plan in respect of this project to indicate that this project is now in a drafting stage and that the IASB expects to publish the final amendments to the Conceptual Framework after September 2017.

December 2016

On December 15, 2016, the IASB staff updated the Work Plan in respect of this project to indicate that the IASB expects to publish the final amendments to the Conceptual Framework after June 2017.

September 2016

On September 23, 2016, the IASB staff updated the Work Plan in respect of this project to indicate that the IASB expects to publish the final amendments to the Conceptual Framework sometime after March 31, 2017.

July 2016

On July 20, 2016, the IASB staff updated the Work Plan in respect of this project to indicate that the IASB expects to publish the final amendments to the Conceptual Framework sometime after January 31, 2017.

April 2016

On April 22, 2016, the IASB updated its Work Plan in respect of this project to note that it is expects to issue the final amendments subsequent to October 2016.

October 2015

On October 2, 2015, to align with the IASB’s extension, the deadline for comments has been changed by the AcSB to November 25, 2015 from October 26, 2015 for both exposure drafts AcSB Exposure Draft – Conceptual Framework for Financial Reporting and AcSB Exposure Draft – Updating References to the Conceptual Framework.

August 2015

On August 12, 2015, the AcSB issued the following EDs that corresponds to the IASB's EDs on these topics: (i) AcSB Exposure Draft – Conceptual Framework for Financial Reporting; and (ii) AcSB Exposure Draft – Updating References to the Conceptual Framework.

May 2015

On May 28, 2015, the IASB published for public comment a comprehensive Exposure Draft containing proposals for topical areas where it considers a revision and amendment of the existing Conceptual Framework necessary. Included in the ED are proposals to revise the definitions of an asset and a liability, to introduce guidance on measurement and derecognition, and to set a framework for presentation and disclosure. The main ED is accompanied by an ED containing proposals regarding references to the Conceptual Framework in other IASB pronouncements.

 

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