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Conceptual framework — Purpose and status

Date recorded:

The main discussion evolved around the purpose of the Conceptual Framework. As stated in the agenda paper currently the primary purpose of the Conceptual Framework is ‘to set out concepts that underlie the preparation and presentation of financial statements as a practical tool to assist the IASB in developing future IFRSs and reviewing existing IFRSs’.

The concern raised by several Board members was that there was too much emphasis on the IASB and not enough emphasis on other users. In other words the Conceptual framework should also serve preparers and users of financial statements.

The Board decided to give in the DP more prominence on how other stakeholders use / benefit from the Conceptual Framework.

A Board member also raised a question whether the DP should explain not only the purpose of the Conceptual Framework but the DP should also explain what the Conceptual framework actually did, which could be summarised as that it was not just for the development of individual standards but also for ensuring consistency between standards as a whole.

There seemed to be a lot of support for this clarification.

Another discussion, which was not conclusive, was around the potential conflict between the Conceptual Framework and an IFRS. As stated in the current agenda paper, ‘Where there is a conflict, the requirements of the IFRS prevail over the Conceptual Framework’. One Board member felt that this sounded like a ‘promise’ / commitment and therefore he questioned whether this statement should be in the DP.

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