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ESMA issues comment letter on IASB's Conceptual Framework Discussion Paper

  • ESMA (European Securities and Markets Authority) (dark gray) Image

03 Jan 2014

In December the European Securities and Markets Authority (ESMA) published its response to the International Accounting Standards Board's (IASB) Discussion Paper 'A Review of the Conceptual Framework for financial Reporting'. Overall, ESMA believes it is important that the IASB has started a debate on these concepts, however they believe that several concepts need further analysis and clarification and as a result have found it difficult to express final views on several of the questions raised in the discussion paper.

In its response to the IASB's Discussion Paper, ESMA agrees with many of the underlying proposals, including:

  • the purpose of the revised Conceptual Framework (CF) as a single and robust basis for the IASB to develop IFRSs;
  • the amended definitions of assets and liabilities;
  • the rejection of a single measurement approach; and
  • the development of a Disclosure Framework within the CF.

It also does not oppose the reintroduction of prudence into the CF, as long as this does not harm transparency and comparability or lead to the creation of hidden reserves.

However, it has concerns regarding a number of the key details set out in the paper.

Click here for the full comment letter (link to the ESMA website).

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