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Research paper on the IASB Conceptual Framework project

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31 Mar 2014

A research paper showing discussions and views on a number of important issues that are raised in the IASB Conceptual Framework project from an academic and research perspective has recently been published in 'Abacus'.

The authors discuss (excerpts from their summary):

  • The role of the Conceptual Framework and the basic question whether a conceptual framework should serve as a basis for deductive reasoning or whether it is just an attempt to rationalize existing standards;
  • Objectives and uses of financial reporting with the revised Conceptual Framework defining decision usefulness to capital providers as the overarching objective, while stewardship is only a secondary objective and seemingly regarded as one that seems not to be able to conflict with decision usefulness;
  • Prudence and the controversial issue of removing the concept altogether in the 2010 revision of the Conceptual Framework;
  • Uncertainty in recognition of assets and liabilities and the proposal in the Discussion Paper DP/2013/1 A Review of the Conceptual Framework for Financial Reporting that the definitions of assets and liabilities should not include any particular probability thresholds;
  • Derecognition and the claim that from a conceptual perspective there is no need for special derecognition principles in a conceptual framework; and
  • Measurement issues and the distinction between recognition and measurement.

The aim of the paper is to contribute to the current debate on objectives of financial reporting and prudence. The paper was published in Abacus and can be downloaded through Wiley Online: Revisiting the Fundamental Concepts of IFRS. One of the authors (Professor Araceli Mora) has kindly also contributed an exclusive three-page summary of the paper for IAS Plus.

We thank the authors for allowing us to make the results of their research available on IAS Plus.

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