ICAEW responds to IASB consultation on the Conceptual Framework

  • ICAEW (Institute of Chartered Accountants in England and Wales) (lt green) Image

20 Nov, 2015

The Institute of Chartered Accountants in England and Wales (ICAEW) has published its responses to the IASB's exposure drafts (EDs) 'Conceptual Framework for Financial Reporting' and 'Updating References to the Conceptual Framework'. Overall ICAEW welcomes the EDs but has concerns about several areas where they find the proposals unconvincing.

In its responses to the exposure drafts, the ICAEW comments on the IASB's proposals in various areas. Their major points include the following.

  • They believe that the IASB should clarify the relationship between the terms 'faithful representation' (used in the Framework), 'fair presentation' (used in IAS 1 and IAS 8) and 'true and fair view' (a concept that occurs in the laws of many jurisdictions that have adopted IFRS).
  • They disagree with the way in which prudence is being reintroduced into the Framework.
  • They do not agree with the ED's definition of a liability.
  • They believe that the ED's description of measurement bases needs more thought, including consideration of the measurement requirements of recent standards such as IFRS 9 and IFRS 15.
  • They believe that more work is needed on the subject of distinguishing profit or loss from other comprehensive income.
  • They are concerned that the changes proposed by the exposure draft on updating references imply that entities should review all accounting policies adopted for transactions that are not specifically covered by an IFRS. They believe that this would be unduly onerous and the amendments should only be applied when an entity is developing a new accounting policy or reviewing an existing policy for other reasons.

The following can be obtained from the ICAEW website:

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