Under ED/2015/3, the structure of the conceptual framework would consist of an introduction, eight chapters, and two appendixes. According to the IASB’s press release, key enhancements to the conceptual framework would include:
- “A new chapter on measurement that describes appropriate measurement bases (historical cost and current value, including fair value), and the factors to consider when selecting a measurement basis;
- Confirming that the statement of profit or loss is the primary source of information about a company’s performance, and adding guidance on when income and expenses could be reported outside the statement of profit or loss, in ‘Other Comprehensive Income (OCI)’; and
- Refining the definitions of the basic building blocks of financial statements—assets, liabilities, equity, income and expenses.”
For more information about ED/2015/3, see the ED’s Basis for Conclusions, the IASB’s May 2015 Snapshot newsletter, and the related webcast on the IASB’s Web site.
ED/2015/4 would change references to and quotes from the conceptual framework in nine pronouncements. To give preparers time to identify, understand, and adjust to possible implications of the changes, the IASB is proposing a transition period of approximately 18 months.
Comments on both EDs are due by October 26, 2015. The IASB aims to finalize the revised conceptual framework in 2016.