This site uses cookies to provide you with a more responsive and personalised service. By using this site you agree to our use of cookies. Please read our cookie notice for more information on the cookies we use and how to delete or block them.
The full functionality of our site is not supported on your browser version, or you may have 'compatibility mode' selected. Please turn off compatibility mode, upgrade your browser to at least Internet Explorer 9, or try using another browser such as Google Chrome or Mozilla Firefox.

IASB proposes updates to its conceptual framework

  • IASB document Image

May 28, 2015

The IASB has published two exposure drafts (EDs) related to its conceptual framework. ED/2015/3, “Conceptual Framework for Financial Reporting,” would (1) revise the definitions of the terms “asset” and “liability,” (2) provide guidance on measurement and derecognition, and (3) establish a framework for presentation and disclosure. ED/2015/4, “Updating References to the Conceptual Framework,” would amend references to the conceptual framework in other IASB pronouncements.

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.

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.