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Conceptual framework

Date recorded:

At the meeting in May 2012, the Board unanimously supported, among other things, giving priority to work on the conceptual framework project. The staff presented their proposals to the Board as to how to approach the project on the conceptual framework. The staff recommended that the conceptual framework project should focus on elements of financial statements, measurement, reporting entity, presentation and disclosure. They also noted that the aim would be to work towards a single discussion paper covering all of the areas (rather than the previous joint IASB and FASB phase project on the conceptual framework), rather than separate discussion papers for each area. One reason for this single approach was because many issues are inter-connected, many respondents indicated that they could not comment effectively on only one phase without seeing the larger implications. The staff noted that a single Exposure Draft would be produced and the approach would be “top down” rather than “bottom up”.

The project will be an IASB only project but the proposed consultative group would include national standard setters (including the FASB) or regional organisations of standard setters. The staff noted that they would get these members to “test” and review the conceptual framework document as it progressed.

The staff noted that in planning and conducting the work on the conceptual framework project they would consider the interactions with other projects that were on the IASB agenda such as the potential amendments to IAS 41 Agriculture as these projects will help to provide input to the conceptual framework and some may rely on the conceptual framework – for example definitions of assets and liabilities. The staff asked the Board members whether they agreed that the conceptual framework project should focus on the elements of financial statements, measurement, reporting entity, presentation and disclosure and whether they agreed with a single discussion paper.

Some of the Board members commented that the structure of the conceptual framework document may need separate sections/chapters for presentation and a separate section for disclosure as in the future it was suggested that there may be a separate standard on disclosure like there is currently for presentation. Another Board member asked where “recognition” was included within the proposed areas. The staff clarified that this would be within “elements”. One member emphasised that it was very important that the investor community are included within the consultative group – people who have been in financial reporting and accounting for some time. Another suggested including the ASB within this group was a good idea. One Board member, questioned whether there were adequate staff resources to complete the project on time and asked what the timetable for getting a discussion paper out was. The staff emphasised that they aim to have a discussion paper in the first half of 2013.

A number of Board members shared the view that the conceptual framework project was the main deliverable for the IASB in the next few years and that, as they were in control of the timeline, it was vital that the project timetable did not slip – clear planning was required. A clear project timetable with set deliverable dates was discussed with a proposed end date of September 2015. One Board member noted that there needed to be sufficient Board time scheduled in Q1 2013 for this project. It was suggested that an early skeleton of the document was important to allow sufficient time to address identified issues as the project progresses. All Board members tentatively supported the staff recommendation (single paper and content) and to committing to completing the conceptual framework project by 2015.

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