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Conceptual framework

Date recorded:

Conceptual Framework — Agenda paper 10

The IASB continued its discussion of the comments received on the Conceptual Framework exposure draft (the ‘CF ED’). The topics for this meeting were as follows:

  • Whether the appendix on ‘cash-flow-based measurement techniques’ should be retained (AP 10B);
  • Review of existing Standards for potential inconsistencies with the revised CF (AP 10C);
  • Effects of the revised CF (AP 10D);
  • Minor comments on concepts supporting asset and liability definitions (AP 10E);
  • Due process (AP 10F).

In addition, the tentative decisions made to date were summarised in AP 10A.

The redeliberation of the CF ED is entering the final stages. None of the papers for this meeting included any technical discussions - they related mostly to housekeeping matters.

The Staff intends to discuss the following topics in the March 2017 Board meeting: (a) transition to the forthcoming amendment to paragraph 11 of IAS 8 for rate-regulated activities; (b) due process steps for updating references to the Framework for the Preparation and Presentation of Financial Statements and related quotes in Standards.

Measurement — Appendix A: Cash-flow-based measurement techniques — Agenda paper 10B

Feedback from respondents and Staff analysis

Appendix A to the CF ED clarified a number of points that needed to be considered when developing a cash-flow-based measurement technique. Four respondents believed that the appendix should not form part of the CF since it addressed practical rather than conceptual issues. Another respondent believed that the discussion in the appendix was incomplete.

The Staff believed that the appendix provided useful explanations on various issues and that expanding it would make the discussion unnecessarily complicated.

Staff recommendation

The Staff recommended retaining the appendix subject to drafting changes.

Discussion

The Board voted against retaining the appendix, but rather to incorporate the important parts within the body of the CF and to publish the rest as educational material if necessary.

Review of existing Standards for potential inconsistencies with the revised Conceptual Framework — Agenda paper 10C

Background

This paper was for information purpose only.

The CF ED already included a discussion of the inconsistencies between the Standards and the revised CF. Feedback received on the ED prompted the Staff to analyse potential additional inconsistencies identified by the respondents. Appendix A to the paper set out the Staff’s response to those purported inconsistencies.

The Staff concluded from their analysis, including a review of the newly issued Standards and amendments since the publication of the ED, that no substantive inconsistencies were noted in addition to those discussed in the ED.

Discussion

There was no significant discussion on this paper other than a request for better articulation of the Staff’s response to the respondents.

Effects of the revised Conceptual Framework — Agenda paper 10D

Background

This paper summarised the work performed by the Staff in assessing the effects of the revised CF during redeliberations of the ED, which covered the following areas:

  1. The effects of the proposed definitions of assets and liabilities;
  2. The effects of the revised CF for preparers; and
  3. Potential additional inconsistencies between the Standards and the revised CF identified by the respondents.

All these topics had been discussed by the Board previously where tentative decisions had been made (point 3 was discussed in the current meeting – see AP 10C). No additional discussion was presented in this paper.

The Staff asked the Board whether it was satisfied with the additional work performed.

Discussion

The Board confirmed that it was satisfied with the additional work performed with no discussion.

Minor comments on concepts supporting asset and liability definitions — Agenda paper 10E

Background

This paper proposed various minor drafting changes on concepts supporting the asset and liability definitions in response to comments received on the ED.

The Staff asked the Board to raise any specific matters for discussion.

Discussion

There was no significant discussion on this paper.

Due process summary for the Conceptual Framework for Financial Reporting Agenda paper 10F

Background

This paper summarised the project history and the due process steps undertaken by the Staff in developing the revised CF.

Staff recommendation

The Staff asked the Board for permission to ballot, and recommended that the Board and the IC start using the CF as soon as it is issued (i.e. it is effective upon publication).

Discussion

The Board unanimously approved the Staff’s recommendation with no discussion.

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