Conceptual framework

Date recorded:

When and how preparers of financial statements refer to the Conceptual Framework (Agenda Paper 10)


In March 2018, the IASB published a revised version of its Conceptual Framework.

At its May 2018 meeting, the IFRS Interpretations Committee (Committee) considered an agenda request that raised questions about when and how preparers of financial statements should refer to the Conceptual Framework for assistance in developing accounting policies. The Committee decided to consult the Board on these questions.

The staff have performed an analysis and have concluded that if an IFRS Standard specifically applies to a transaction, other event or condition, an entity applies the requirements of that Standard, even if those requirements conflict with concepts in the Conceptual Framework. For most transactions, other events or conditions there is an IFRS Standard that specifically applies.

If no IFRS Standard specifically applies to a transaction, event or other condition, preparers of financial statements refer first to requirements in IFRS Standards dealing with similar and related issues, if there are any such Standards.

For some transactions, events or conditions, there could be several issues to consider in developing an accounting policy. For some of those issues there might be an IFRS Standard dealing with similar or related issues, whereas for others there might be no such Standard. In such situations, preparers of financial statements might refer to requirements in an IFRS Standard for some issues and to concepts in the Conceptual Framework for other issues.

IAS 1 Presentation of Financial Statements was amended to require that entities apply the new element definitions, by referring to the new Conceptual Framework. The IASB staff assessment is that when an IFRS Standard defines an element, a preparer would use that definition rather than the definition in the revised Framework. 

Staff recommendation

The staff did not recommend any decisions in this sessions. Instead they asked the Board whether they have any comments on the staff’s analysis.


Most Board members found the paper useful as it pulls together all the relevant requirements for the application of the Conceptual Framework and helps preparers to make efficient accounting decisions. Therefore, it would be good to give the paper more prominence. With the revised Conceptual Framework more and more situations will arise in which preparers will revert to the Conceptual Framework. One Board member found that differences between Standards and the Conceptual Framework should be better explained and it should be emphasised that the Standards always prevail.


No decisions were made.

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