EFRAG publishes consultation document on the IASB Exposure Draft of a new Conceptual Framework

  • EFRAG (European Financial Reporting Advisory Group) (dk green) Image

08 Jul 2015

The European Financial Reporting Advisory Group (EFRAG) has published a document for public consultation on the proposed new Conceptual Framework for Financial Reporting.

The International Accounting Standards Board (IASB) published the comprehensive Exposure Draft ED/2015/3 Conceptual Framework for Financial Reporting containing proposals for topical areas where it considers a revision and amendment of the existing Conceptual Framework necessary on 28 May 2015. Included in the ED are proposals to revise the definitions of an asset and a liability, to introduce guidance on measurement and derecognition, and to set a framework for presentation and disclosure.

The consultation document published by EFRAG today seeks constituents' views on issues related to the ED. It contains preliminary positions of the EFRAG Board to facilitate discussion.

Generally, the view presented is that the Conceptual Framework as drafted in the ED would fail to meet European expectations. Cited are a lack of guidance, in particular on controversial issues that have discussed in the past (how to select a measurement basis and how to report performance, including what should be reported in profit or loss and when). EFRAG welcomes the greater emphasis given to stewardship and the reintroduction of prudence, however, it feels that more needs to be done in these two areas. EFRAG also disagrees with changing the qualitative characteristics of relevance and reliability instead of seeking a common understanding with constituents of what constitutes a reliable measurement.

The consultation document also indicates that EFRAG intends to request that the IASB extends its deadline for comments by 2 months (up to 26 December 2015) given the critical role the conceptual framework is intended to play in the effectiveness of the IASB standard-setting process in the future.

EFRAG requests comments on its consultation document by 26 October 2015 (possibly extended to 20 November if the IASB grants an extended comment period).

Please click to access the following documents on the EFRAG website:

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