Deloitte Touche Tohmatsu Limited has responded to the International Accounting Standards Board’s (the IASB) Discussion Paper DP/2013/1 A Review of the Conceptual Framework for Financial Reporting.

We support the Board’s review of the Framework. We believe the Framework should provide consistency in accounting and financial reporting, interpretation and guidance for similar events, transactions and economic phenomena across industry sectors and jurisdiction boundaries.

We agree with many of the preliminary views in the discussion paper, however, there are some areas which we believe have not been fully addressed. In particular, concepts that relate to the distinction between liabilities and equity instruments, capital maintenance and the unit of account. We suggest the Board to conduct additional research and use the Accounting Standards Advisory Forum to reach a broad consensus among the various standard-setting bodies.

We provided comments on all aspects of the discussion paper and highlight the following:

• The Framework should be treated as a living document and should be updated as necessary to keep pace with changes in thinking on conceptual matters. There should be an established process for reviewing the Framework on a recurring basis.
• The IASB should have a plan for identifying and addressing any conflicts between a revised Framework and existing IFRSs.
• Amendments should not be made to the Framework unless fully deliberated and tested.
• Sufficient detail should be included in the Framework so concepts are applied as intended.

Download the full comment letter below.

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