Deloitte Touche Tohmatsu Limited has responded to the IASB's Exposure Draft ED/2015/3 Conceptual Framework for Financial Reporting.

In our comment letter, we note that we believe that further improvements are necessary before the revised Conceptual Framework is issued. Specifically, we think that:

• The proposed material on the primary financial statements, and in particular the performance statement(s), suffers from a lack of a conceptual basis.
• It is inappropriate to build rebuttable presumptions into the Framework.
• The Framework would be enhanced by adding a statement that the Framework has been developed on the assumption that arm’s-length transactions between entities are fair exchanges – and then address those situations when that assumption might not hold, such as non-reciprocal transfers, at a Standards-level.
• The proposed section on derecognition seems to have been written with collateralised borrowings (i.e. repo-type transactions) in mind, rather than addressing more general derecognition principles.
• The exposure draft proposal will not provide guidance, criteria or indicators that would help the Board decide between a current value and a cost-based amount.

Download the full comment letter below.

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