GLOBAL STANDARD SETTER the IASB has published a revised draft of the conceptual framework that underpins the way it develops and rewrites accounting standards.
The project, which followed a 2011 consultation on the IASB’s future agenda, has been a priority for the board with its chairman Hans Hoogervorst demanding that it be treated as the board’s “main deliverable” focus because the it had struggled “with so many basic questions in terms of measurements”.
Through a discussion paper, Review of the Conceptual Framework for Financial Reporting, the IASB is consulting on areas considered for change including definitions of assets and liabilities, recognition and derecognition, the distinction between equity and liabilities measurement, presentation and disclosure and other comprehensive income.
Commenting on the publication of the discussion paper, Hoogervorst said:”The conceptual framework underpins the work of the IASB and affects all IFRSs that we develop. This discussion paper gives people the opportunity to help us to shape the future of financial reporting by discussing the concepts that drive our work.”
UK reporting watchdog the FRC believes that any review should consider whether adequate emphasis is given to key principles of financial reporting including accountability, reliability and the exercise of caution.
Commenting on the publication, Roger Marshall, FRC board member and chairman of the FRC’s accounting council said: “The importance of getting the fundamentals of financial reporting right cannot be underestimated. It is vital that IASB develops a framework so that future accounting standards ensure that management can provide their investors with the information they need, in a way that is readily understandable. This is a moment when everyone can have their say in how the future is shaped.”
The paper is available for comment until 14 January 2014.
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John Hitchins was a partner with PwC for 26 years until he retired in 2014