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IASB Releases Revised Conceptual Framework

09 April 2018

Revised Conceptual Framework for Financial Reporting

The International Accounting Standards Board (IASB) has issued its revised Conceptual Framework for Financial Reporting (Conceptual Framework). The Conceptual Framework sets out the objectives with respect to and the fundamental concepts of financial reporting. The IASB uses these fundamental concepts as a guide in developing International Financial Reporting Standards (IFRS). The Conceptual Framework also helps ensure that IFRSs are conceptually consistent with each other and that similar transactions are treated the same way for all reporting entities. In this way, the Conceptual Framework and IFRS provide consistent and useful information for investors and other stakeholders. 

Companies also use the Conceptual Framework in developing accounting policies, particularly with respect to situations and transactions that no IFRS addresses directly. The Conceptual Framework also helps stakeholders understand IFRSs and financial reporting.

The revised Conceptual Framework includes:

  • A new chapter on measurement 
  • Guidance on reporting financial performance
  • Improved definitions and guidance, particularly including the definition of a liability
  • Clarifications in important areas, such as the roles of stewardship, prudence, and measurement uncertainty in financial reporting.

Concomitantly with the Conceptual Framework, the IASB has issued a Basis for Conclusions and Amendments to References to the Conceptual Framework in IFRS Standards. The latter updates references to previous versions of the conceptual framework in IFRSs, their accompanying documents, and IFRS practice statements.

The IASB has also published free supporting materials for the revised Conceptual Framework, including:

  • Project summary
  • Feedback statement with the IASB responses to stakeholder comments during the consultation period
  • Fact sheet
  • Web video briefing and introduction, featuring Hans Hoogervorst.

The effective date of the revised Conceptual Framework is 1 January 2020, with earlier application permitted.

The IASB will host two live web presentations on the revised Conceptual Framework on 18 April 2018, an early morning session and a late afternoon session. Françoise Flores, an IASB member, and IASB technical staff will provide an overview of the revised Conceptual Framework. Participants will have an opportunity to ask questions.

Information on the revised Conceptual Framework is available on this link. http://www.ifrs.org/issued-standards/list-of-standards/conceptual-framework/

Information on the web presentations is available on this link. http://www.ifrs.org/news-and-events/2018/03/live-web-presentations-on-the-revised-conceptual-framework/

 


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