United States

IASB proposes revisions to Conceptual Framework


The International Accounting Standards Board (IASB) recently published an exposure Draft, Conceptual Framework for Financial Reporting, which proposes a number of enhancements to its Conceptual Framework, including:

  • A new chapter on measurement that describes appropriate measurement bases (historical cost and current value, including fair value), and the factors to consider when selecting a measurement basis
  • Confirming that the statement of profit or loss is the primary source of information about a company’s performance, and adding guidance on when income and expenses could be reported outside the statement of profit or loss in “Other Comprehensive Income”
  • Refining the definitions of assets, liabilities, equity, income and expenses
  • Placing more emphasis on the importance of providing information needed for investors to assess management’s stewardship
  • Reintroducing an explicit reference to “prudence” (the exercise of caution when making judgments under conditions of uncertainty)

The IASB also published a separate Exposure Draft, Updating References to the Conceptual Framework, which proposes that references to and quotes from the existing Conceptual Framework be updated in existing standards. 

The Exposure Drafts are available for comment until October 26, 2015.