IASB finishes revising conceptual framework
The International Accounting Standards Board issued a revised version of its Conceptual Framework for Financial Reporting, underpinning International Financial Reporting Standards.
The Conceptual Framework describes the fundamental concepts of financial reporting that guide the IASB in developing IFRS Standards, helping ensure the standards are conceptually consistent and that similar transactions are treated the same way, providing useful information for investors and others.
The Conceptual Framework also helps companies develop accounting policies when no IFRS standard applies to a particular transaction and helps stakeholders better understand the standards.
The revised framework includes a new chapter on measurement; guidance on reporting financial performance; improved definitions and guidance—such as a definition of a liability; and clarifications in important areas, such as the roles of stewardship, prudence and measurement uncertainty in financial reporting.
“The revised Conceptual Framework will greatly assist the Board when developing IFRS Standards. It will also help other stakeholders to better understand the concepts that underpin the Standards,” said IASB chairman Hans Hoogervorst in a statement Thursday.
A summary of the Conceptual Framework is available here. There is also a feedback statement summarizing the IASB's response to comments it received, a fact sheet, and a video of Hoogervorst explaining the framework.
The IASB also on Thursday issued Amendments to References to the Conceptual Framework in IFRS Standards to update references in IFRS Standards to previous versions of the Conceptual Framework. The document is available here.
The IASB will start using the revised Conceptual Framework immediately, while companies will begin using it in 2020.