The International Accounting Standards Board (IASB) has issued for public comment a discussion paper exploring possible changes to the Conceptual Framework for financial reporting.
The IASB said the Conceptual Framework sets out the concepts that underlie the preparation and presentation of financial statements. It identifies principles for the IASB to use when it develops and revises its IFRS.
This discussion paper is designed to obtain initial views and comments on the following issues:
- definitions of assets and liabilities;
- recognition and derecognition;
- the distinction between equity and liabilities;
- presentation and disclosure; and
- other comprehensive income.
IASB chairman Hans Hoogervorst said the discussion paper, "gives people the opportunity to help us to shape the future of financial reporting by discussing the concepts that drive our work".
The UK Financial Reporting Council said the document, "offers a once-in-a-generation opportunity for investors and directors to have an input into the direction of financial reporting standards for UK listed companies".
FRC board member and chairman of the FRC’s accounting council Roger Marshall 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."
Institute of Chartered Accountants in England and Wales head of the Financial Reporting Faculty Nigel Sleigh-Johnson said that the issues discussed by the IASB are "of fundamental importance to the future of international financial reporting".
"It is disappointing to see that while the paper discusses the 2010 exclusion of prudence from the conceptual framework, it does not suggest reinstating it. Whether or not this should happen will, I’m sure, prove a key part of the forthcoming debate."