The Conceptual Framework for Financial Reporting
The Conceptual Framework was issued by the IASB in September 2010. It superseded the Framework for the Preparation and Presentation of Financial Statements.
THE CONCEPTUAL FRAMEWORK FOR FINANCIAL REPORTING
INTRODUCTION Purpose and status Scope CHAPTERS 1 2 3 4 The objective of general purpose financial reporting The reporting entity to be added Qualitative characteristics of useful financial information The Framework (1989): the remaining text Underlying assumption The elements of financial statements Recognition of the elements of financial statements Measurement of the elements of financial statements Concepts of capital and capital maintenance FOR THE ACCOMPANYING DOCUMENTS BELOW, SEE PART B OF THIS EDITION APPROVAL BY THE BOARD OF THE CONCEPTUAL FRAMEWORK 2010 BASIS FOR CONCLUSIONS ON CHAPTERS 1 AND 3 TABLE OF CONCORDANCE 4.1 4.2–4.36 4.37–4.53 4.54–4.56 4.57–4.65 QC1–QC39 OB1–OB21
The International Accounting Standards Board is currently in the process of updating its conceptual framework. This conceptual framework project is conducted in phases. As a chapter is finalised, the relevant paragraphs in the Framework for the Preparation and Presentation of Financial Statements that was published in 1989 will be replaced. When the conceptual framework project is completed, the Board will have a complete, comprehensive and single document called the Conceptual Framework for Financial Reporting. This version of the Conceptual Framework includes the first two chapters the Board published as a result of its first phase of the conceptual framework project—Chapter 1 The objective of general purpose financial reporting and Chapter 3 Qualitative characteristics of useful financial information. Chapter 2 will deal with the reporting entity concept. The Board published an exposure draft on this topic in March 2010 with a comment period that ended on 16 July 2010. Chapter 4 contains the remaining text of the Framework (1989). The table of concordance, at the end of this publication, shows how the contents of the Framework (1989) and the Conceptual Framework (2010) correspond.
The Introduction has been carried forward from the Framework (1989). This will be updated when the IASB considers the purpose of the Conceptual Framework. Until then, the purpose and the status of the Conceptual Framework are the same as before.
Financial statements are prepared and presented for external users by many entities around the world. Although such financial statements may appear similar from country to country, there are differences which have probably been caused by a variety of social, economic and legal circumstances and by different countries having in mind the needs of different users of financial statements when setting national requirements. These different circumstances have led to the use of a variety of definitions of the elements of financial statements: for example, assets, liabilities, equity, income and expenses. They have also resulted in the use of different criteria for the recognition of items in the financial statements and in a preference for different bases of measurement. The scope of the financial statements and the disclosures made in them have also been affected. The International Accounting Standards Board is committed to narrowing these differences by seeking to harmonise regulations, accounting standards and procedures relating to the preparation and presentation of financial statements. It believes that further harmonisation can best be pursued by focusing on financial statements that are prepared for the purpose of providing information that is useful in making economic decisions. The Board believes that financial...