Conceptual framework among IASB priorities


By Ken Tysiac

The International Accounting Standards Board (IASB) plans to complete a new conceptual framework by September 2015.

In addition, the board plans to have its technical programme focus on implementation and maintenance, including post-implementation reviews and a small number of International Financial Reporting Standards (IFRS) projects.

The IASB announced that it has mapped its future plans after reviewing more than 240 comment letters in response to a consultation document it published in July 2011. The plans are included in a 40-page feedback statement released by the IASB.

Respondents to the consultation document advised the IASB to:

  • Have a period of relative calm after ten years of almost continuous change in financial reporting.

  • Prioritise work on the conceptual framework. This was one of the recommendations of the comment letter submitted by the Financial Reporting Executive Committee of the American Institute of CPAs (AICPA).

  • Make targeted improvements that respond to the needs of new adopters of IFRS.

  • Pay greater attention to the implementation and maintenance of standards.

  • Improve the way it develops new standards, with more rigorous cost/benefit analysis as well as problem definition earlier in the standard-setting process.

A joint conceptual framework project undertaken by the IASB and the US Financial Accounting Standards Board (FASB) was suspended in 2010 to allow the boards to focus on high-priority, standards-level projects. The remainder of the IASB’s conceptual framework project will not be run jointly with FASB.

An important step in the building of a new conceptual framework will come when the IASB publishes a discussion paper on the topic in June 2013.

With regard to implementation and maintenance, the IASB already has developed a revised process to allow its Interpretations Committee to deal with a wider range of requests. And the first post-implementation review was launched in early 2012 on IFRS 8, Operating Segments. The next standard planned for such a review is IFRS 3, Business Combinations.

The IASB also has started building a forum for national and regional standard-setters to create better dialogue between the board and the standard-setting community. It will be known as the Accounting Standards Advisory Forum.

Nine research projects have been identified as priorities based on the feedback the IASB received. These are:

  • Emissions trading schemes.

  • Business combinations under common control.

  • Discount rates.

  • Equity method of accounting.

  • Intangible assets; extractive activities; and research and development activities.

  • Financial instruments with the characteristics of equity.

  • Foreign currency translation.

  • Non-financial liabilities (amendments to IAS 37, Provisions, Contingent Liabilities and Contingent Assets).

  • Financial reporting in high-inflationary economies.

In addition, the IASB is encouraging other standard-setters to undertake research work on income taxes, a second phase of post-employment benefits standards development, and share-based payments.

The first three standards-level topics the IASB will consider as a result of its request for views are:

  • Agriculture, particularly bearer biological assets such as grapevines or dairy cows.

  • Rate-regulated activities.

  • Separate financial statements: use of the equity method.

“Our new work programme will address many challenging topics,” IASB Chairman Hans Hoogervorst said in the foreword to the feedback statement. “But I look forward to facing those challenges with the support of the wider IFRS community.”

Ken Tysiac (ktysiac@aicpa.org) is a CGMA Magazine senior editor.

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