The International Accounting Standards Board (Board) has today issued a revised version of its Conceptual Framework for Financial Reporting that underpins IFRS® Standards.
The Conceptual Framework sets out the fundamental concepts of financial reporting that guide the Board in developing IFRS Standards. It helps to ensure that 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 assists companies in developing accounting policies when no IFRS Standard applies to a particular transaction; and it helps stakeholders more broadly to understand the Standards better.
The revised Conceptual Framework includes: a new chapter on measurement; guidance on reporting financial performance; improved definitions and guidance—in particular the definition of a liability; and clarifications in important areas, such as the roles of stewardship, prudence and measurement uncertainty in financial reporting.
Hans Hoogervorst, Chair of the Board, said:
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.
The Conceptual Framework and the Basis for Conclusions are available here (requires eIFRS premium subscription).
Today, the Board has also 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 (requires eIFRS premium subscription).
The Board will start using the revised Conceptual Framework immediately, whereas companies will use it from 2020.