On 29 May 2008 the International Accounting Standards Board (IASB) and US Financial Accounting Standards Board (FASB) published an exposure draft of chapters 1 and 2 of the Conceptual Framework. It seeks views on an improved objective of financial reporting, the qualitative characteristics of information provided by financial reporting and constraints on the provision of that information. The draft reflects the boards’ updated proposals in the light of comments received on an initial consultation document published in July 2006.
The exposure draft proposes that the objective of financial reporting is to provide financial information that is useful to present and potential equity investors, lenders and other creditors in making decisions in their capacity as capital providers.
It also presents an improved description of ‘faithful representation’, one of the qualitative characteristics that financial information should possess if it is to provide a useful basis for economic decisions.
The Exposure Draft was open for comment until 29 September 2008.