Response of the EAA Financial Reporting Standards Committee to the IASB Discussion Paper A Review of the Conceptual Framework for Financial Reporting

Abstract

The European Accounting Association (EAA) Financial Reporting Standards Committee (FRSC) provided a response to the International Accounting Standards Board's (IASB's) 2013 Discussion Paper (DP) on completing and revising its Conceptual Framework. The response consisted of a literature-based discussion of the issues raised in the IASB paper and responses to the questions asked. The following paper has omitted the responses to specific questions but otherwise sets out the arguments made to the IASB, together with introductory material to indicate the context. The FRSC paper follows the order of the IASB DP.

Acknowledgements

The FRSC is grateful for comments on an earlier draft from Carien van Mourik, Open University, UK.

Notes

¹ The preliminary view implies that the ability to use the exceptions will be reserved to the IASB: that is, a preparer who (under IAS 8) used the Framework for a transaction that is not the subject of a standard would not be able to use them to conclude that any assets or liabilities should not be recognised. Perhaps such a restriction on the use of the Framework should not appear in the Framework itself.

² One might quibble, however, about the word rather than the definition. Arguably ‘equity’ implies sharing in profits and losses: this does not apply to preference shares who have only a restricted interest in profits. For this reason, the UK ASB's Statement of Principles uses the term ‘ownership interest’ rather than ‘equity’.