Conceptual Framework for Financial Reporting

Project history

Following its Agenda Consultation 2011, the IASB decided to restart its work on the Conceptual Framework.

Research phase

Before the IASB issued its Discussion Paper, EFRAG and the French Autorité des Normes Comptables (ANC), the Accounting Standards Committee of Germany (ASCG), the Italian Organismo Italiano di Contabilité (OIC) and the UK Financial Reporting Council (FRC) agreed to work in partnership to stimulate the discussion in Europe on the project. In finalising their comment letters in response to the DP, each partner organisation, however, retained the responsibility for reaching its own position.

On 6 February 2013, EFRAG and its partners issued their stategy on the revision: 

• Bulletin Getting a Better Framework - Our strategy.pdf

On 11 April 2013, EFRAG and its partners issued  Bulletins on prudence, reliability of financial information and uncertainty.

• Bulletin Getting a Better Framework - Prudence
• Bulletin Getting a Better Framework - Reliability of financial information
• Bulletin Getting a Better Framework - Uncertainty

Comments on these bulletin were invited by 5 July 2013. The comments received were considered in developing EFRAG's views on the IASB's discussion papers and exposure drafts.

On 8 July 2013, EFRAG and its partners issued the following Bulletins on the role of a conceptual framework and on the role of the business model in financial reporting:

• Bulletin Getting a Better Framework - The Role of a Conceptual Framework
• Bulletin Getting a Better Framework - The Role of the Business Model in Financial Reporting

Comments on the bulletin were invited by 30 September 2013. The comments received were considered in developing EFRAG's views on the IASB's discussion papers and exposure drafts.

In the research phase EFRAG and its partnes issued four newsletters to keep constituents informed about the development related to the Conceptual Framework.

• Newsletter Keep Up With Getting a Better Framework - February 2013.pdf
• Newsletter Keep Up With Getting a Better Framework - March 2013.pdf
• Newsletter Keep Up With Getting a Better Framework - April 2013.pdf
• Newsletter Keep Up With Getting a Better Framework - June 2013.pdf

Discussion Paper consultation

In July 2013, the IASB issued its Discussion Paper DP/2013/1 A Review of the Conceptual Framework for Financial Reporting ('the DP').  The DP included chapters on:

• Elements of financial statements (including recognition and derecognition);  
• Measurement;
• Reporting entity;
• Presentation and disclosure (including questions about the use of other comprehensive income).

On 12 September 2013, EFRAG and its partners issued the following Bulletins on the asset/liability approach and accountability and the objective of financial reporting:

• Bulletin Getting a Better Framework - The Asset-LIability Approach
• Bulletin Getting a Better Framework - Accountability and the Objective of Financial Reporting

Comments on these Bulletins were invited by 15 November 2013.

On 26 September 2013, EFRAG issued its draft comment letter in response to the IASB's discussion paper and a short presentation of its preliminary views.

• Draft comment letter on DP-2013-1.pdf
• EFRAG's preliminary position on the IASB Discussion Paper A Review of the Conceptual Framework for Financial Reporting 26 September 2013.pdf

During the consultation period, EFRAG arranged outreach events in the following European cities:

• Frankfurt, in partnership with the ASCG: 25 October 2013. Feedback statement for outreach in Frankfurt 2013-10-25.pdf
• Amsterdam, in partnership with the DASB: 30 October 2013. Feedback statement for outreach in Amsterdam 2013-10-30.pdf 
• Copenhagen, in partnership with DI - Confederation of Danish Industry and FSR - Danish Auditors: 4 November 2013. Feedback statement for outreach in Copenhagen 2013-11-04.pdf
• Vienna, invitation only joint outreach event in partnership with AFRAC: 5 November 2013. Feedback statement for outreach in Vienna 2013-11-05.pdf
• Vilnius, in partnership with the Audit and Accounting Authority of Lithuania: 5 November 2013. Feedback statement for outreach in Vilnius 2013-11-05.pdf
• Warsaw, in partnership with KSR and in cooperation with the World Bank Centre for Financial Reporting Reform within the framework of the Swiss-Polish Cooperation Programme: 19 November 2013. Feedback statement for outreach in Warsaw 2013-11-19.pdf
• Luxembourg, in partnership with Luxembourg Commission des Normes Comptables, the Chamber of Commerce Luxembourg and the Luxembourg School for Commerce: 26 November 2013.

The purpose of these outreach events was to:

• Stimulate the debate in Europe;
• Obtain input from European Constituents and to understand their main concerns and wishes, in particular from those that may not intend to submit a comment letter to the IASB or EFRAG; and
• Find out whether the preliminary comments as set out in EFRAG's draft comment letter are shared by European constituents.

EFRAG issued its comment letter in response to the IASB's Discussion Paper A Review of the Conceptual Framework  on 3 February 2014.

• Comment letter on DP-2013-1.pdf

[Please note that the dates provided for the documents below relating to the discussion paper do not reflect when the documetens were first published on EFRAG's old website]

On 10 February 2014, EFRAG and its partners issued a Bulletin on complexity. The Bulletin reflected in detail on the causes of complexity in accounting and suggested that additional guidance in the Conceptual Framework could be of help to minimise complexity.

• Bulletin Getting a Better Framework - Complexity

 Comments on this Bulletin were invited by 30 April 2014.

Exposure Draft consultation 

On 29 May 2015 the IASB issued the Exposure Draft ED/2015/3 Conceptual Framework for Financial Reporting.

On 8 July 2015 EFRAG issued a Document for Public Consultation on the IASB Exposure Draft.

•  EFRAG consultation document on IASB ED-2015-3.pdf

Comments were invited by 2015.

EFRAG's consultation document was slightly amended on 8 November 2015 to reflect EFRAG's tentative position.

• Document showing changes to document for public consultation on IASB ED-2015-3.pdf

EFRAG requests comments on the document by 18 November 2015.

On 14 July 2015 EFRAG published a Bulletin on profit or loss versus OCI to stimulate the discussion.

• Bulletin Getting a Better Framework - Profit or Loss versus OCI

EFRAG requested comments on this Bulletin by 18 November 2015.

From 1 July 2015 to 30 November 2015, EFRAG organised the following series of joint outreach events with user organisations and National Standard Setters:

• European user event (Brussels) 1 July 2015 – organised together with EFFAS/ABAF and the IASB (Feedback statement for outreach with users in Brussels 2015-07-01.pdf);
• France (Paris) 14 September 2015 – organised together with the French Accounting Standards Authority (ANC) and the IASB (Feedback statement for outreach in Paris 2015-09-14.pdf);
• Norway (Oslo) 16 September 2015 - organised together with the Norwegian Accounting Standards Board (NRS) and the IASB (Feedback statement for outreach in Oslo 2015-09-16.pdf);
• Spain (Madrid) 21 September 2015 - organised together with the Spanish Institute for Accounting and Auditing (ICAC) and the IASB (Feedback statement for outreach in Madrid 2015-09-21.pdf );
• The Baltic states (Vilnius) 23 September 2015 – organised together with the Estonian Ministry of Finance, the Latvian Ministry of Finance, the Lithuanian Authority of Audit and Accounting (AAT) and the IASB (Feedback statement for outreach in Vilnius 2013-11-05.pdf);
• Europe (Brussels) 23 September 2015 (Feedback statement for outreach in Brussels 2015-09-23.pdf);
• Poland (Warsaw) 30 September 2015 - organised together with the Polish Accounting Standards Committee (KSR), the IASB and in cooperation with the World Bank (Feedback statement for outreach in Warsaw 2013-11-19.pdf);
• The Netherlands (Amsterdam) 5 October 2015 - organised together with the Dutch Accounting Standards Board and the IASB (Feedback statement for outreach in Amsterdam 2015-10-05.pdf);
• Finland (Helsinki) 14 October 2015 – organised together with the Finnish Financial Supervisory Authority, the Ministry of Employment and the Economy, the Confederation of Finnish Industries EK and the IASB (Feedback statement for outreach in Helsinki 2015-10-14.pdf);
• Italian user event (Milan) 22 October 2015 - organised together with EFFAS, the Italian Association of Financial Analysts (AIAF) and the IASB (Feedback statement for outreach with users in Milan 2015-10-22.pdf); and
• Italy (Rome) 30 November 2015 – organised together with the Italian OIC and the IASB (Feedback statement for outreach in Rome 2015-11-30.pdf).

• London, organised by the Financial Reporting Council and the ICAEW Financial Reporting Faculty: 3 September 2015; and
• Frankfurt, organised by the ASCG, the Austrian Financial Reporting and Auditing Committee (AFRAC) and the Swiss GAAP FER Foundation: 14 September 2015.

On 23 December 2015 EFRAG published its comment letter in response to the ED. EFRAG was of the view that the ED provided solution to some current problems. It therefore represented an improvement compared with the current Conceptual Framework. EFRAG, however, also considered that there were many, and probably too many, areas where the ED did not provide the necessary principles that could effectively direct future standard setting. These areas included measurement and the use of OCI although the development of such guidance was one of the main objectives of the revision of the Conceptual Framework. In other areas, such as prudence and stewardship, EFRAG was not yet satisfied with the IASB’s proposals. EFRAG's comment letter and EFRAG's feedback statement on the comments received are available here:

• Comment letter on IASB ED-2015-3.pdf

• Feedback statement on DCL on IASB ED-2015-3.pdf

In its comment letter in response to the ED, EFRAG noted that it would provide the IASB with additional input on the proposed definitions of assets and liabilities after having analysed the results of a questionnaire EFRAG issued on 17 November 2015 on the proposed definitions of assets and liabilities.

The IASB publish the Conceptual Framework for Financail Reporting on 29 March 2018.