Updated Conceptual Framework
The IASB today issued an updated version of its Conceptual Framework for Financial Reporting. The Conceptual Framework provides the foundations for the IFRS standards, helping reporting entities, regulators and the standards setters themselves with the rationale behind financial reporting concepts and objectives.
Last updated in 2010, the framework:
- Confirms the objective of financial reporting and clarifies the role of stewardship
- Emphasises the importance of reporting financial performance, while confirming that financial position (assets, liabilities) remain important to investors
- Improves the rationale behind reporting assets, liabilities, income and expenses based on utility for investors
- Introduces guidance on measurement, providing revised reasoning behind measuring assets at historical cost vs current value
The updated Conceptual Framework provides a revised source of authoritative literature and will influence the way that the IFRS accounting standards continue to evolve.
With the IFRS taxonomy supporting more and more reporting environments around the world, the Conceptual Framework can be thought of as one of the key reference tools for use in understanding reporting, whether digital or not.
You can find out more about the announcement here.