Global Standards for the world economy

Thursday 19 September 2019

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Conceptual Framework


 Due process steps

Stage 4: Exposure Draft (ED)

 

Step Required/
Optional
Metrics or
evidence
Actions
IASB meetings held in public, with papers available for observers. All decisions are made in public session.

Required

Meetings held.

Project website contains a full description with up-to-date information on the project.

Meeting papers posted in a timely fashion.

IASB meetings

The IASB and the FASB held public meetings on the joint Conceptual Framework project in 2004–2010.

The IASB held public meetings, including public education sessions, leading up to the publication of the Discussion Paper A Review of the Conceptual Framework for Financial Reporting, from September 2012 to May 2013.

The IASB held public meetings, including a public education session, in developing the Conceptual Framework ED from March 2014 to March 2015.

Project website

The Conceptual Framework page of the IFRS Foundation website has been in place over the course of the project. It contains a description of the project objective and history, meeting papers, summaries of the tentative decisions made (IASB Update) and recordings of the meetings, as well as papers discussed with the IASB advisory bodies. It contains comment letters on the Conceptual Framework Discussion Paper that was issued in July 2013 and summaries of the feedback received. It also contains information about the work performed by the IASB and the FASB before the project was suspended in 2010.

Meeting papers

All meeting papers have been posted on the IASB website prior to the meeting dates.

Consultation with the Trustees and the IFRS Advisory Council (the Advisory Council).

Required

Discussions with the Advisory Council.

The Advisory Council has been updated on the progress of the Conceptual Framework project at every meeting. In addition, the Advisory Council discussed:

  1. the feedback on the Discussion Paper at its June 2014 meeting and provided input on:
  2. i. the strategy and timetable of the project; and
    ii. the purpose and status of the Conceptual Framework.
  3. long-term investment at its October 2014 meeting.

 

The papers are provided on the Conceptual Framework page of the IFRS Foundation website.

The Due Process Oversight Committee (DPOC)

The DPOC has been regularly updated on the status of the project, most recently at its meeting in April 2015.

 

Consultative groups used, if formed.

Optional

Extent of consultative group meetings and evidence of substantive involvement in issues.

Consultative group review of the draft ED.

As stated on the Conceptual Framework page of the IFRS Foundation website, the Conceptual Framework’s consultative group is the Accounting Standards Advisory Forum (ASAF).

During the development of the Conceptual Framework ED, the ASAF discussed the Conceptual Framework project at its meetings in March, June and September 2014 and March 2015. All papers and summaries from these meetings are included on the Conceptual Framework page of the IFRS Foundation website.

Fieldwork is undertaken to analyse proposals.

Optional

The IASB has described publicly the approach taken on fieldwork.

The IASB has explained to the DPOC why it does not believe fieldwork is warranted, if that is the preferred path. Extent of field tests taken.

The Conceptual Framework is not a Standard and does not override the requirements of specific Standards. The revised Conceptual Framework will guide the IASB in setting Standards and other parties in applying any new or amended Standards or developing accounting policies on the basis of the revised Conceptual Framework.

The revised Conceptual Framework will not cause immediate changes to existing Standards. The effects of the revised Conceptual Framework on the existing Standards are discussed in greater detail in the Effects Analysis section.

Accordingly, the revised Conceptual Framework is expected to have only a limited direct effect on parties other than the IASB and therefore fieldwork is not considered necessary.

Outreach meetings with a broad range of stakeholders, with special effort to consult investors.

Optional

Extent of meetings held.

Evidence of specific targeted efforts to consult investors.

Before the Conceptual Framework project was suspended in 2010, the IASB and the FASB had round-table meetings on measurement and published Discussion Papers and Exposure Drafts on ‘reporting entity’, ‘objective’ and ‘qualitative characteristics’. Various parties contributed to those discussions. That work fed into the development of the 2013 Discussion Paper. In addition, in January 2013, the IASB held a public discussion forum on disclosure that also fed into the development of the proposals in the Discussion Paper.

Since the publication of the Discussion Paper, IASB members and staff have conducted outreach and consultation with a broad range of interested parties from various jurisdictions. There were more than 150 outreach meetings conducted, including the following:

  1. public round-table meetings in London, Toronto, São Paolo and Tokyo held in October–November 2013;
  2. outreach meetings organised by local standard-setters in Asia, Europe, Latin America, North America and South Africa during the comment period of the Discussion Paper;
  3. presentations and debates at various conferences, including World Standard-setters and IFRS conferences; and
  4. meetings with groups or individuals, from various backgrounds, including preparers, auditors, national standard-setters, academics, regulators and targeted outreach with investors and analysts.

 

The purpose of the outreach meetings ranged from providing an overview of the Discussion Paper to getting feedback on the IASB’s preliminary views. Not all topics were discussed at every meeting. Instead, the focus was on the topics that were thought to be of particular interest to the meeting participants.

Investors and analysts

IASB members and staff conducted targeted outreach with investors and analysts that focused on the distinction between liabilities and equity, presentation in profit or loss and other comprehensive income, measurement and issues related to prudence, reliability and stewardship. There were a total of 26 meetings specifically with investors and analysts.

 

Webcasts and podcasts to provide interested parties with high level updates or other useful information about specific projects.

Optional

Extent of, and participation in, webcasts.

IASB members and staff conducted podcasts during the development of the Discussion Paper to provide updates on IASB discussions. Upon the publication of the Discussion Paper, IASB members and staff conducted a webcast that provided an overview of the Discussion Paper and separate webcasts for every section in the Discussion Paper. The IASB has also conducted a podcast to explain particular proposals in the Discussion Paper.

Public discussions with representative groups.

Optional

Extent of discussions held.

The Conceptual Framework project was discussed by the members of the Capital Markets Advisory Committee (CMAC), the Global Preparers Forum (GPF) and the ASAF at public meetings that fed into the development of the Conceptual Framework ED.

Online survey to generate evidence in support of or against a particular approach.

Optional

Extent and results of surveys.

The IASB undertook a survey on disclosures and that survey fed into the development of the Discussion Paper. A survey on other aspects of Conceptual Framework is not considered necessary at this point.

The IASB hosts regional discussion forums, where possible, with national standard-setters.

Optional

Schedule of meetings held in these forums.

Most of the outreach meetings were organised together with either the regional national standard-setters or the national standard-setters. In addition, the IASB members and staff gave presentations on the Conceptual Framework project in IFRS Conferences in Singapore, London, Johannesburg and Mexico.

Round-table meetings between external participants and members of the IASB.

Optional

Extent of meetings held.

The IASB hosted public round-table meetings in London, Toronto, São Paolo and Tokyo in October–November 2013.

Analysis of the likely effects of the forthcoming Standard or major amendment, for example, initial costs or ongoing associated costs.

Required

Publication of the Effects Analysis as part of the Basis for Conclusions.

As stated, the Conceptual Framework is not a Standard and does not override the requirements of specific Standards. The revised Conceptual Framework will guide the IASB in setting Standards and will guide other parties in applying any new or amended Standards or developing accounting policies on the basis of the revised Conceptual Framework.

The revised Conceptual Framework will not necessarily lead to changes to existing Standards. Any decision to amend an existing Standard would require the IASB to go through its normal due process for adding a project to its agenda and for developing an Exposure Draft and an amendment to that Standard. In addition, when the IASB considers whether to start a project to amend an existing Standard, the existence of any possible inconsistences between the Standard and the Conceptual Framework is only one factor that the IASB would consider. As stated in paragraph 4.23 of the Due Process Handbook, amending a Standard is not an automatic consequence of revisions to the Conceptual Framework. Instead, changes to Standards are made to address deficiencies in financial reporting.

The revised Conceptual Framework is expected to have a limited direct effect on parties other than the IASB. The IASB has considered effects of the revised Conceptual Framework on parties other than the IASB in its deliberations of the Conceptual Framework ED. For example, the IASB discussed the transition period for entities that apply the Conceptual Framework in developing accounting policies.

The Effects Analysis will be also be included in the Basis for Conclusions in the Conceptual Framework ED.

Due process steps reviewed by the IASB.

Required

Summary of all due process steps discussed by the IASB before a Standard is issued.

In October 2014 the IASB confirmed that they are satisfied that the IASB has undertaken sufficient due process steps. Following this, the staff provided the DPOC with a copy of the analysis of due process steps discussed with the IASB.

The ED has an appropriate comment period.

Required

The period has been set by the IASB.

If outside the normal comment period, an explanation from the IASB to the DPOC has been provided and the decision has been approved.

The ED has a comment period of 151 days (up to 26 October 2015).