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IFRS

Conceptual framework for financial reporting

Teerasak Chuasrisakul

The IASB has published a revised Conceptual Framework that clarifies and updates its existing guidance that was published in 1989 and updated in 2010. It also fills gaps in areas where there was no or only little guidance.

The Conceptual Framework describes the objective of, and the concepts for, general purpose financial reporting. Its purpose is to:

  • assist the IASB in developing IFRS Standards that are based on consistent concepts
  • assist preparers in developing accounting policies for transactions or events to which no Standard applies or when a Standard allows a choice of accounting policy
  • help all other parties to understand and interpret the Standards.

The revised Conceptual Framework now contains a comprehensive set of concepts, making some major changes to the previous version. It now contains guidance on:

  • measurement
  • presentation and disclosure
  • the reporting entity 
  • derecognition.

It further updates the definitions of assets and liabilities and the guidance on recognition as well as clarifying the concepts of measurement uncertainty, prudence, stewardship and substance over form.

This special edition of IFRS News [ 139 kb ] explains the key features of the revised Conceptual Framework and provides practical insights into its application and impact.

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