The iasb fasb conceptual framework project
Download
1 / 15

The IASB/FASB Conceptual Framework Project - PowerPoint PPT Presentation


  • 148 Views
  • Uploaded on

The IASB/FASB Conceptual Framework Project. A Public Sector Perspective Kevin Simpkins. Outline. Concepts – Why they matter Overview of the Project Progress to Date Some Public Sector Issues Concluding Thoughts. Concepts – Why they Matter (generally).

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'The IASB/FASB Conceptual Framework Project' - betty_james


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
The iasb fasb conceptual framework project

The IASB/FASB Conceptual Framework Project

A Public Sector Perspective

Kevin Simpkins


Outline
Outline

  • Concepts – Why they matter

  • Overview of the Project

  • Progress to Date

  • Some Public Sector Issues

  • Concluding Thoughts


Concepts why they matter generally
Concepts – Why they Matter (generally)

  • The Basis for Accounting Standards Development

  • A Key Element in “Principles-based” Standard setting

  • An antidote to vested interests (or just preconceived conclusions!)

  • To enhance efficiency in standard-setting


Concepts why this project matters
Concepts – Why this project matters

  • Key to IASB/FASB Convergence

  • New concepts will have significant influence internationally

  • IPSASB’s implicit framework is that of the IASB

  • IASB/FASB work will be a key reference source for the IPSASB

    (Note that IPSASB is considering its strategy for a Conceptual Framework at its meeting this month)


Overview of the iasb fasb project objective
Overview of the IASB/FASB Project - Objective

“…to develop a common conceptual framework that is both complete and internally consistent…

…a sound foundation for developing future accounting standards…”


Overview of the iasb fasb project process
Overview of the IASB/FASB Project - Process

  • Building on the Existing Frameworks

  • Concentrating on environmental changes and omissions from existing frameworks

  • Prioritising cross-cutting issues that affect a number of projects

  • Initially considering private sector business entities only


Overview of the iasb fasb project the phases
Overview of the IASB/FASB Project – The Phases

Phase A Topic

A Objectives and qualitative characteristics

B Elements, recognition and measurement attributes

C Initial and subsequent measurement

D Reporting entity

E Presentation and disclosure, including financial reporting boundaries

F Framework purpose and status in GAAP hierarchy

G Applicability to the not-for-profit sector

H Entire framework


The iasb fasb project progress to date
The IASB/FASB Project – Progress to Date

  • Phase A – Objectives and Qualitative Characteristics

    • Exposure draft due in near future

  • Phase B – Elements, recognition etc.

    • Early work done on asset and liability definitions

  • Phase D – Reporting Entity

    • Planning and Preliminary Analysis done


The iasb fasb project some public sector issues
The IASB/FASB Project – Some Public Sector Issues

  • Timing of Consideration of Not-for-Profits

    • Creates risk NFP context will not be well considered

    • Is delivering some concepts that are not broadly applicable

    • Inefficient as a standard-setting approach

    • A challenge for “neutrality” – both transactions and sectors


The iasb fasb project some public sector issues cont
The IASB/FASB Project –Some Public Sector Issues (cont)

  • Stewardship/Accountability is not a Separate Objective of Financial Reporting

    • The objective is to assist investors and others in making investment, credit and similar decisions

    • Too narrow for the public sector – accountability is at least a separate objective

    • A risk – the pervasive impact of an incomplete objective because “all things are related”

      An aside: Whither prospective information?


The iasb fasb project some public sector issues cont1
The IASB/FASB Project –Some Public Sector Issues (cont)

  • Too narrow a Primary User Group

    • Primary User Group is present and potential investors and creditors

    • In the public sector legislation and funders are key users who cannot be excluded

  • No recognition of Compliance


The iasb fasb project some public sector issues cont2
The IASB/FASB Project –Some Public Sector Issues (cont)

  • Pervasive Focus is on Assessing Cash Flow Prospects

    • Cash Flows are relevant to the public sector but not always

    • Service performance is a more important focus for the public sector environment

    • The focus extends deeply such as into the asset definition area


The iasb fasb project some public sector issues cont3
The IASB/FASB Project –Some Public Sector Issues (cont)

  • Changes to the Qualitative Characteristics

    • A process approach – new for all

    • But does not encourage consideration of differences between entities

    • Relevance relates to “economic decisions of users”

    • Materiality is also related to “economic decisions” of users


The iasb fasb project some public sector issues cont4
The IASB/FASB Project –Some Public Sector Issues (cont)

  • Asset Definition too Narrow

    • Economic Benefits again!

    • Benefits “to the entity”

    • The notion of stand ready assets (and liabilities) is new and needs careful consideration

    • No help with the tough issues – social policy obligations especially


Concluding thoughts
Concluding Thoughts

  • This project is important as are the others being worked on internationally

  • The potential impacts are significant and likely to be enduring

  • The public sector needs to monitor the work of both IASB and IPSASB and your own national bodies and comment