A Converged Conceptual Framework

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A Converged Conceptual Framework In October 2004, the FASB and IASB added to their agendas a joint project to develop an improved, common conceptual framework that builds on their existing frameworks (that is, the IASB’s Framework for the Preparation and Presentation of Financial Statements and the FASB’s Statements of Financial Accounting Concepts). Rationale for the Project and Project Objective A conceptual framework is basically a foundation serving as a guide to standard setters to help them establish the principles and concepts. Therefore, the conceptual framework project is to develop an improved common conceptual framework that provides a foundation for developing future accounting standards. In this sense, the framework is…show more content…
The boards noted that the finalization may need to be readdressed when they discuss the placement of the framework within the IASB and FASB hierarchies. So far, only phase A has been completed. Agenda for the discussion papers of Phase E, F and G have not been determined yet. IFRS said in its Conceptual Framework Project that “timetables for two inactive phases (E and F) are to be established”. Discussions Bullen and Crook in their article, Revisiting the Concepts (2005), discussed the nature of the new conceptual Framework project. They said the FASB and IASB began this project to “revisit their conceptual frameworks for financial accounting and reporting.” In other words, the project will result in an improved, complete and consistent conceptual framework as a new guidance for future standard-setting. Furthermore, as we’ve discussed in ACCT 598 class, principles-based standards are needed to push the entire accounting system toward a principles-based approach that will “improve the quality and transparency of financial accounting and affect development of future standards”. (FASB, 2002) Apparently, principles-based standards require a sound conceptual framework as a foundation for standard-setting. In terms of it is a joint project, there are benefits for the project
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