After years of trying to work with the FASB on a revised conceptual framework, the IASB finally decided to abandon the goal of a fully converged framework and to finish a document for its own use. A draft is imminent, and on June 29th, IASB Chair Hans Hoogervorst’s spoke to a conference in Paris about his board’s thinking on key decisions — in particular, the status of historic cost and current value measurements.
Let’s just say for now that I don’t think very much of Mr. Hoogervorst’s speech. To get started, we should step back and consider why the IASB and FASB have conceptual frameworks, and projects to revise them.
Why a Conceptual Framework
When done right, a conceptual framework is an important component of a comprehensive basis of accounting. It should express the commitment of standard setters to hew to broadly accepted principles when developing guidance on the accounting for specific transactions [Read More...]