'Prudence and accountability' central to IASB Conceptual Framework, says ACCA | ACCA Global
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This is an unsatisfactory situation where important aspects of setting accounting standards are missing. We also need a more coherent definition of liabilities that brings together the approach to conditional liabilities, constructive liabilities and the implications of economic compulsion
—Richard Martin, head of corporate reporting, ACCA

Important areas are missing from the concepts for the preparation and presentation of financial statements, says ACCA (the Association of Chartered Certified Accountants) in its official response to the IASB’s consultation Conceptual Framework for Financial Reporting

ACCA’s Global Forum for Corporate Reporting developed the detailed feedback to the IASB’s consultation, saying that the concepts of prudence and accountability need to be addressed and explained in this Conceptual Framework.

Richard Martin, head of corporate reporting at ACCA, comments: 'This Framework is important as it helps the IASB prepare, develop and revise IFRS in a coherent and consistent way. 

'While accountability is referred to in the Framework, and prudence is built into the existing IFRS in a number of ways, both need to be given more importance in the Framework.' 

ACCA broadly welcomes the proposals on measurement and the choice between different measures such as cost and market values as going a long way to providing appropriate guidance. This should help fill one of the major holes in the current framework.

However in another critical area – what should be part of profit for the year and what can be treated as other comprehensive income – more work needs to be done to develop definitions and principles. There are other gaps in the Framework where no concept or principle seems to be included – such as on the unit of account issue, de-recognition and disclosures. 

Richard Martin adds: 'This is an unsatisfactory situation where important aspects of setting accounting standards are missing. We also need a more coherent definition of liabilities that brings together the approach to conditional liabilities, constructive liabilities and the implications of economic compulsion.'

ACCA’s response to the consultation can be found via the 'Related Link's section, left of this article.

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For more information, please contact:

Helen Thompson, ACCA Newsroom
+44 (0)20 7059 5759
+44 (0)7725 498654
helen.thompson@accaglobal.com 

Notes to Editors

  1. ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants. We aim to offer business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management. 
  2. We support our 162,000 members and 428,000 students in 173 countries, helping them to develop successful careers in accounting and business, with the skills required by employers. We work through a network of over 89 offices and centres and more than 8,500 Approved Employers worldwide, who provide high standards of employee learning and development. Through our public interest remit, we promote appropriate regulation of accounting and conduct relevant research to ensure accountancy continues to grow in reputation and influence. 
  3. Founded in 1904, ACCA has consistently held unique core values: opportunity, diversity, innovation, integrity and accountability. We believe that accountants bring value to economies in all stages of development and seek to develop capacity in the profession and encourage the adoption of global standards. Our values are aligned to the needs of employers in all sectors and we ensure that through our qualifications, we prepare accountants for business. We seek to open up the profession to people of all backgrounds and remove artificial barriers, innovating our qualifications and delivery to meet the diverse needs of trainee professionals and their employers.