Our Financial Reporting Expert Group contributed to our response to the IASB Exposure Draft – Conceptual Framework for Financial Reporting. We generally supported the proposals and had a few comments on specific points.
We noted that faithful representation does not fully capture the characteristics of reliability and as such, reliability should be reinstated as a fundamental characteristic. Regarding the definition of elements, further work is needed to ensure that the definitions provide a suitable basis for the Conceptual Framework. We highlighted that there is no definition given for ‘revenue’ or ‘profit’ despite the fact that these are key metrics within most companies’ accounts.
We added that there should be further discussion on the impact of the business model on the relevant measurement basis.