bases that do not appear to fit under either of these is not clear, for example the equity basis of measurement (for associates and JVs). The lack of reference to joint control or significant influence noted in response to Q2 above makes this of greater importance. 6.23 The discussion could make clearer that fair value reflects future cash flows except for transaction costs. The CF might note that sometimes transaction costs are not separated but are reflected in the bid-offer spread. Question 9—Factors to consider when selecting a measurement basis Has the IASB correctly identified the factors to consider when selecting a measurement basis? If not, what factors would you consider and why? We agree with the factors identified, especially the two in paragraph 6.54. The CF could spell out the implications of these, in terms of which business models are more likely to lead to current values and which more likely to lead to cost-based measures. Question 10—More than one relevant measurement basis Do you agree with the approach discussed in paragraphs 6.74–6.77 and BC6.68? Why or why not? There may be cases where, using the criteria of relevant information, the profit or loss treatment might be best on a historical cost basis and yet the balance sheet should incorporate a current value. However such treatments do go against the basic model of the connection of income statements and balance sheets and can add significant complexity (see our comments in response to Q13 and Q14). So such solutions should not be readily employed. Question 11—Objective and scope of financial statements and communication Do you have any comments on the discussion of the objective and scope of financial statements, and on the use of presentation and disclosure as communication tools? We agree with what is included in these sections. . Question 12—Description of the statement of profit or loss Do you support the proposed description of the statement of profit or loss? Why or why not?
bases that do not appear to fit under either of these is not clear, for example the equity basis of measurement (for associates and JVs). The lack of reference to joint control or significant influence noted in response to Q2 above makes this of greater importance. 6.23 The discussion could make clearer that fair value reflects future cash flows except for transaction costs. The CF might note that sometimes transaction costs are not separated but are reflected in the bid-offer spread. Question 9—Factors to consider when selecting a measurement basis Has the IASB correctly identified the factors to consider when selecting a measurement basis? If not, what factors would you consider and why? We agree with the factors identified, especially the two in paragraph 6.54. The CF could spell out the implications of these, in terms of which business models are more likely to lead to current values and which more likely to lead to cost-based measures. Question 10—More than one relevant measurement basis Do you agree with the approach discussed in paragraphs 6.74–6.77 and BC6.68? Why or why not? There may be cases where, using the criteria of relevant information, the profit or loss treatment might be best on a historical cost basis and yet the balance sheet should incorporate a current value. However such treatments do go against the basic model of the connection of income statements and balance sheets and can add significant complexity (see our comments in response to Q13 and Q14). So such solutions should not be readily employed. Question 11—Objective and scope of financial statements and communication Do you have any comments on the discussion of the objective and scope of financial statements, and on the use of presentation and disclosure as communication tools? We agree with what is included in these sections. . Question 12—Description of the statement of profit or loss Do you support the proposed description of the statement of profit or loss? Why or why not?
50_5817_RichardMartinACCA_0_conceptualFrameworkResp1115.docx