Support for updating concepts for latest IASB thinking and filling in gaps 3 The AASB supports some of the preliminary views regarding updating the IASB’s IASB Conceptual Framework to reflect the latest thinking on conceptual IASB’s issues, and some of the preliminary views on how to fill in gaps in the IASB’s existing Conceptual Framework. For example, it supports the preliminary IASB’s views that: (a) the definitions of and a should be amended to focus on an ‘asset’ ‘liability’ economic resources and obligations, rather than inflows and outflows (respectively) of economic benefits that each economic resource or obligation may generate; (b) an should be defined as or other source of ‘economic resource’ “a right, value, that is capable of producing economic 3.4 of the benefits” (paragraph DP), which would confirm a shift away from traditional notions of accounting for physical objects and toward accounting for different rights composing economic resources. This shift should be particularly helpful over time in addressing derecognition of components of assets (e.g. financial assets); (c) the Conceptual Framework should not retain the recognition criterion that an asset or a liability must have a cost or value that can be measured with reliability; (d) the Conceptual Framework should include derecognition criteria for assets and liabilities, and that these criteria should be neutral (i.e. symmetrical with the recognition criteria); and (e) a obligation should be taken to distinguishing liabilities and ‘strict approach’ equity, including classifying as liabilities only present obligations to transfer economic resources. 4 The AASB also supports the intention not to fundamentally reconsider IASB’s Chapters 1 and 3 of the Conceptual Framework for the reasons given in paragraph 9.2 of the DP. In particular, the AASB: (a) considers it would be unnecessary and inappropriate to amend Chapter 1 to give greater emphasis to stewardship; (b) considers it would be inappropriate to reintroduce the qualitative characteristic of reliability to Chapter 3; and (c) would strongly disagree with reintroducing the qualitative characteristic of prudence to Chapter 3. Serious concerns
Support for updating concepts for latest IASB thinking and filling in gaps 3 The AASB supports some of the IASB’s preliminary views regarding updating the IASB Conceptual Framework to reflect the IASB’s latest thinking on conceptual issues, and some of the IASB’s preliminary views on how to fill in gaps in the existing Conceptual Framework. For example, it supports the IASB’s preliminary views that: (a) the definitions of an ‘asset’ and a ‘liability’ should be amended to focus on economic resources and obligations, rather than inflows and outflows (respectively) of economic benefits that each economic resource or obligation may generate; (b) an ‘economic resource’ should be defined as “a right, or other source of value, that is capable of producing economic benefits” (paragraph 3.4 of the DP), which would confirm a shift away from traditional notions of accounting for physical objects and toward accounting for different rights composing economic resources. This shift should be particularly helpful over time in addressing derecognition of components of assets (e.g. assets); (c) the Conceptual Framework should not retain the recognition criterion that an asset or a liability must have a cost or value that can be measured with reliability; (d) the Conceptual Framework should include derecognition criteria for assets and liabilities, and that these criteria should be neutral (i.e. symmetrical with the recognition criteria); and (e) a ‘strict obligation approach’ should be taken to distinguishing liabilities and equity, including classifying as liabilities only present obligations to transfer economic resources. 4 The AASB also supports the IASB’s intention not to fundamentally reconsider Chapters 1 and 3 of the Conceptual Framework for the reasons given in paragraph 9.2 of the DP. In particular, the AASB: (a) considers it would be unnecessary and inappropriate to amend Chapter 1 to give greater emphasis to stewardship; (b) considers it would be inappropriate to reintroduce the qualitative characteristic of reliability to Chapter 3; and (c) would strongly disagree with reintroducing the qualitative characteristic of prudence to Chapter 3. Serious concerns financial
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