How specified must a conceptual framework be?
At their joint meeting in October 2004, the IASB and the US FASB decided to add to their respective agendas a joint project to develop a common conceptual framework, based on both the existing IASB Framework and the FASB Conceptual Framework, that both Boards would use as a basis for their accounting standards.
The two boards reached the following tentative decisions about the approach to the project:
The project should initially focus on concepts applicable to business entities in the private sector. Later, the boards should consider the applicability of those concepts to other sectors, beginning with not-for-profit organisations in the private sector.
The project should be divided into phases, with the initial focus being on achieving the convergence of the frameworks and improving particular aspects of the frameworks dealing with objectives, qualitative characteristics, elements, recognition, and measurement. Furthermore, as the frameworks converge and are improved, priority should be given to addressing issues that are likely to yield benefits to the boards in the short term, that is, cross-cutting issues that affect a number of their projects for new or revised standards.
The converged framework should be in the form of a single document. It should include a summary and a basis for conclusions.
The project is being conducted in eight phases: A: Objectives and Qualitative
Characteristics (completed), Phase B: Elements and Recognition, Phase C: Measurement, Phase D: Reporting Entity, Phase E: Presentation and Disclosure, Phase F: Purpose and Status, Phase G: Application to Not-for-profit Entities, Phase H: Remaining Issues (Deloitte, http://www.iasplus.com/agenda/framework.htm, last retrieved: July 23, 2011).
In its last meeting concerning Phase C: Measurement in July 2010, the IASB discussed amongst other issues what the measurement chapter of the revised conceptual framework should accomplish. The Board was presented by staff with five alternatives with View A being the most basic specifications and each alternative thereafter, building onto the specifications of the previous alternative.
A Board member started the discussion with noting that the measurement chapter should not be neutral (view A), but should also not specify which assets and liabilities should be measured using a specific basis (view E). Most Board members were either supporting
View B (discussing the relationship between qualitative characteristics