30 July 2013

FEE: Comment letter on IPSASB Conceptual Framework ED 4

FEE agrees with the concepts set out in the ED and welcomes the IPSASB’s approach to information selection for the presentation of information in General Purpose Financial Reports of public sector entities.

FEE also supports the Board's intention to maintain the alignment of IPSASs with IFRSs on matters which are common to both private and public sectors. However, as rightly pointed out by the Board, the development of the Conceptual Framework should not be an IFRS convergence project.

FEE agrees with the concepts that are set out in the ED for the presentation of information in the GPFRs. In particular:

• FEE agrees with the proposed descriptions of "presentation", "display" and "disclosure" and the relationships between them in Section 1.
• FEE agrees with the identification of three presentation decisions (selection, location and organisation) in Section 1.
• FEE agrees with the proposed approach to making presentation decisions in Section 1.
• FEE agrees with the description of information selection in Section 2, both in the financial statements and in other GPFRs.
• FEE agrees with the description of information location in Section 3.
• FEE agrees with the description of information organisation in Section 4.
• FEE considers that the ED contains sufficient detail on concepts applicable to presentation in GPFRs, including the financial statements, of governments and other public sector entities. FEE particularly welcomes the simplification of the concepts in the ED compared to the Consultation Paper, and the removal of the distinction between core and supporting information.

However, FEE would like to draw the Board's attention to the current trends of an increasing length and complexity of the financial statements taking place in the private sector. The information overload, particularly in the notes to the financial statements, has many times decreased the usefulness of the information, and obscured important and key disclosures from the eyes of the users.

Against the trend of ever more disclosures, there have been several attempts to address these issues whilst increasing the quality and focus of the information disclosed. For instance, the IASB has put the Conceptual Framework project back on the agenda and considers the development of a disclosure framework on its own. Therefore, FEE welcomes the IPSASB's approach to information selection, which recognises that too much information may make it difficult for users to understand the overall situation, and undermine achievement of the objectives of financial reporting. FEE also encourages the IPSASB to review the disclosures in its existing standards in the light of this approach.

Press release

Comment letter

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