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FEE strongly supports the Board’s intention to finalise the Conceptual Framework with a high priority, as the development of the existing standards and many proposals for future standards depend on its finalisation. This would also help the Board to streamline its standard setting activity in the future, whether setting new standards on public sector specific issues or updating IFRS converged standards.
FEE also supports the Board’s intention to maintain the alignment of IPSASs with IFRSs on matters which are common to both to private and public sectors. However, as rightly pointed out in the Consultation, the development of the Conceptual Framework should not be an IFRS convergence project and therefore not an interpretation of the application of the IASB Conceptual Framework to the public sector.
FEE agrees with most of the elements proposed in the ED, however, FEE does not believe that the two proposed measurement models, the fair value and deprival model, or any other models should be placed in the Conceptual Framework but would be better addressed on a case by case basis at standard level.
FEE does not think that it would be appropriate for the Conceptual Framework to suggest supplementary disclosures regarding operating capacity and financial capacity where the historical cost measurement basis is used. The Conceptual Framework should remain principle based and therefore avoid providing detailed guidance as how to apply measurement bases. Any supplementary disclosures that are considered necessary would be better addressed at standards level.
FEE does not support the proposal to identify and recognise deferred inflows and outflows as separate elements at the conceptual framework level. Instead, FEE believes that any appropriate deferral of revenue recognition and expenses recognition can be achieved using the definitions of assets, liabilities, expenses and revenue alone, by further consideration of the control criteria for these transactions.
Comment letter on measurement of assets and liabilities in financial statements
Comment letter on elements and recognition in financial statements