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The Bulletin is published to help form European views that are influential in the debate on the IFRS Conceptual Framework.
EFRAG is running this public consultation in parallel with its public consultation on the IASB ED Conceptual Framework for Financial Reporting.
The ED includes a presumption that all items of income and expense should be included in profit or loss, however, it considers that in some cases different measurement bases might have to be selected for the statement of financial position and the statement of profit or loss. In these cases the IASB may decide that items should be reported in other comprehensive income (OCI).
The ED lists some factors to consider when selecting measurement bases, but does not provide much guidance on how the measurement bases might be selected.
EFRAG considers that the final Conceptual Framework should include more guidance on when it would enhance the relevance of profit or loss to include changes in net assets in OCI instead of in profit or loss and on the principles relating to the timing of recycling. This paper is an attempt to contribute to helping the IASB fill the void that is found in the ED on this issue.
In the Bulletin Profit or loss versus OCI, EFRAG explores how to articulate the necessary guidance reflecting the role of the business model in the selection of measurement bases.
Comments on the Bulletin are requested by 26 October 2015.