Last updated on June 17, 2022. Please refer to the Current Technical Plan for information about the expected release dates of exposure documents and final standards.
(Sections updated on the date above are indicated with an asterisk *)
Objective:The objective of the Conceptual Framework project is to develop an improved Conceptual Framework that provides a sound foundation for developing future accounting standards. Such a framework is essential to fulfilling the Board’s goal of developing standards that are principles based, internally consistent, and that lead to financial reporting that provides the information capital providers need to make decisions in their capacity as capital providers.
Background:While the objective of general purpose financial reporting references the term reporting entity, the Conceptual Framework does not describe a reporting entity. Additionally, the term reporting entity is used multiple times in existing Concepts Statements, and paragraph OB1 in Chapter 1, The Objective of General Purpose Financial Reporting, of FASB Concepts Statement No. 8, Conceptual Framework for Financial Reporting, references a concept of the reporting entity. Because the Conceptual Framework is intended to be a coherent system of interrelated objectives and fundamental concepts, there is a need to develop a concept of the reporting entity.
Exposure Draft:There are no exposure documents at this time.
Decisions Reached at Last Meeting (June 15, 2022):
The Board decided to begin initial deliberations on the reporting entity phase of the Conceptual Framework project. The Board deliberated substantive issues that were identified by comment letter respondents to the 2010 proposed Concepts Statement, Conceptual Framework for Financial Reporting: The Reporting Entity.
The Board made the following decisions:
Parent-Only Financial Statements
The Board decided that parent-only financial statements depicting a circumscribed area of economic activities in which a parent-subsidiary relationship exists do not represent a full set of financial statements as defined in Chapter 7, Presentation, of FASB Concepts Statement No. 8, Conceptual Framework for Financial Reporting, and, therefore, are not sufficient to meet the objective of general purpose financial reporting.
Portion of an Entity
The Board decided that a portion of an entity can represent a reporting entity if the portion of the entity is a circumscribed area of economic activities and is able to prepare general purpose financial reports that faithfully represent the economic activities of its circumscribed area.
Combined Financial Statements
The Board decided that combined financial statements depicting common control, including circumstances in which a parent-subsidiary relationship does not exist, can faithfully represent a circumscribed area of economic activities and, therefore, are consistent with the objective of general purpose financial reporting.
Permission to Ballot
The Board directed the staff to draft proposed Chapter 2, The Reporting Entity, of Concepts Statement 8 for vote by written ballot.
The following are links to the minutes for each meeting. To view Board meetings and handouts from the past 90 days, click here.
|June 15, 2022*||Board Meeting—The Board began initial deliberations on the reporting entity phase of the Conceptual Framework project.|
Senior Project Manager
Postgraduate Technical Assistant
Postgraduate Technical Assistant
The staff has prepared this summary for information purposes only. Any Board decisions are tentative and do not change current accounting. Official positions of the FASB are determined only after extensive due process and deliberations.