Conceptual Framework – Reporting Entity


The objective of this joint project of the International Accounting Standards Board and the Financial Accounting Standards Board (the Boards) is to develop a common conceptual framework that is both complete and internally consistent.

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Developing an improved and converged global financial reporting framework is a high priority to the AcSB and critical to developing and harmonizing accounting standards internationally. As part of its commitment to developing accounting standards internationally:
  • AcSB and its committees discuss and provide comments on documents issued for comment.
  • Chair and Senior staff participate in a group with other national standard setters to review the Conceptual Framework deliberations and documents issued for comment and to provide the Boards feedback from a not-for-profit perspective. The Boards are currently developing the improved framework for entities operating for profit and in a later phase, plan to consider the applicability of the proposed framework from a not-for-profit perspective.
  • AcSB staff members have been actively involved in this project as part of an international team.



On July 14, 2010, AcSB staff submitted a comment letter responding to the IASB’s Exposure Draft. The letter supports the IASB’s proposed definition of a reporting entity. The letter recommends that the concept of control be explicitly incorporated within the definition to identify the boundaries that define a reporting entity. Also, the letter recommends that the nature of the entity’s business activities demonstrate the unit-of-account to be used to account for entities the reporting entity controls. The AcSB staff letter posted by the IASB is available here.

In light of comments received, the IASB and the FASB have decided they need more time to finalize the chapter than initially anticipated. The Boards have amended their timetable for completing this project in order to complete more urgent projects. Therefore, the Boards do not expect to continue their deliberations until those urgent projects are completed.

The AcSB will incorporate the new chapter into Part I of the Handbook shortly after it is issued by the IASB.

In April 2010, the AcSB issued an Exposure Draft that corresponds to the proposals in the IASB Exposure Draft “Conceptual Framework for Financial Reporting: The Reporting Entity.” These proposals are to develop a reporting entity concept based on existing practice.


Disclaimer: This project summary has been prepared for information purposes only. Decisions reported are tentative and reflect only the current status of discussions on this project, which may change after further Board deliberations. Decisions to publish Handbook material are final only after a formal ballot process.