PROJECT UPDATE

Conceptual Framework: Recognition and Derecognition

Last updated on July 21, 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. The new FASB framework will build on the existing framework.

Background:

Recognition concepts are currently set forth in FASB Concepts Statement No.5, Recognition and Measurement in Financial Statements of Business Enterprises. The Board concluded that the discussion of recognition could be further developed and improved with the objective of providing a foundation for future standards for business and not-for-profit entities. Concepts Statement 5 did not explicitly address the issue of derecognition. The Board decided to develop concepts to address this deficiency.

Exposure Draft:

There are no exposure documents at this time.

There are no materials or documents for this section at this time.

Decisions Reached at Last Meeting (July 20, 2022):


Agenda Decision

The Board decided to begin initial deliberations on the recognition and derecognition phase of the Conceptual Framework project.

Recognition Criteria

The Board decided that all of the following are fundamental recognition criteria:

  1. Definitions—The item meets the definition of an element of financial statements.
  2. Measurability—The item is measurable and has a relevant measurement attribute.
  3. Faithful Representation—The item can be depicted and measured with faithful representation.
Derecognition

The Board decided that an item that no longer meets a recognition criterion should be derecognized from financial statements.

Permission to Ballot

The Board directed the staff to draft proposed Chapter 5, Recognition and Derecognition, of Concepts Statement 8 for vote by written ballot.

Comment Period

The Board decided on a 90-day comment period for proposed Chapter 5 and proposed Chapter 2, The Reporting Entity.

The Board meeting minutes, handouts, and videos are provided for the information and convenience of constituents who want to follow the Board’s deliberations. All of the conclusions reported are tentative and may be changed at future Board meetings. Decisions become final only after a formal written ballot to issue a final standard.

The following are links to the minutes for each meeting.  To view Board meetings and handouts from the past 90 days, click here.
 
July 20, 2022* Board Meeting—The Board decided on a comment period for the proposed Chapter.The Board began initial deliberations on the recognition and derecognition phase of the Conceptual Framework project and decided on a comment period for the proposed Chapter.

The Board directed the staff to draft proposed Chapter 5, Recognition and Derecognition, of Concepts Statement 8 for vote by written ballot.

Jill Switter
Senior Project Manager
jmswitter@fasb.org

Jim Leisenring
Senior Advisor
jjleisenring@fasb.org

Cassie Mongold
Post-Doctoral Fellow
cmongold@fasb.org

Dylan Ehrnst
Postgraduate Technical Assistant
dehrnst@fasb.org

Charley Heyd
Postgraduate Technical Assistant
cheyd@fasb.org

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.
 

×
×