IASB October 2006
What is an element? What is its significance?
At this meeting, the Board discussed the meaning of elements and the significance of an element as part of its deliberations for Phase B Elements and Recognition.
The Board tentatively concluded that elements should:
(a) continue to focus on the economic things (resources and claims) and changes in them that pertain to a particular entity. Those things and changes in them are also called ‘stocks’ and ‘flows’.
(b) focus on the most basic of the real-world economic phenomena that pertain to an entity. Distinctions that are made for the purposes of financial statement display or presentation go beyond the notion of basic elements.
The FASB had also discussed these topics and reached similar conclusions.
Other discussions
The staff also briefed the Board on matters that were to be discussed at the joint meeting with the FASB. They included the process for finalising the framework and the status of and near-term plans for the project.
IASB and FASB Joint Meeting October 2006
At the joint meeting, the boards discussed:
- procedures for finalising the common conceptual framework
- project status and near-term plans, with a focus on the elements and recognition phase
- measurement bases in an introduction to Milestone I of Phase C Measurement.
The boards agreed that each board, within the context of its current GAAP hierarchy, will finalise the common framework as parts (chapters) are completed and noted that later parts may include consequential amendments to earlier parts. The boards noted that the decision of how to finalise the joint framework may need to be readdressed when the boards discuss the placement of the framework within the IASB and FASB hierarchies.
On Phase B Elements and Recognition, the boards supported the staff’s plan to consult on an informal basis selected technical experts, as well as the boards’ advisory committees, about the definition of an asset while continuing work on remaining milestones within Phase B. The boards were also updated on the status and near-term plans for the framework project.
The boards discussed an inventory of current and proposed measurement bases for assets and liabilities, including new or revised terminology and definitions that might alleviate problems of communicating about measurement bases during the conceptual framework project. The boards generally supported the staff’s work, but made no decisions about the inventory or terminology. The staff will continue to work on the inventory and terminology. Those items also will be included in the measurement round-table discussions scheduled for January and February 2007. After the round-tables and further refinement by the staff, the material discussed at the joint meeting will be taken to the boards again for their decisions.