Will the changes proposed to the conceptual framework's definitions and recognition criteria provide a better basis for IASB standard setting?

Arjan Brouwer*, Martin Hoogendoorn, Ewout Naarding

*Corresponding author for this work

Research output: Contribution to JournalArticleAcademicpeer-review


In this paper we evaluate the International Accounting Standards Board's (IASB) efforts, in a discussion paper (DP) of 2013, to develop a new conceptual framework (CF) in the light of its stated ambition to establish a robust and consistent basis for future standard setting, thereby guiding standard setting decisions in complex and controversial areas. We investigate the impact of the definitions and recognition criteria for assets and liabilities in the existing CF and the DP. We conclude that, in areas where standards have diverged from the CF in the past, that is, not consistently applying probability thresholds, the DP supports the existing standards by removing those thresholds. Furthermore, the DP includes the more judgemental criteria of relevance and faithful representation to determine whether an item should be recognised as an asset or liability. This would justify those existing standards which currently do not recognise items that meet the (current and revised) definitions of asset or liability. Altogether, we conclude that the development of IFRSs will continue to be the outcome of professional debate, negotiation, consensus seeking and political influence. We therefore recommend that additional measures should be taken by the IASB to ensure coherence in the development and application of standards after implementation of a new CF.

Original languageEnglish
Pages (from-to)547-571
Number of pages25
JournalAccounting and Business Research
Issue number5
Publication statusPublished - 29 Jul 2015
Externally publishedYes


  • assets
  • balance sheet approach
  • conceptual framework
  • IFRS
  • liabilities

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