Conceptual Framework for

Financial Reporting
(FAR.2640)

R. R. Ocampo
Conceptual Framework Versions

1989 – Framework for the Preparation and

Presentation of Financial Statements

2010 – The Conceptual Framework for

Financial Reporting

2018 – Conceptual Framework for Financial

Reporting
2018 Conceptual Framework - Contents
New Conceptual Framework at a Glance

Presentation of Peter Clark, Technical Director, IASB : IFRS Congress 2017 in Berlin
Faithful Representation

O cOmplete

N Neutral

E Error free
Enhancing
Qualitative Characteristics

T Timeliness

V Verifiability

U Understandability

Comparability
C
Qualitative Characteristics

R Relevance

F Faithful representation

T Timeliness

V Verifiability

U Understandability

C Comparability
Prudence, Stewardship and
Substance Over Form
in the Conceptual Framework

1989 2010 2018

Framework Framework Framework

Included an No explicit Re-introduced

explicit reference an explicit
reference reference and
clarified
Presentation of Peter Clark, Technical Director, IASB : IFRS Congress 2017 in Berlin
 Parent

Subsidiary 1 Subsidiary 2

Consolidated : Parent + S1 + S2

Unconsolidated : Parent only

Combined : S1 + S2
Going Concern Assumption
• The entity is a going concern and will continue in
operation for the foreseeable future.

• The entity has neither the intention nor the need

to liquidate or curtail materially the scale of its
operations.

• If such an intention or need exists, the financial

statements may have to be prepared on a
different basis and, if so, the basis used is
disclosed.
Elements of FS
Financial Position Measurement Elements
• Assets
• Liabilities
• Equity

Financial Performance Measurement Elements

• Income
• Expenses
Recognition

Conceptual Framework Project Summary by IFRS Foundation Staff

Asset definition

Conceptual Framework Project Summary by IFRS Foundation Staff

Liability definition

Conceptual Framework Project Summary by IFRS Foundation Staff

Elements related to financial performance

Income = Increase in equity

(except owner contributions)

Expense = Decrease in equity

(except owner distributions)
Revised Conceptual Framework Webcast Slides by IFRS Foundation Staff
Presentation of Peter Clark, Technical Director, IASB : IFRS Congress 2017 in Berlin
Presentation of Peter Clark, Technical Director, IASB : IFRS Congress 2017 in Berlin
Financial Performance Computation
Income = Increase
Transaction in equity
approach
(except owner contributions)
Income P xx
Expense
Expenses= Decrease in equity ( xx)
(except
Comprehensive owner
income distributions)
(loss) P xx(xx)

Answer No. 60
Capital maintenance approach
is letter A
Net assets, end. P P11M
xx
Net assets, beg. (( xx)
7M)
Net inc. (dec.) in equity xx(xx)
4M
Contributions from owners (( xx)
3M)
Distributions to owners xx
2.5M
Comprehensive income (loss) PP3.5M
xx(xx)
2018 Conceptual Framework - Contents
DIY Drill Answers
1. D
2. D
3. D
4. A
5. A
6. D
7. A
8. C
9. C
10. D
11. B
12. D
13. D
14. D
15. D
 End 