The ASBJ submits the paper regarding the linkage between financial performance and measurement for the Conceptual Framework session during the September 2016 ASAF meeting

7 September 2016

The International Accounting Standards Board (IASB) is continuing its redeliberation of issues towards the goal of finalising the Conceptual Framework in the light of feedback received on the Exposure Draft Conceptual Framework for Financial Reporting. In view of the importance of the project, the ASBJ submitted the paper titled, The Linkage between Financial Performance and Measurement to the IASB for use of the discussion during the meeting of Accounting Standards Advisory Forum scheduled in September 2016.

In this paper, the ASBJ states that considering the history of this project, the ASBJ strongly believe that the Conceptual Framework could be improved by addressing the following:

• As long as the statement of profit or loss is the primary source of information about an entity’s financial performance, the Conceptual Framework should, at a minimum, describe the fundamental characteristics that information about profit or loss should possess.
• In order to calculate profit or loss that is useful, the measurement basis should be selected appropriately from the perspective of the statement of financial position and from the perspective or the statement(s) of financial performance, respectively. The Conceptual Framework should state that the measurement basis should first be selected from the perspective of the statement of profit or loss and that such measurement basis should possess the fundamental characteristics that information about profit or loss should possess, and in doing so it is necessary to provide a linkage between profit or loss and measurement.

The ASBJ hopes that its proposal in this paper will contribute to the IASB’s work on the improvement of the Conceptual Framework.

Attachment: The ASBJ Paper “The Linkage between Financial Performance and Measurement”