IMA Financial Reporting Committee comment letter on Proposed Statement of Financial Accounting Concepts (SFAC) Concepts Statement 8Conceptual Framework for Financial Reporting Chapter 4 Elements of Financial Statements

The IMA Financial Reporting Committee (FRC or Committee) issued a comment letter in response to the FASB’s exposure draft, Proposed Statement of Financial Accounting Concepts (SFAC), Concepts Statement 8—Conceptual Framework for Financial Reporting, Chapter 4: Elements of Financial Statements. This proposed statement, if adopted, would modify the language in the Conceptual Framework for Financial Reporting under US GAAP. The stated objective of making these proposed amendments is to facilitate the Board’s standard-setting. While the FRC understands this objective, overall, it believes that it would be beneficial for the Board to demonstrate how it might deliberate differently under the amended Framework than under the current conceptual statements. More specifically, the Committee addresses proposed changes regarding the definition of an asset, the definition of a liability, and the characterization of items as revenue and expenses versus gains and losses.