IMA FRC comment letter response to FASB’s proposed Concept Statement on Measurement Financial Reporting

April 8, 2024

IMA’s Financial Reporting Committee (FRC or Committee) issued a letter to share its comments on FASB’s proposed Statement of Financial Accounting Concepts, Concepts Statement No. 8, Conceptual Framework for Financial Reporting — Chapter 6: Measurement (Proposal).

Overall, the FRC expressed its support of the Board’s continued efforts to update and improve its Conceptual Framework for Financial Reporting (Framework) so it reflects the views of the Board and is most helpful for the Board’s use in future standard setting. The FRC continues to believe the Framework provides the Board, both current and future iterations, with critical cornerstones to draw upon for decision-making at the standards level. It also acknowledged that the Framework can be used to help preparers understand existing standards and, in the rare cases when there is no guidance, help them develop an appropriate accounting policy.

The FRC did express several concerns, however:

• Despite its support for the core principle, the FRC was unsure whether the Proposal outlines and approach that is understandable and operable for its intended purpose. Specifically, the FRC questioned how the measurement systems discussed in the proposal will be operationalized in the standard-setting process.
• The FRC also question how the Proposals would measure debt issued by a reporting entity or interest rate swap in a liability position
• The FRC is concerned that the specificity and detailed nature of the Proposal may create confusion and cause operational challenges.