Page 378 - SBR Integrated Workbook STUDENT S18-J19

Chapter 23

Revision of the Framework

2.1 The existing Framework

There are problems with the existing Framework:

 some issues are not covered

 some aspects are out of date

 some guidance is unclear.

The Board have proposed a number of changes in an Exposure Draft.

2.2 Objectives for financial reporting

In the revised Framework, the Board wish to:

 clarify that financial reporting should enable assessment of management’s
stewardship of an entity’s resources

 reintroduce the concept of prudence.

2.3 Assets and liabilities

The Board is proposing the following revised definitions of assets and liabilities:

An asset is 'a present economic resource controlled by the entity
as a result of past events' (ED/2015/3, para 4.5).

A liability is 'a present obligation of the entity to transfer an
economic resource as a result of past events' (ED/2015/3, para 4.24).

An economic resource is 'a right that has the potential of producing
economic benefits' (ED/2015/3, para 4.4).

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