Question

What are some of the challenges to the IASB in developing a conceptual framework?

Short answer

Some of the challenges faced by the International Accounting Standards Board (IASB) in developing a conceptual framework include:

• Work is being accomplished on the framework as a whole; the work cannot be issued unless it’s complete.
• There is the presence of uncertainty and difference in opinion in the context of treatment and disclosure issues on an element of the framework.

Step-by-step solution

Meaning of Conceptual Framework

A conceptual framework is a collection of fundamentals as well as objectives formulated by the International Accounting Standards Board (IASB) to establish conformity in interpretation across different accounting procedures.

Some of the challenges faced by IASB in developing a conceptual framework

The International Accounting Standards Framework (IASB) helps IASB in advancing future International Financial Reporting Standards (IFRS) and in evaluating the existing International Accounting Standards (IAS). However, there are also some difficulties faced by International Accounting Standards Board (IASB). Which include:

• Thorough research is needed, and agreement of all the industry members to the treatment or system for functioning of a conceptual framework is required.

• The framework will not entertain the post dilemma issues and the disclosure needs.

• While drafting the framework, a thorough inspection is needed, and the result of the issues on the industry as a whole, as well as invariability of accounts with the International Generally Accepted Accounting Principles (IGAAP).