1. The Conceptual Framework Project
IAAER International Research Conference for Accounting Educators
September 2005
Katherine Schipper, Financial Accounting Standards Board
The views expressed in this presentation are my own, and do not represent positions of the Financial Accounting Standards Board. Positions of the Financial Accounting Standards Board are arrived at only after extensive due process and deliberation.

2. Recent tentative decisions
Objectives of financial reporting
Reporting entity perspective
Financial reporting aimed at external users who cannot prescribe the information they receive
Provision of decision useful information, for purposes of capital allocation
Investors and (some) creditors, not regulators or taxing authorities
Focus on liquidity and solvency but not to the exclusion of other decision useful information
Stewardship is not a separate objective
Information that is useful for capital allocation may also be useful/used for stewardship

3. Recent tentative decisions
Qualitative characteristics
Relevance
Predictive value
Faithful representation replaces reliability
Neutrality
Verifiable
Recent debate: should depictions that are do not faithfully represent underlying economic constructs be included, with proper disclosure of this property?
Comparability
Less important than relevance
Understandability
Materiality

4. Recurring issues in standard setting
Control
Definition
Application to asset versus application to entity
Liability
What is past event/transaction that gives rise to a liability?
How are liabilities distinguished from equity?
Settlement obligation
Nature of relationship (owner versus nonowner)
Effects of uncertainty
What does/should "probable" mean?
How should probable outcomes (or expectations) affect accounting recognition and measurement?
Recognition and derecognition criteria

5. Recurring issues in standard setting
Measurement
Definitions of measurement attributes
Desirable characteristics of accounting measurement attributes
Criteria for choosing among measurement attributes
Unit of account
Combining items (or contracts) for accounting purposes
Separating contracts or arrangements for accounting purposes
Gross versus net display
Reporting entity
Definition
Consolidation: purpose(s) and criteria