Staff at the International Accounting Standards Board (IASB) are expecting the board’s new Conceptual Framework to have little impact on preparers reporting under International Financial Reporting Standards (IFRS).

The staff told a 15 November board meeting that this was because “few preparers develop accounting policies by reference to the framework”.

Staff explained in a meeting handout that most transactions were covered by existing IFRSs.

In addition, IAS 8 guides preparers to alternative sources.

Further, staff said preparers were often exempted from applying the requirement in paragraph 11 to apply the requirements of the framework.

The project to update the board’s conceptual framework has become something of a political hot potato in recent years.

Many UK long-term investors have demanded the IASB reintroduce the concept of prudence into the framework.

These investors believe a more conservative bias in accounting could serve as a brake on management exuberance. 

IASB staff also told the 15 November meeting that, in their assessment, the requirements of the updated framework were in many respects identical to the existing framework.

The staff analysis was based on feedback received from 29 preparers.

Meanwhile, staff at the IASB have analysed performance measures used in the press releases of 25 companies that report under IFRS standards.

They found that performance measures fell into three broad categories: those specified in IFRS, those necessary for compliance with IFRS and non-IFRS information.

Within the categories of non-IFRS information, some might simply enhance IFRS financial information, while others might be based on information that does not comply with IFRSs requirements.

There is growing use of non-standard information in financial reports to communicate with interested parties.

A June 2016 feedback statement published by the IFRS Foundation Trustees found that a minority of respondents made unprompted calls for the IASB to address the use of alternative performance measures.

The debate comes as the board gears up to issue a discussion paper on ‘Principles of Disclosure’ in the next few months.

That discussion paper could include guidance on the use of performance measures.

Eventually, the proposals could mean preparers are required to disclose additional sub-totals such as Earnings Before Interest & Tax (EBIT) based on IFRS-compliant information.

In a speech earlier this month, IASB chairman Hans Hoogervorst said: “We will be looking at possibilities of defining commonly used subtotals in the income statement, such as operating EBIT.

“We might look at creating more disciplined ways for companies to adjust their earnings for infrequently occurring components of income.

“We also need to do more work on electronic reporting, as financial information is increasingly being consumed electronically.”

In other news, consultants Lane Clark & Peacock have warned that a drafting change to proposed amendments to the committee’s IFRIC 14 asset-ceiling guidance could adversely affect a large number of preparers.

The warning came in a recently posted webcast.

According to the LCP experts, revised drafting in paragraph 71 of Agenda Paper 3A for the September IFRS IC meeting could force schemes to recognise an additional liability where trustees have the power to mount a buyout.

The warning comes as preparers face a perfect storm of low interest rates and lagging yields.

LCP has advised preparers to revisit how a DB pension obligation is allocated within a group of companies.

It also suggests sponsors revisit key assumptions such as discount rates, as well as less obvious assumptions such as retirement rates that, taken together, can have a material impact on the size of a pension liability.

Lastly, the IASB has posted an update to its workplan following the conclusion of the latest agenda consultation project.

In relation to pensions, the board confirmed that it would add a limited-scope feasibility study into post-employment benefits that rely on an asset return.

The board confirmed it would not look at other aspects of pensions accounting.