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FASB to Update Definitions for Key Accounting Concepts

At its May 3 meeting, the Financial Accounting Standards Board (“FASB”) voted to expand efforts to update its Conceptual Framework. The decision impacts potential updates to Concepts Statement (“CON”) No. 6, Elements of Financial Statements, which provides definitions for key financial reporting concepts like assets, liabilities, and revenues.

Board members also agreed to preserve the goal of financial reporting as mentioned in CON No. 8, Conceptual Framework for Financial Reporting—Chapter 1, the Objective of General Purpose Financial Reporting. Viewed as the main characteristic of the Conceptual Framework, the chapter says that a financial reporting’s objective is to offer useful financial information for current and future investors, lenders, and creditors to help them make sound decisions.

FASB members are also working to update chapters concerning measurement and presentation.

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