Question

The International Accounting Standards Board (IASB) issued a revised Conceptual Framework (CF) for financial reporting which will become effective for preparers who develop accounting policies based on the CF on or after 1 January 2020. Noticeably, the new CF has updated the definitions of assets and liabilities as well as the corresponding recognition criteria.

a) In the new CF (the 2020 CF), recognition is appropriate if it results in both relevant and faithfully represented information about assets, liabilities, equity, income and expenses. Compare and explain the similarities and distinctions in the recognition criteria between the old and the new CF.

* Please write 500 words answer for part a) Also add the links of journal articles or any source where you find information from.

Answer 1

	OLD CF	NEW CF
ASSET	SHOULD BE CONTROLLED BY ENTITY DUE TO PAST EVENTS AND FUTURE ECONOMIC BENEFITS ARE EXPECTED	SHOULD BE CONTROLLED BY ENTITY DUE TO PAST EVENTS AND ECONOMIC RESOURCE IS RIGHT THAT HAS THE POTENTIAL TO PRODUCE ECONOMIC BENEFITS
LIABILITIES	PRESENT OBLIGATION OF ENTITY DUE TO PAST EVENTS WHICH WILL LEAD TO OUTFLOW OF ENTITY'S RESOURCES	PRESENT OBLIGATION TO TRF ECONOMIC RESOURCES OF ENTITY DUE TO PAST EVENT . OBLIGATION WHICH ENTITY CAN NOT AVOID

New framework mentions factors to be considered when selecting a measurement

New framework also describes Presentation and disclosure concepts on presentation and disclosure, including when to classify income and expenses in other comprehensive income.

new framework also provides derecognition guidance on when assets and liabilities are removed from financial statements

Source:www.ifrs.org