How Does the Conceptual Framework from 2018 Distinguishes itself from the Conceptual Framwork from 2010 and does it Benefit the Users Information Needs Better?

Morten Frølund Hansen

Student thesis: Master thesis


In 2018, the IASB published a new version of their conceptual framework for financial reporting, which can be seen as the reference work for all the standards to come and where no standards are available. This thesis investigates which changes have been made to the conceptual framework from its previous edition from 2010, and if these changes meets the users’ information needs better than the previous implementation. Who the users of the financial report are, which information they seek and need are therefore an essential part of this thesis. The structure of the thesis is centered on a five sub-elements leading to the conclusion. Part I contains an introduction to the two accounting paradigms, the performance- and assets oriented paradigm, which is included to give the reader a brief introduction to two different ways of looking at accounts and the information they provide. Part II identify the primary users of the financial rapport, existing and potential investors, lenders and other creditors, based on the frameworks definition of the users. Furthermore, the general information needs has been identified as resource allocation, after which the primary users have been split into respectively long- and short-term investors, with lenders and other creditors as cross between the two. Short-term investors are more interested in the assessment task using prognosis, where the long-term investors are more interested in the control task through the use of the classic principal-agent-theory. Part III, present the changes of the framework, which in short, is a mixture of new initiatives, updated concepts and a deepening of certain elements and terms. Here, in particular it is important to emphasize the addition of chapter 6, which contains a guide on the selection of measurement basis and the reintroduction of the stewardship concept as some of main additions. Part IV, gives suggestions for what consequences the implementation of the new framework could have. These suggestions is made by investigating the main changes of the framework and afterwards the theory concerning the users information need to see whether they are better or worse off. In general, the re-introduction of the stewardship concept has been a substantial improvement in the process of covering the information need for the long-term investors. In the case of short-terms investors, the change in the definition of an asset is likewise a clear improvement as it now allows to include more assets in their raw data. Part V, gives a presentation of the primary users' attitudes and opinions to the changes of the conceptual framework. The superiors has an accepting mind towards the changes, however there is disagreement among the respondents about the scope, content and specific elements of the proposals made. Based on the material reviewed, it can be found that the implementation of the new conceptual framework will take into account the primary users 'information needs, as a whole, better than the previous edition in 2010. These findings are concluded based on the theory of users' information needs and their feedback

EducationsMSc in Auditing, (Graduate Programme) Final Thesis
Publication date2019
Number of pages71