Abstract

The International Accounting Standard Board (IASB) and the US Financial Accounting Standard Board (FASB) launched a collaborative and comprehensive project to develop a common Conceptual Framework (CF) in 2004. On July 6, 2006, both published their Discussion Paper Preliminary Views on an improved Conceptual Framework for Financial Reporting: The Objective of Financial Reporting and Qualitative Characteristics of Decision-useful Financial Reporting Information. However, amid the financial crisis in 2008, the IASB and FASB postponed and eventually terminated the convergence project. This study introduces the background and main content of the joint CF, focusing on a series of key issues. Should the IASB and FASB cease their cooperative research on the converged CF? Should it be exclusive for the IASB and FASB only to jointly develop a converged CF? Should the accountability concept be subordinate to decision-usefulness? Finally, the study suggests reactivating the converged CF project by involving other economies at different levels of development in the formulation process.

Keywords:Conceptual framework of financial reporting; Common conceptual framework; Objective of financial reporting; Qualitative characteristics of useful financial information