The Equity Theories and the IASB Conceptual Framework

Carien van Mourik

Accounting in Europe, 2014, vol. 11, issue 2, 219-233

Abstract: The International Accounting Standards Board (IASB) staff members 'recommend that the IASB confirm its view that financial statements should be presented from the perspective of the entity as a whole' [IASB (2014) Agenda Paper 10E Project - The Conceptual Framework. Reporting Entity - Perspective . London: The International Accounting Standards Board. May 2014. Available at: http://www.ifrs.org/Meetings/MeetingDocs/IASB/2014/May/AP10E-Conceptual%20 Framework.pdf (accessed 9 July 2014), para. 28], which implies adoption of the Entity Theory. This paper explains the value judgements and arguments supporting the main equity theories and their perspectives on financial performance and financial position. It identifies Residual Equity Theory, instead of Entity Theory, as the dominant equity theory in the 2010 IASB Framework and the 2013 IASB Exposure Draft. Hence, there is a discrepancy between the perspective from which the IASB thinks financial statements should be presented and the perspective actually underlying the definition, recognition and measurement of the elements of financial statements in the IASB's Framework and Exposure Draft. Finally, this paper argues for a careful reconsideration and justification of the equity theory the IASB chooses as the basis for its Conceptual Framework.

Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://hdl.handle.net/10.1080/17449480.2014.949278 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:acceur:v:11:y:2014:i:2:p:219-233

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RAIE20

DOI: 10.1080/17449480.2014.949278

Access Statistics for this article

Accounting in Europe is currently edited by Lisa Evans

More articles in Accounting in Europe from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().