ASBJ publishes its Short Paper Series No.2 “Recognition Criteria in the Conceptual Framework”

12 November 2015

The ASBJ publishes its Short Paper Series No.2 titled, “Recognition Criteria in the Conceptual Framework” with a view to making a contribution to global debate about the recognition criteria in Conceptual Framework of IFRSs. The ASBJ also submits the paper to the IASB for use of the discussion during the meeting of Accounting Standards Advisory Forum scheduled in December 2015.

As for the needs for the probability criterion in the Conceptual Framework, the ASBJ concludes in this paper that a robust description would be necessary. At the same time, however, the ASBJ does not think that the probability criterion is always necessary. Based on its analysis, the ASBJ proposes that:

• For recognition of an asset or a liability created from a right or an obligation that arises from ‘transactions’, the probability criterion is unnecessary.
• For recognition of an asset or a liability (that is, an item) or a group of assets and/or liabilities (that is, a group of items) created from a right or an obligation (or rights and/or obligations) that arises from ‘other events’, the probability criterion is necessary.

The ASBJ hopes that its analysis and proposal in this paper will contribute to the IASB’s work on the improvement of the Conceptual Framework.

Attachment: The ASBJ’s Short Paper Series No.2 “Recognition Criteria in the Conceptual Framework”