Dear Mister Tweedie,
I think it is very ambitious to create a financial framework that is worldwide accepted and used as the only framework. The IASB May 2008 exposure draft is a remarkable piece of consistent thinking through the basics of financial reporting. My remarks should be seen in this light with the ambition to apply capital provider focus and efficient processes. Scrap waste, processes and procedures that do not add value to capital providers (OB 5- OB 7).
Comments on the IASB conceptual framework exposure draft May 2008
Built up goodwill
Built up goodwill is in financial reports currently not valuated and not included in the value of the economic entity. I am not arguing that it should be reported, this would lead to very high variations in the valuation. However built up goodwill can represent most of the value of the economic entity. Take for example the stock exchange value of companies or the net present value of an economic entity. At a point in time this is the value of the company includes this built up goodwill. However it is never represented in financial presentations. So if you do not include an item that may well represent most of the economic value why would you take such an effort in faithful representing other post faithfully. Obligations to pension funds, valuation of equipment and property, it often takes an enormous, expensive, effort to faithfully represent. To what extent is this useful for the capital providers if a very important and very defining item, built up goodwill not represented in the financial report?(See paragraphs QC2-QC15)
Cash flow
What is of importance when you consider is the cash flow especially of the coming years. The historical financial figures give a basis for indicating ...