In the 2015 Exposure Draft on the Conceptual Framework for Financial Reporting (the Conceptual Framework), the accounting model is built on the definitions and principles for recognition of assets and liabilities.

The understandability and consistent application of these definitions and principles are crucial.

However, it appears that standard setters have interpreted the existing definitions differently for many years and the result is that the Conceptual Framework (2010) is inconsistent with many existing IFRS Standards.

Required:

(i) Discuss and contrast the criteria for recognition of assets and liabilities in financial statements as set out in the current Conceptual Framework (2010) and the 2015 Exposure Draft on the Conceptual Framework. (7 marks)