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FASB ED for Conceptual Framework for Financial Reporting Concept

March 20, 2024 

Hillary Salo 
Technical Director, FASB 
801Main Avenue 
PO Box 5116 
Norwalk, CT 06856 

File Reference No. 2023-ED700 
Sent via email to [email protected]  

Dear Ms. Salo: 

The Virginia Society of CPAs (VSCPA) Accounting & Auditing Advisory Committee has reviewed the Proposed Statement of Financial Accounting Concepts Statement 8, Conceptual Framework for Financial  Reporting (ED), issued by the Financial Accounting Standards Board (FASB).The VSCPA is the leading professional association in Virginia dedicated to enhancing the success of all CPAs and their profession by communicating information and vision, promoting professionalism, and advocating members’ interests. The VSCPA membership consists of nearly 13,000 individual members who actively work in public accounting, private industry, government, and education. 

The VSCPA Committee is supportive of updates to the Concept Statement to improve a uniform measurement framework on which to base authoritative guidance in order to promote consistency in application. The Committee is also generally in agreement with the proposed changes. Our detailed comments on the questions are discussed below. 

The Committee believes that additional discussion of the qualitative aspects of the entry and exit price systems and a summary of each measurement basis would improve the consistency, rationale, and implications of the ED. Specifically, including a section similar to the International Accounting Standards Board’s (IASB) Conceptual Framework for Financial Reporting, Chapter 6 – Measurement, would enhance the implications of the ED on specific authoritative standards. Please refer to Table 6.1 of the IASB Conceptual Framework.  

Question 1: Do you agree with the proposed underlying premise that to have predictive value the reported amounts of assets should not be more than what is recoverable, by disposition or use, and the reported amounts of liabilities should not be less than what is settleable, by transfer or satisfaction? Please explain why or why not.  

  • Yes. The premise aligns with the fundamental characteristic of providing a faithful representation of the financial statement amounts as the values listed above are more objective. 

Question 2: Do you agree that measurement is anchored in prices, as described in paragraphs M5 and M6? Do you also agree that transactions and other events and circumstances affecting the entity should ultimately be measured in prices (entry prices and exit prices)? Please explain why or why not.  

  • Yes. The general economic and business conventions of entities reporting financial information is rooted in commerce and therefore adheres to commonly accepted pricing systems and standards. We also agree with the Board that transactions involving special circumstances are best determined at the standards level.  

Question 3: Do you agree with the proposed description and features of the entry price system as described in paragraphs M10–M14? Please explain why or why not.  

  • Yes. This is an accurate representation of exchange transactions and meets the principles of matching expense/revenue to the use or receipt of the underlying assets or liabilities. 

Question 4: Do you agree with the proposed description and features of the exit price system as described in paragraphs M15–M19? Please explain why or why not. 

  • Yes. Paragraphs M15-M19 present a comprehensive and reasonable description of the attributes of an exit price system. The proposed description and features of the exit price system capture current expectations about the future inflows associated with the asset and the future outflows associated with the liability from the perspective of market participants.  

Question 5: Do you agree that the entry price and exit price systems, as explained in paragraph M7, are the only two relevant and representationally faithful measurement systems that would meet the objective of general purpose financial reporting? Please explain why or why not.  

  • Yes. The two systems address the majority of transactions of reporting entities and will provide both relevant and reliable information to users. Further, the measurement systems are easily understood and can readily be applied to authoritative guidance for specific areas. 

Question 6: Do you agree that the entry price system would likely result in more relevant measurements when entities have unique exit prices for the same asset or liability? Please explain why or why not. (See paragraph M31.)  

  • Generally agree. An entry price measurement system would provide a better way to incorporate future cash flows and provide context of the use of the asset or liability over time.  

Question 7: Do you agree that the exit price system (specifically, an exit price that incorporates market participant cash flows) would likely result in more relevant measurements when entities have the same exit price for the same asset or liability? Please explain why or why not. (See paragraph M32.)  

  • Yes. Exit prices generally incorporate appropriate cash flow information. The exit price system supports financial statement consistency, which is a key aspect of comparability.  

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The VSCPA appreciates the opportunity to respond to this update. Please direct any questions or concerns to VSCPA Vice President, Advocacy & Pipeline Emily Walker, CAE, at [email protected] or (804) 612- 9428.  

Sincerely,   

Zach Borgerding, CPA  
Chair 2023-2024  
VSCPA Accounting & Auditing Advisory Committee 


VSCPA Accounting & Auditing Advisory Committee 2023-2024 

Zach Borgerding, CPA — Chair 
Michael Phillips, CPA — Vice Chair 
David Allen, CPA  
Scott Davis, CPA  
Joshua Keene, CPA  
Nick Kinsler, CPA  
Daniel Martin, CPA 
Brian Minor, CPA  
Elisa Obillo, CPA 
Krisia Raya, CPA  
Charles Valadez, CPA  
Natalya Yashina, CPA