Access the Investor Perspectives article written by Steve Cooper, a member of the IASB, in June 2015, entitled “A Tale of ‘Prudence’?” (https://www.ifrs.org/-/media/feature/resources-for/investors/investorperspectives/investor-perspective-jun-2015.pdf). Mr. Cooper states that two different meanings have been attributed to the term “prudence” when it is used as part of the conceptual framework of financial reporting.

Instructions

a. What two meanings does Steve Cooper describe as having been attributed to the term “prudence”? Explain each briefly.

b. Identify which meaning has been supported by the IASB in issuing a revised conceptual framework in 2018. What major arguments support the IASB’s position?