IASB amends IAS 1 to improve IFRS disclosure

The International Accounting Standards Board (IASB) has released an Exposure Draft (ED) outlining proposed amendments to IAS 1, Presentation of Financial Statements

The amendments are part of the standard setter’s initiative to review and improve the disclosure requirements in existing International Financial Reporting Standards (IFRS) as well as looking for ways to improve disclosures.

The Exposure Draft proposes narrow-focus clarifying amendments to IAS 1 to address some of the concerns expressed about existing presentation and disclosure requirements, and to ensure entities are able to use judgment when preparing their financial statements. The amendments respond to concerns that the wording of some of the requirements in IAS 1 may have prevented the use of such judgment.

The proposed amendments relate to:

  • materiality and aggregation (para 29–31, BC1–8);
  • statement of financial position and statement of profit or loss and other comprehensive income (para 54, 55A, 82, 85A, 85B, BC9–BC15);
  • notes structure (para 113–117, BC16–BC19); and
  • disclosure of accounting policies (para 120, BC20–BC22).

IASB is also reviewing the illustration of income tax accounting policy under IAS 1 and foreign currency examples as there has been criticism that ‘it was not clear, from the example, what aspect of the entity’s operations would make a user of financial statements expect an accounting policy on income taxes to be disclosed’. The proposal is that these references will be deleted when the amendment is released later this year, subject to consultation.

Hans Hoogervorst, chairman of the IASB said: ‘These proposals form a small part of our efforts to encourage preparers, auditors and regulators away from a ticking-the-box mentality towards disclosures.

‘These proposals are designed to help change behaviour, by emphasising the importance of comparability and clarity in presenting financial reports.'

The deadline for comment is 23 July 2014.

The exposure draft is available at http://www.ifrs.org/Current-Projects/IASB-Projects/Amendments-to-IAS-1/ED-March-2014/Documents/ED-Disclosure-Initiative-Amendments-IAS-1-March-2014.pdf

 

Diane Tan |Content manager - current awareness, CCH

Diane Tan is content manager, current awareness at CCH, Wolters Kluwer UK www.cch.co.uk...

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