The International Accounting Standards Board (IASB) is proposing a new approach to developing disclosure requirements in International Financial Reporting Standards (IFRS) and is inviting preparers of financial statements to participate in the fieldwork to test the ideas
The IASB published the exposure draft on Disclosure Requirements in IFRS Standards—A Pilot Approach in March 2021. The standard setter is now seeking to gain feedback on the proposed new approach to developing disclosure requirements in IFRS Standards and specific new disclosure requirements for IFRS 13 Fair Value Measurement and IAS 19 Employee Benefits.
The disclosure proposals are intended to better enable companies, auditors, and others to make more effective materiality judgments and provide disclosures that are more useful to investors. Applying the proposed new approach, the IASB wants to enhance investor engagement to ensure it has an in-depth understanding of investors’ information needs and clearly explains those needs in the IFRS standards.
Hans Hoogervorst, chair of the IASB said: ‘We believe this new approach to developing disclosure requirements in IFRS standards can serve as a catalyst to improving information to investors; however, real improvements can only be achieved if all those involved, companies, auditors, regulators and investors work together.’
The IASB will ask participants to test the application of the proposed new requirements in IFRS 13, IAS 19 or both, to summarise their experience and report their results.
The fieldwork is intended to help the IASB better understand whether companies would be able to effectively comply with disclosure objectives, how disclosures prepared applying the proposed new approach might look and the effect the disclosure objectives could have on the quality and completeness of disclosures in financial statements.
The deadline for submitting comments is 21 October 2021.