Disclosure of Accounting Policies
- Completed
- Completed
- Hocine Kebli, Archive - Almudena Alcala, Juan Jose Gomez de la Calzada
Description
On 18 July 2018, the IASB added a project to its agenda to develop guidance and examples to help entities apply materiality judgements to accounting policy disclosure. The IASB added this project in response to feedback on the Principles of Disclosure Discussion Paper (see EFRAG's projects Disclosure Initiative - Principles of Disclosure and Disclosure Initiative - Targeted Standards-level Review of Disclosures.)
The IASB is developing amendments to paragraphs 117-124 of IAS 1 Presentation of Financial Statements to require entities to disclose their material accounting policies rather than their significant accounting policies. To support this amendment the IASB is also developing guidance and examples to explain and demonstrate the application of the 'four-step materiality process' described in IFRS Practice Statement 2 Making Materiality Judgements to accounting policy disclosures (see EFRAG's project Disclosure
Initiative - Definition of Material )
The IASB issued its Exposure Draft on 1 August 2019.
EFRAG published its draft Comment Letter on 27 September 2019 and
its final Comment Letter on 12 December 2019. EFRAG supported the proposal to
replace the undefined reference to 'significance' with the defined concept of
'materiality'. This, with other Disclosure Initiative projects, may help
entities to identify and disclose accounting policies that provide material
information to users and the connection to the application of materiality to
other information.
EFRAG suggested that the IASB further
clarifies that, in applying the principle of materiality, an entity needs also
to consider the accounting policies that are relevant to an understanding of
its financial statements taken as a whole, consistently with Step 4 of the
Materiality assessment process developed by the IASB.
EFRAG also noted the possible inconsistencies
of the proposed guidance with the existing disclosure requirements in IAS 8
Accounting Policies, Changes in Accounting Estimates and Errors regarding
accounting policies choices and changes. Lastly, EFRAG welcomed the proposed guidance and examples to help
entities determine when an accounting policy is material and suggests some
improvements.
EFRAG published its feedback statement on the IASB Exposure Draft ED/2019/6 Disclosure of Accounting Policies on 22 January 2020.
The IASB issued the final Amendments on 12 February 2021.
On 17 February 2021 the European Comission issued a letter requesting advice on the endorsement ot the Amendments.
On 15 March 2021, EFRAG published its draft endorsement advice which was open for comment until 7 June 2021.
EFRAG published its Comment Letter on 12 December 2019 which supported the proposal to replace the undefined reference of 'significance' with the defined concept of 'materiality'. EFRAG issued a feedback statement summarising the feedback received from its constituents on its DCL in January 2020.
The IASB issued Disclosure of accounting policies (Amendments to IAS 1 and to the IFRS Practice Statement 2) on 12 February. EFRAG issued its draft endorsement advice on 15 March 2021 with comment period ending on 7 June 2021.
At its March meeting EFRAG TEG agreed to recommend a draft endorsement which was subsequently approved by the EFRAG Board by written procedures.
On 18 July 2018, the IASB added a project to its agenda to help entities to apply materiality judgements to accounting policy disclosures. The IASB added this project in response to feedback on the Disclosure Initiative - Principles of Disclosure Discussion Paper (see section 2.2.8 above).
The IASB issued its Exposure Draft on 1 August 2019. The proposed amendments revise paragraphs 117-124 of IAS 1 Presentation of Financial Statements to require entities to disclose their material accounting policies rather than their significant accounting policies. To support this amendment the IASB is also developing guidance and examples to explain and demonstrate the application of the 'four-step materiality process' described in IFRS Practice Statement 2 Making Materiality Judgements to accounting policy disclosures.
EFRAG published its Comment Letter on 12 December 2019 which supported the proposal to replace the undefined reference of 'significance' with the defined concept of 'materiality'. EFRAG issued a feedback statement summarising the feedback received from its constituents on its DCL in January 2020.
The IASB issued Disclosure of accounting policies (Amendments to IAS 1 and to the IFRS Practice Statement 2) on 12 February 2021.
At its March meeting, EFRAG TEG agreed to recommend a draft endorsement advice which was subsequently approved by the EFRAG Board by written procedure. EFRAG's preliminary assessment is that the Amendments satisfy the criteria for endorsement for use in the EU and therefore recommends its endorsement.
The draft endorsement advice was issued on 15 March 2021 with comments requested by 7 June 2021.
EFRAG submitted its Endorsement Advice Letter to the European Commission on 8 July 2021.
Next Steps
EFRAG has completed its diligences regarding its endorsement advice.
Documents
Project news
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08/07/2021 - EFRAG's Endorsement Advice on Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2)
EFRAG has completed its due process regarding Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2) and has submitted its Endorsement Advice Letter to the European Commission.
The Endorsement Advice Letter to the European Commission can be found here.
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15/03/2021 - EFRAG requests comments on its draft endorsement advice on Disclosure of Accounting Policies
EFRAG is consulting on both its assessment of Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2) (‘the Amendments’) against the technical criteria in the EU and on its assessment of whether the Amendments are conducive to the European public good. Comments are requested by 7 June 2021.
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22/01/2020 - EFRAG's feedback statement on IASB Exposure Draft ED/2019/6 Disclosure of Accounting Policies.
EFRAG published its feedback statement on the IASB Exposure Draft ED/2019/6 Disclosure of Accounting Policies.
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12/12/2019 - EFRAG's Comment Letter on the IASB Exposure Draft ED/2019/6 Disclosure of Accounting Policies.
EFRAG has published its Comment Letter in response to the IASB's Exposure Draft ED/2019/6 Disclosure of Accounting Policies (Proposed Amendments to IAS 1 and IFRS Practice Statement 2) (the ED).
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04/10/2019 - EFRAG draft comment letter on the IASB Exposure Draft ED/2019/6 Disclosure of Accounting Policies (Proposed Amendments to IAS 1 and IFRS Practice Statement 2)
EFRAG has published its draft comment letter in response to the IASB's Exposure Draft ED/2019/6 Disclosure of Accounting Policies (Proposed Amendments to IAS 1 and IFRS Practice Statement 2) and seeks constituents' views on the proposals. Comments are requested by 22 November 2019.
