EFRAG has published its comment letter in response to the IASB´s ED/2015/1 Classification of Liabilities - Proposed amendments to IAS 1.
EFRAG agrees with the IASB’s objective to clarify the requirements in IAS 1 Presentation of Financial Statements on classification of liabilities and remove some inconsistencies in the terms used in the Standard. In EFRAG’s view, the proposals in the ED are likely to result in greater consistency in applying the principles in IAS 1 and therefore in relevant financial information.
EFRAG also recommends, to avoid further diversity in practice, that the IASB provides additional guidance in situations where the rights to defer settlement of a liability are subject to conditions that occur and are assessed after the end of the reporting period and in situations where liabilities can be settled through the issuance of shares at the option of the counterparty.
Finally, EFRAG suggests that the IASB further explores whether current guidance always provides the most relevant information including in circumstances when rights to defer settlement are not substantive as of the reporting period. It seems most appropriate if the IASB looked at this issue as part of its ongoing activities in the Disclosure Initiative project.
Full press release
Full comment letter
© EFRAG - European Financial Reporting Advisory Group
Key
Hover over the blue highlighted
text to view the acronym meaning
Hover
over these icons for more information
Comments:
No Comments for this Article