EFRAG is generally supportive but has some concerns about the industry-specific nature of the exemptions being proposed.
EFRAG issued its draft comment letter on the IASB Exposure Draft of proposed amendments to IFRS 1 ‘Additional Exemptions for First-time Adopters’. EFRAG is generally supportive but has some concerns about the industry-specific nature of the exemptions being proposed. If there is to be an end to the changes being made to IFRS 1, it is important to express the exemptions in IFRS 1 in general terms wherever possible, EFRAG states.
IFRS 1 sets out exemptions to the normal requirements of IFRS that can be applied when an entity prepares its first set of financial statements in compliance with IFRS.
IFRS 1 provides some relief from the requirements in IFRS that would otherwise apply in order to ensure that the cost/benefit objective in particular is met. Areas where additional exemptions are proposed are:
Ø deemed cost for oil and gas assets, and disclosures relating to those assets,
Ø changes in existing decommissioning, restoration and similar liabilities included in the cost of property, plant and equipment
Ø deemed cost for assets used in operations subject to rate regulation, and
Ø determination of whether or not an arrangement involves a lease.
Deadline for comments is 9 January 2009.
© EFRAG - European Financial Reporting Advisory Group
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EFRAG draft comment letter on IFRS1.pdf
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