EFRAG criticizes that the detailed proposals do not get the balance right and is concerned that the proposals will result in so many lines in the primary financial statements that the key messages of those statements will be obscured.
EFRAG has issued its final comment letter on the IASB/FASB Discussion Paper Preliminary Views on Financial Statement Presentation.
EFRAG notes that applying an ‘everything in the same order and disaggregated to the same extent’ rule is neither the only, nor the best way to achieve cohesiveness. “It is very important that the implementation of the cohesiveness principle is done in a way that is thoughtful and pragmatic”, EFRAG notes.
EFRAG criticizes that the detailed proposals do not get the balance right. “We are concerned that there is a risk that the proposals will result in so many lines in the primary financial statements that the key messages of those statements will be obscured”, EFRAG notes.
EFRAG does not support the proposal that the new standard should require use of the direct method of presenting operating cash flows. Such an approach does not provide information that is more decision-useful than an indirect method and therefore justifies the additional cost that would usually be involved, EFRAG notes.
EFRAG also criticised the proposed reconciliation schedule suggesting that the schedule should be scaled down and should focus instead on remeasurements and large non-cash items. Also consideration should be given to restyling the statement of cash flows so that it can provide a reconciliation of net debt, because we understand that many users would like to be provided with such reconciliation.
Full press release
The Response can be downloaded below.
© 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