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On 13 March 2012, the IASB published amendments to IFRS 1 First-time Adoption of International Financial Reporting Standards 'Government Loans' (the ‘Amendments’). The Amendments deal with loans received from governments at a below market rate of interest, and give first-time adopters of IFRSs relief from full retrospective application on transition to IFRSs. This relief is the same as the one which was given to existing preparers of IFRS financial statements in 2008 when IAS 20 Accounting for Government Grants and Disclosure of Government Assistance was amended.
In April 2012, EFRAG issued an Invitation to Comment relating to the endorsement of the Amendments for use in the EU and EEA. It is consulting both on its assessment of the amendments against the technical criteria for the endorsement in the EU, and on its initial assessment of the costs and benefits that would arise from the implementation and application of the Amendments in the EU.
EFRAG’s initial assessment is that the Amendments satisfy the technical criteria for EU endorsement and EFRAG should therefore recommend its endorsement.