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EFRAG is concerned about the issues explained below:
IFRS 3 Business Combinations: Accounting for contingent consideration in a business combination
EFRAG agrees with the proposed amendments; however, EFRAG believes the IASB should not just make consequential amendments to IFRS 9 but also amend IAS 39 'Financial Instruments: Recognition and Measurement' as entities that do not apply IFRS 9 early may encounter the same issues. In addition, EFRAG believes that the IASB should also align IAS 39 'Financial Instruments: Recognition and Measurement' to the requirement in IFRS 9 'Financial Instruments' regarding the accounting for own credit risk on financial liabilities measured at fair value as it believes that users of the financial statements of entities that do not apply IFRS 9 early would also benefit from this improvement in financial reporting.
IAS 12 Income Taxes: recognition of deferred tax assets for unrealised losses on available-for-sale debt securities
EFRAG understands that the objective of the amendments is to clarify the present wording in the standard. However, EFRAG has in its due process collected evidence that different understandings of the basic mechanics of IAS 12 may lead to different interpretations of the current requirements. Furthermore, the amendment is triggered by a specific and particular request while the amendments are to be implemented more widely. Therefore, EFRAG encourages the IASB to perform a thorough analysis of the consequences before making the decision whether to finalise the proposed amendments. If so, the Board should improve the drafting of the amendments so that they will be understood consistently.
Finally, as a general comment, EFRAG believes the proposed amendments increase the already lengthy disclosures required by IFRSs. In EFRAG’s view only relevant information should be disclosed, so that detailed information does not obscure relevant information in the notes to the financial statements. Accordingly, EFRAG believes that the IASB should perform a specific assessment before proposing future amendments to IFRSs.