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EFRAG is generally not in favour of introducing accounting policy options in IFRS, as it reduces the comparability of financial information. However, EFRAG believes that this is outweighed by the benefits of better aligning the accounting principles applicable to different sets of financial statements, even though such benefits may be mitigated by divergences resulting from the interaction of IAS 27 and IAS 28 with other standards.
In addition, EFRAG thinks that:
(a) the IASB should explain better in the Basis for Conclusions why it believes the consequential amendment to IAS 28 Investments in Associates and Joint Ventures is necessary and how it improves the quality of financial reporting in the separate financial statements;
(b) relief should be provided from full retrospective application to entities that opt to use the equity method to account for subsidiaries in their separate financial statements;
(c) paragraph C5 of IFRS 1 First-time Adoption of International Financial Reporting Standards should be amended to extend the exemption for past business combinations and past acquisitions of investments in associates and joint ventures to cover subsidiaries, including those that were not acquired, and to consider specifically the treatment of such relief in the separate financial statements; and
(d) the IASB should take this opportunity to clarify the objective of separate financial statements even though this should be considered more comprehensively in the future as part of IASB’s research activities.