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On 12 December 2013, the IASB published for public comment an ED containing five proposed amendments to four IFRSs. The proposed amendments reflect issues discussed by the IASB in the project cycle that began in 2012. The proposed amendments are listed below:
EFRAG issued its final comment letter on 12 March 2014. In its final comment letter, EFRAG was still broadly supportive of the IASB’s proposals in the ED but it reiterated its concerns on the proposed amendments to IAS 19.
Summary of the final position arrived at
In its final comment letter EFRAG maintained the concerns it had expressed on a preliminary basis as they were shared by most constituents. It also reflected additional circumstances identified by its constituents in which the proposals would not result in a meaningful outcome.
Furthermore, EFRAG concurred with its constituents that the IASB should not consider aspects which are only relevant in a specific jurisdiction in its standard-setting process; therefore it removed from the comment letter its tentative recommendation to the IASB to consider this type of aspects in finalising these amendments.
Finally EFRAG confirmed its support for the IASB’s proposals to apply these amendments retrospectively, noting that most constituents agreed with its preliminary view.
Overall, EFRAG remained supportive of the IASB’s intention to issue short-term guidance dealing with countries where a high-quality corporate bond market does not exist and that use the same currency as other countries – pending the outcome of its research project on discount rates.
However, EFRAG reiterated its recommendations to the IASB to clarify the objectives and the rationale underlying the selection and use of a discount rate in measuring post-employment benefit obligations before finalising these proposals. In EFRAG’s view, only by clarifying these objectives, entities could exercise judgment in addressing the implementation issues that could arise in applying this short-term guidance.
Constituents' comments
The majority of respondents were supporting the IASB’s intention to provide this short-term clarification. However, they were also concerned that these amendments could not result in meaningful outcomes in a number of circumstances that they described in their comment letter.
Two constituents believed that the IASB should not consider aspects which are only relevant in a specific jurisdiction in its standard-setting process; therefore they believed that such recommendation in EFRAG’s draft comment letter should be removed. Finally, the majority of constituents supported the retrospective application of these amendments.