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In the letter EFRAG fully supports the aims of the IASB's Principles of Disclosure project. EFRAG also agrees with the description of the 'disclosure problem' insofar as it is acknowledged that the problem is multifaceted, includes behavioural aspects and that the requirements in IFRS Standards are not the only root cause.
EFRAG considers that, in the next steps of the project, a high priority should be given by the IASB to a comprehensive review of standards-level requirements. The review should, in particular, aim to identify and remove any disclosure requirements that are disproportionate or redundant.
Lastly, EFRAG regrets that a number of other issues identified in its 2012 Discussion Paper Towards a Disclosure Framework for the Notes are not addressed in the IASB DP, including:
- the boundaries of the financial statements i.e. information that should be provided in financial statements and information that belongs outside financial statements;
- the impact of technology on the presentation of financial statements and on disclosures; and
- exploring a tiered approach to disclosure requirements. EFRAG notes that the NZASB staff’s proposals and the ‘core and more’ proposals in The Future of Corporate Reporting published by FEE (now Accountancy Europe) in October 2015 are examples of tiered approaches and encourages further analysis of their advantages and disadvantages.
EFRAG encourages the IASB to consider the implications of developments in technology on the disclosure problem and on the presentation of financial statements in general in greater depth.