Conceptual Framework - Feedback on survey and Discussion Forum (IASB education session)
The Staff noted that during the 2011 agenda consultation many respondents thought that a disclosure framework was required to ensure that information disclosed is more relevant to investors and to reduce the burden on preparers. The Staff noted that the IASB held a discussion forum to explore how disclosures could be improved and simplified and to understand common problems with the current disclosure framework. The Staff also noted that there was a survey on disclosures launched in conjunction with the discussion forum.
The Staff presented some preliminary feedback on the discussion forum that was recently held by the IASB and the accompanying survey on disclosures in financial reporting.
The Staff noted that:
- There is a perceived disclosure problem that is viewed differently between users and preparers
- From a preparer’s perspective there are too many disclosures and from a user’s perspective there is not enough relevant information.
- The disclosure forum highlighted that there was a perception that Standards compel rather than guide and auditors and regulators are there for compliance rather than communication. The disclosure forum also highlighted that the application of materiality in relation to disclosures is a problem. It was noted that the onus was on preparers to rebut a presumption that information should not be disclosed. The Staff noted that the IASB could look into the issues with materiality and disclosure.
- There could be narrow scope amendments to IAS 1 such as removing language which compel preparers to provide information in a certain way
One Board member agreed that there could be amendments to IAS 1 but in terms of the larger question of what materiality means then this would need to involve auditors and regulators. It was noted that this dialogue should be started as soon as possible.
Another Board member who atended the disclosure forum and noted that the feedback he received was that the purpose of disclosure was a major concern. He confirmed that there was largely tension between communication and compliance in relation to disclosures.
The Staff noted to the Board that there was proposed to be a feedback statement on the survey and discussion forum at the end of March 2013.
No further significant Board comments were received.