01 May 2007
We have submitted a letter in response to the IASB's January 2007 Exposure Draft of a proposed amendment to IFRS 1 First-time Adoption of International Financial Reporting Standards: Cost of an Investment in a Subsidiary.
We welcome the fact that the Board has taken this issue on to its agenda. The proposals in the Exposure Draft address a real concern that it may be impracticable to apply IAS 27 with full retrospective effect on transition. This is creating a significant barrier, in some jurisdictions, to the adoption of IFRSs for the separate financial statements of parent companies. Addressing the issue should therefore lead to wider use of IFRSs and reduced costs for companies because they will no longer have to prepare financial statements under local GAAP.
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