EFRAG draft comment letter on annual improvement proposals 2010-2012
The European Financial Reporting Advisory Group (EFRAG) has issued its draft comment letter on IASB Exposure Draft ED/2012/1 'Annual Improvements to IFRSs 2010-2012 Cycle'. EFRAG expresses reservations regarding to proposed amendments.
EFRAG agrees with most proposals in the Exposure Draft that was published in May 2012. However, EFRAG is concerned about the proposed amendments to the following two standards:
- IFRS 3 Business Combinations — Accounting for contingent consideration in a business combination
EFRAG supports the proposed amendments but believes that the IASB should also propose consequential amendments to IAS 39 Financial Instruments: Recognition and Measurement and reiterates its request to amend IAS 39 to align the accounting for own credit risk on financial liabilities measured at fair value with the requirements in IFRS 9 Financial Instruments.
- IAS 12 Income Taxes — Recognition of deferred tax assets for unrealised losses
EFRAG appreciates the IASB’s responsiveness to this practice issue, but has concerns about the wider implications of the proposed amendments in other circumstances.
Comments on the letter are invited by 22 August 2012. The draft comment letter can be downloaded via the press release on EFRAG's website.