Chair of the IFRS Interpretations Committee clarifies timing of implementing agenda decisions

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Mar 20, 2019

On March 20, 2019, the International Accounting Standards Board (the Board) published an article by Sue Lloyd, Vice-Chair of the IASB and Chair of the IFRS Interpretations Committee, on the timing of stakeholders’ compliance with IFRS Interpretations Committee agenda decisions.

At its December 2018 meeting, the Board decided to update its Due Process Handbook to allow companies “suf­fi­cient time” to implement changes in accounting policy that result from the IFRS Interpretations Committee’s agenda decisions.

In the new article, Ms. Lloyd reminds readers that the IFRS Interpretations Committee publishes agenda decisions after it decides a stakeholder issue does not require standard-setting measures. Instead, the Committee explains how existing IFRS® Standards apply to the stakeholder’s issue. Ms. Lloyd notes:

[T]he Board has acknowledged that agenda decisions often provide new information that should be seen as helpful and persuasive (for example, by integrating requirements in the Standards with material in the Basis for Conclusions and Illustrative Examples). This means that a company does not have an error simply because its application of IFRS Standards was inconsistent with an agenda decision.

She goes on to acknowledge that “it may take time to implement such an accounting policy change” and further discusses the Board’s concept of “sufficient” implementation time:

[I]t depends on the particular facts and circumstances. It will depend on the accounting policy change and the reporting entity. Preparers, auditors and regulators will need to apply judgement to determine what is sufficient. But as a rule of thumb I think it is fair to say that we had in mind a matter of months rather than years.

Ms. Lloyd emphasizes that companies should consider agenda decisions — and begin implementing necessary accounting policy changes — on a more timely basis. She underscores that judgement is required, just as it is with applying IFRS Standards.

Review the article on the Board’s website.

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