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Disclosure initiative — Accounting Policies [ED]

Comment period ends on November 29, 2019

Next steps:

The IASB will review feedback on the exposure draft in Q4 2019

Last up­dated:

August 2019


On July 18, 2018, the International Accounting Standards Board (IASB) added a project to its agenda to develop guidance and examples to help entities apply materiality judgements to accounting policy disclosure. The Board added this project in response to feedback on the Disclosure Initiative—Principles of Disclosure Discussion Paper.

The Board is developing guidance and examples to explain and demonstrate the application of the “four-step materiality process” described in IFRS Practice Statement 2 Making Materiality Judgements (Materiality Practice Statement) to accounting policy disclosures. This guidance is initially being developed for inclusion in the Materiality Practice Statement.  The Board will consider whether to make any related amendments to the Standards in a future meeting.

The Board will continue its discussions throughout 2018 with a view to publishing an Exposure Draft of proposed amendments.

At its meeting on October 24, 2018, the IASB Staff presented a Paper to the Board setting out its detailed recommendations for the direction of the project. A summary of the Staff’s recommendations is as follows:

  • Staff recommend that the Board clarify that not all accounting policies relating to material transactions, other events or conditions are themselves material.
  • Staff also recommend that the Board:

(a) develop guidance to help entities apply effective judgement when deciding whether those accounting policies relating to material transactions, other events or conditions are in fact material;

(b) develop two or three examples to demonstrate the practical application of the guidance described in (a) and base those examples on paragraphs 46 to 55 of the Materiality Practice Statement;

(c) locate the guidance and examples described in (a) and (b) above within the ‘Specific topics’ section of the Materiality Practice Statement; and

(d) make additional, minor amendments throughout the Materiality Practice Statement to clarify that the four-step materiality process is applicable to accounting policy disclosures.

If implemented, these recommendations would potentially result in significant changes to current practice.  Based on feedback from financial statement users, most users said they do not find accounting policies that reproduce or summarize IFRS requirements useful. They thought that accounting policy disclosures are useful only when they:

(a) relate to material transactions, other events or conditions; and

(b) provide insight into how an entity has exercised judgement in selecting and applying accounting policies.


Other de­vel­op­ments

August 2019

On August 22, 2019, the AcSB issued its Exposure Draft that corresponds to the IASB’s Exposure Draft on this topic. Comments are requested by November 29, 2019.

On August 1, 2019, the IASB published an Exposure Draft "Disclosure of Accounting Policies" with proposed amendments that are intended to help preparers in deciding which accounting policies to disclose in their financial statements. Comments are requested by November 29, 2019.

April 2019

On April 12, 2019, the IASB® staff updated the work plan to indicate that the Board expects to issue an Exposure Draft in Q3/2019.

March 2019

On March 14, 2019, the IASB staff updated the work plan to indicate that the Board will issue an Exposure Draft in the second half of 2019.

September 2018

On September 20, 2018, the IASB staff up­dated this pro­ject to in­di­cate that the IASB ex­pects to is­sue an Exposure Draft in respect of this project (no date/timing specified for this). 


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