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IAS 1 — Disclosures about going concern

Date recorded:

The project manager provided background of the project and explained that this project does not change the assessment of the going concern assumptions and it only focused on providing trigger events or conditions that will require disclosure.

There was a lively discussion of the project.

One board member mentioned that going concern is an issue already difficult to disclose, and if specific triggers are added, then constituents will keep asking for specific cases and it will be a never ending process.

Another board member expressed that IAS 1 already requires disclosure of going concern issues and there is no need for additional trigger requirements, he considers that it is not an accounting area but instead auditing and entity regulators should require specific triggers.

One Board member indicated that there will be negative consequences and these requirements will prove not to be useful.

Another Board member said that management is already required to disclose risks and accordingly, he disagreed with the proposal.

One Board member agreed with the proposal because sensitive information should be given to shareholders; although, there is a need to avoid boiler-plate type disclosure and add meaningful information.

The project manager explained that the project includes gross trigger events because it is required by some jurisdictions and there is too much judgement involved.

One Board member expressed that IAS 1 already works well and there are no problems right now with going concern disclosures there is also a risk for duplicating requirements.

Another Board member expressed support for the staff proposal expressing concern that the proposal does not require disclosure until a trigger event is met.

The project manager mentioned that investors need disclosure of issues and actions to be taken by management.

One board member expressed being sceptic about the project but would like to issue the ED to see what the reaction is.

After a vote, the IASB rejected the proposals, with 8 members voting against the staff recommendation.

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