The annual improvements process provides a mechanism for non-urgent but necessary amendments to International Financial Reporting Standards (IFRSs) to be grouped together and issued in one package. Such amendments may clarify guidance and wording, or make relatively minor amendments to the standards that address unintended consequences, conflicts or oversights.
The suggested amended criteria for determining whether a matter relating to the clarification or correction of IFRSs should be addressed using the annual improvements process are outlined below. All criteria must be met.
- The proposed amendment has one or both of the following characteristics:
- clarifying—the proposed amendment would improve IFRSs by:
- clarifying unclear wording in existing IFRSs, or
- providing guidance where an absence of guidance is causing concern.
A clarifying amendment maintains consistency with the existing principles within the applicable IFRSs. It does not propose a new principle, or a change to an existing principle.
- correcting—the proposed amendment would improve IFRSs by:
- resolving a conflict between existing requirements of IFRSs and providing a straightforward rationale for which existing requirement should be applied, or
- addressing an oversight or relatively minor unintended consequence of the existing requirements of IFRSs.
A correcting amendment does not propose a new principle or a change to an existing principle, but may create an exception from an existing principle.
- The proposed amendment has a narrow and well-defined purpose, ie the consequences of the proposed change have been considered sufficiently and identified.
- It is probable that the IASB will reach conclusion on the issue on a timely basis. Inability to reach a conclusion on a timely basis may indicate that the cause of the issue is more fundamental than can be resolved within annual improvements.
- If the proposed amendment would amend IFRSs that are the subject of a current or planned IASB project, there must be a pressing need to make the amendment sooner than the project would.
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The consultation document of the IFRS Foundation is open for comment until 30 November 2010. It can be accessed via the IASB's website. The corresponding press release is available Here (PDF 35k).
