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EFRAG launches ‘Short Discussion Series’ issuing the first two papers: (1) Conceptual analysis of the equity method and (2) Implications for standard setting following from a literature review on how captial providers use information

  • EFRAG (European Financial Reporting Advisory Group) (dk green) Image

17 Jan 2014

The European Financial Reporting Group (EFRAG) has issued two ‘Short Discussion Series’ (SDS) papers. The first paper deals with the equity method and especially considers to what extent the equity method in IAS 28 is a measurement basis, a one-line consolidation or a combination of both. EFRAG seeks to initiate a discussion on this topic and asks for constituents' comments. The second paper builds on a literature review on how captial providers use information that was presented in late December 2013 and reflects on implications of this literature review for standard setting. EFRAG has initiated the ‘Short Discussion Series’ in order to promote debates that address topical and problematic issues in financial reporting among European and other constituents.


EFRAG-SDS-paper on the equity method

Currently, the guidance in IAS 28 relating to the application of the equity method lacks clarity and is causing diversity in practice. It is not always clear whether the measurement basis or one-line consolidation concept should be applied to situations and issues that are not specifically addressed in IAS 28. The objective of this SDS paper is to gather feedback from constituents on their views regarding the equity method, which the EFRAG will consider when addressing this issue with the IASB and thus assisting the IASB to develop a clear set of principles for the basis of the equity method.

Comments are requested by 15 May 2014.

For more information, see the press release and the Short Discussion Series paper on the EFRAG website.


EFRAG-SDS-paper on the implications for standard setting following from the results of a literature review on the use of information by captial providers

The academic literature review was published by the EFRAG and the ICAS in December 2013. It examined how capital providers use financial statements. As a second step in its proactive project, EFRAG discusses in this SDS paper the implications for standard setting following from the findings of the academic literature review. While it seems not to be possible to meet the needs of all types of users simultaneously, the findings may, however, provide some directions for, for example, measurement, other comprehensive income, the importance of the statement of profit or loss, and other topics.

For more information, see the press release and the Short Discussion Series paper on the EFRAG website.

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