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FRC comments on IFRS IC tentative agenda decision regarding IAS 1 application

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07 May 2014

The UK Financial Reporting Council (FRC) have commented on the IFRS Interpretations Committee (IFRS IC) tentative agenda decision not to add to its agenda issues raised in respect of financial statement presentation. The FRC agree that these issues will be best addressed by the IASB. However, they are concerned by comments made to support the tentative agenda decision regarding presentation of additional statements or columns in the primary statements.

In its tentative agenda decision, the IFRS IC has indicated that "the addition of pro forma columns to the primary statements would be unlikely to meet [the] requirement [of paragraph 112(c) of IAS 1]".

The FRC are concerned about what is meant by the term "pro forma columns" in this statement.  In particular, many UK preparers present additional columns that, effectively, sub-analyse the IFRS information to analyse results before and after non-recurring, unusual or individually material items.  The FRC do not believe that such a presentation is precluded by IAS 1.

The FRC have requested that, in finalising this agenda decision, the IFRS IC should make it clear that the use of additional columns may be appropriate where they effectively sub-analyse the total IFRS-compliant information by providing additional line items, headings and subtotals, but not where the information presented is hypothetical or otherwise not compliant with IFRSs.

The full response letter is available from the FRC website.

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