EFRAG issues draft endorsement advice and effects study report on amendments to IAS 16 and IAS 38

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

17 Jun, 2014

The European Financial Reporting Advisory Group (EFRAG) has issued for comment its draft endorsement advice for the use of the amendments to International Accounting Standard (IAS) 16 ‘Property, Plant and Equipment’ and IAS 38 ‘Intangible Assets’ in the European Union (EU). EFRAG has also issued its Effects Study Report.

The amendments to IAS 16 and IAS 38, issued by the International Accounting Standards Board (IASB) in May 2014, provide additional guidance on how the depreciation or amortisation of property, plant and equipment and intangible assets should be calculated.  The amendments are effective for annual periods beginning on or after 1 January 2016, with earlier application being permitted.

EFRAG supports the adoption of the amendments to IAS 16 and IAS 38 and recommends their endorsement.  EFRAG’s initial assessment is that the amendments to IAS 16 and IAS 38 meet the technical requirements of the Regulation (EC) No 1606/2002 of the European Parliament and of the Council on the application of international accounting standards.     

EFRAG’s conclusion is supported by an Effects Study Report which considers the costs and benefits of implementing the amendments to IAS 16 and IAS 38. EFRAG’s assessment is that the benefits for preparers and users in implementing the amendments to IAS 16 and IAS 38 outweigh the costs.

Comments are requested by 17 July 2014. 

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