The amendments result from the IASB’s ‘Disclosure Initiative’ project which comprises several smaller projects to improve presentation and disclosure requirements in existing standards.  The amendments aim at clarifying IAS 1 'Presentation of financial statements' to address perceived impediments to preparers exercising their judgment in presenting their financial reports.  The ED proposes amendments to the following areas of IAS 1:

• Materiality and aggregation;
• Presentation in the statement of financial position and statement of profit or loss and other comprehensive income;
• Notes structure; and
• Disclosure of accounting policies.

The amendments also include proposals relating to the presentation of items of Other Comprehensive Income (OCI) arising from equity-accounted investments.

EFRAG supports the changes to clarify the existing guidance in IAS 1 “that was perceived to be overly prescriptive if read and applied too literally”.  EFRAG believes that the changes ”should enable entities to exercise more judgement in presenting and disclosing information” and will lead to an improvement in the quality and relevance of information in the notes. 

However, EFRAG proposes a number of improvements to the drafting of the proposed changes and recommends consistent use of defined terms relative to the current IASB standards to avoid any future amendments.

Click for:

• Press release (link to EFRAG website).
• EFRAG final comment letter (link to EFRAG website).
• Our 25 March 2014 story on ED/2014/01.
• Our disclosure initiative project page.