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ESMA comment letters on the IFRS Interpretations Committee tentative agenda decisions on IFRS 12 and IFRIC 21

  • ESMA (European Securities and Markets Authority) (dark gray) Image

24 Nov 2014

The European Securities and Markets Authority (ESMA) has published two comment letters referring to tentative agenda decisions taken by the IFRS Interpretations Committee (IFRS IC).

The first comment letter refers to the IFRS IC’s tentative agenda decision on IFRS 12 Disclosure of Interests in Other Entities.   The IFRS IC took the tentative decision not to add to its agenda the request for clarification in respect of the requirements in paragraphs 12(e)-(g) of IFRS 12 which concern the disclosure of information about a subsidiary that has non-controlling interest that is material to the reporting entity.

ESMA agrees that neither an Interpretation nor an amendment to the Standard is necessary as “in the light of the existing IFRS requirements sufficient guidance exists”.  ESMA also “particularly welcomes” the reasoning in the tentative agenda decision that the approach chosen to present the required disclosures should reflect the disclosure objective of a Standard. 

The second comment letter refers to the IFRS IC’s tentative agenda decision on IFRIC 21 Levies.  The IFRS IC took the tentative agenda decision not to add to its agenda the requests to clarify accounting for the costs arising from recognising a levy.  ESMA has “serious concerns that the wording of the tentative agenda decision could have unintended consequences”.  ESMA comments that the tentative agenda decision “fails to clearly address the question whether a fixed production overhead can be recognised as part of the cost of a service provider’s inventory” and calls on the IFRS IC to clarify this point in its agenda decision.

Both the IFRS 12 and IFRIC 21 comment letters can be found on the ESMA website.

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