Although EFRAG has preliminarily concluded that IFRS 16 meets the relevant qualitative characteristics, raises no issues regarding prudent accounting, is not contrary to the true and fair view principle, would improve financial reporting, compared to the standard and the interpretations it replaces, and would not put European entities at a competitive disadvantage taking into account the lack of convergence with the equivalent US GAAP Standard, EFRAG has not yet assessed whether it would reach an acceptable cost-benefit trade-off. Furthermore, during the consultation period, EFRAG will be conducting additional work on the impact of IFRS 16 on SMEs, views of users of financial statements, and the effect analysis of IFRS 16. 

EFRAG is expecting significant additional input into its assessment from this additional work and has not yet reached a preliminary conclusion as to whether IFRS 16 is conducive to European Public Good. Therefore, EFRAG encourages constituents to provide views on any matters that may be relevant to its endorsement advice, which need not be limited to the specific questions included in the consultation document. Comments are requested by 8 December 2016. EFRAG expects to issue a complete draft endorsement advice for an additional short consultation period in 2017.

Please go to the press release on the EFRAG website to access the consultation document and various supporting douments. EFRAG has also updated its IFRS endorsement status report.