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EFRAG's comment letter and Feedback Statement on Proposed amendments to IAS 1 and IAS 8

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

23 Jan 2018

The European Financial Reporting Advisory Group (EFRAG) has issued its final comment letter and Feedback Statement on the IASB's Exposure Draft ED/2017/6 'Definition of Material - Proposed amendments to IAS 1 and IAS 8'

In its comment letter, EFRAG:

  • supports the objective to remove the existing inconsistencies in the definition of 'material' in the Conceptual Framework for Financial Reporting and in IFRS Standards and replacing the threshold 'could influence' with 'could reasonably be expected to influence; 
  • does not support inclusion of references to 'omitting', 'misstating' and 'obscuring' within the definition of 'material'. Instead,  EFRAG suggests removing the references to 'omitting', 'misstating' and 'obscuring' from the definition and defining material information as 'information that can reasonably be expected to, individually or collectively, influence the economic decisions that the primary users of financial statements make on the basis of those financial statements'; and
  • lastly, EFRAG suggests that the IASB should concentrate the guidance on materiality in a single general standard and use cross-references from other IFRS Standards to that guidance when needed.

The Feedback Statement describes the main comments received by EFRAG in response to its draft comment letter and how these comments were considered by EFRAG in finalising its comment letter to the IASB.

The press release, comment letter and the Feedback Statement are available on the EFRAG website.

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