EFRAG final comment letter on the IASB's agenda consultation
13 Oct, 2021
The European Financial Reporting Advisory Group (EFRAG) has issued its final comment letter on the International Accounting Standard Board’s (IASB's) request for information asking for views on the strategic direction and balance of the IASB's activities, the criteria for identifying projects and which financial reporting issues it should prioritise.
EFRAG considers that the overall balance of the activities of the IASB is generally appropriate and should not be substantially modified over the 2022–2026 period.
EFRAG further suggests the the IASB identifies a separate area of its activity to address the connectivity between financial reporting and sustainability reporting and increases the resources devoted to digital reporting.
EFRAG considers that the priorities for the IASB should be to focus on finalising projects in its active work plan and conducting on a timely basis the Post-implementation Reviews (‘PIR’) of IFRS 9 Financial Instruments, IFRS 15 Revenue from Contracts with Customers, IFRS 16 Leases and, towards the end of the 2022-2026 period, IFRS 17 Insurance Contracts.
EFRAG understands that there is only capacity to add a limited number of projects to the IASB's agenda and indicates that, when deciding which projects to add, the IASB should primarily rely on their relevance and urgency rather than the level of resources involved. EFRAG identifies the following high priority projects for the IASB, ranked according to their priority:
- Intangibles;
- Sustainability in financial reporting, starting from climate (including connectivity and pollutant pricing mechanisms); and
- Crypto assets-liabilities.
In addition, EFRAG is of the view that the treatment of financial instruments with ESG features under IFRS 9 is an urgent and prevalent issue and requests the IASB to address this in the short term.
Other high priority projects identified by EFRAG are:
- Discontinued operations and disposal groups;
- Statement of cash flows and related matters; and
- Variable and contingent consideration.
EFRAG strongly encourages the IASB, in its research activities, to continue to build on the work of other organisations and create synergies.
Moreover, EFRAG considers that the seven criteria suggested in the RFI are useful and suggests that the IASB consider updating the Due Process Handbook to reflect them.
The press release and the final comment letter are available on the EFRAG website.
