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IASB proposes amendments to IAS 1 as result of the disclosure initiative

  • IASB document Image

Mar 25, 2014

The IASB has published an exposure draft (ED) of proposed amendments to IAS 1, "Presentation of Financial Statements." The amendments clarify IAS 1 to address perceived impediments to preparers exercising their judgment in presenting their financial reports. Comments are requested by July 23, 2014.


The IASB formally added an initiative on disclosure to its work program in December 2012 to complement the work being done in the Conceptual Framework project. The initiative is made up of several smaller projects aimed at exploring opportunities to improve presentation and disclosure principles and requirements in existing Standards. Included is a narrow scope project on IAS 1, Presentation of Financial Statements, to ensure that entities are able to use judgment when presenting their financial reports, because the wording of some of the requirements in IAS 1 had, in some cases, been read to prevent the use of judgment.


Suggested changes

The IASB proposes in ED/2014/1, Disclosure Initiative (Proposed amendments to IAS 1), amendments in four areas that seem to impede the use of judgment:

  • Materiality. The IASB proposes clarifications that emphasize that (1) information should not be obscured by aggregating or disaggregating information, (2) materiality considerations apply to all parts of the financial statements, and (3) even when a Standard requires a specific disclosure materiality, considerations do apply.
  • Statement of financial position and statement of profit or loss and other comprehensive income (OCI). The IASB proposes to introduce (1) a clarification that the list of line items to be presented in these statements can be disaggregated and aggregated as relevant and (2) additional guidance on subtotals in these statements.
  • Notes. The IASB proposes to clarify that (1) the understandability and comparability should be considered when determining the order of the notes and (2) the notes need not be presented in the order listed in paragraph 114 of IAS 1.
  • Accounting policies. The IASB proposes to remove guidance and examples with regard to the identification of significant accounting policies that are perceived as being potentially unhelpful.

The IASB has also included one proposal that arose from a submission to the IFRS Interpretations Committee:

  • Presentation of items of OCI arising from equity-accounted investments. The IASB proposes to clarify that an entity's share of OCI of equity-accounted associates and joint ventures should be presented in aggregate as single line items based on whether or not it will subsequently be reclassified to profit or loss.


Transition requirements and effective date

The ED does not contain a proposed effective date. Also, no specific transition provisions are included in the ED.


Additional information

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