Annual Improvements - 2006

Date recorded:

The Board discussed three issues for its annual improvement process.

Reporting compliance with IFRSs

The Board continued its discussion on the issue of whether IAS 1 Presentation of Financial Statements should be amended to provide guidance for situations where an entity is stating that its financial statements are in compliance, but not in full compliance with IFRSs.

The Board did not agree with the proposed amendment presented at the last Board meeting and had asked the staff to amend the wording and bring back.

Staff proposed the following revised amendment to IAS 1:

14A When an entity refers to IFRSs in describing the basis on which its financial statements are prepared but is not able to make an explicit and unreserved statement of compliance with IFRSs, the entity shall:

a. describe each difference between the basis on which its financial statements are prepared and IFRSs that is relevant to its financial statements; and

b. describe how the reported financial position and performance of the entity would have differed if the entity had complied with IFRSs.

The Board voted in favour of including the proposed amendment to IAS 1 with minor editorial amendments.

Point-of-sale costs

The Board debated an issue on whether the term 'point-of-sale costs' in IAS 41 Agriculture should be replaced with 'costs to sell' to improve consistency with other IFRSs. This issue had been referred to the Board from the IFRIC as it believed the issue would be best resolved through the annual improvements process.

The Board agreed to the proposed changes to IAS 41.

Unit-of-production method of amortisation

When the Board reviewed the IFRIC interpretation on service concessions, it raised an issue of whether IAS 38 Intangible Assets should be amended to clarify that it permits the use of production method of amortisation for intangibles.

The Board decided that the last sentence in paragraph 98 of IAS 38 should be deleted to clarify that the unit of production method could be permitted, even if it results in a lower amount of accumulated amortisation than under the straight-line method.

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