Disclosure initiative — Accounting policies

Date recorded:

Sweep issues (Agenda paper 20)


In August 2019, the Board published Exposure Draft ED/2019/6 Disclosure of Accounting Policies, which proposed amendments to IAS 1 and IFRS Practice Statement 2. The staff presented a summary of the comment letter feedback to the Board at its February 2020 meeting and proposed next steps in the May 2020 meeting. In July 2020 the Board gave staff to begin the balloting process.

The purpose of this agenda paper is to address two issues which have been raised by Board members as part of the balloting process. These are:

  • a. whether to introduce transition requirements or an effective date into IFRS Practice Statement 2; and
  • b. whether the Board agrees with a proposed revision to IAS 1:117B.

Staff analysis

In relation to introducing transition requirements or an effective date the staff are not recommending to do this for a number of reasons. These include the fact that this would not be a consistent approach to previous amendments to IFRS Practice Statement 2 and that it would be unnecessary as the guidance could not be applied until the amendments to IAS 1 around accounting policies becomes effective.

The staff recommended amending the words in IAS 1:117B to remove the reference to a policy being material ‘if users of the entity’s financial statements would need it’. This is because the proposed wording had the unintended consequence of providing an alternative definition of ‘material’.

Staff recommendations

The staff recommended that the Board does not add transition requirements or an effective date to the amendments to IFRS Practice Statement 2.

The staff recommended that paragraph IAS 1:117B should state that accounting policy information is expected to meet the definition of material if it is needed to understand other material information in the financial statements.

Board discussion

There was limited discussion about the first recommendation. However, the Vice-Chair did not understand why the staff were proposing that the Practice Statement would give a reader no indication of which version they were reading. The staff confirmed that there would be nothing in the Practice Statement to say when it was revised or published. Some other members also thought there should be something to identify which version a person was reading. There will be some references to the changes in the Basis for Conclusions.

The staff recommendation was supported by 7 of the 13 Board members.

Only one member commented on the second recommendation, which was supported by all Board members.

Correction list for hyphenation

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