Transition and effective date (Agenda Paper 20A)

Background

In August 2019, the Board published the Exposure Draft (ED) 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.

The objective of Agenda Papers 20A–B was to present the staff analysis and recommendations to the Board about transition requirements and the effective date of amendments as well as determining whether staff can begin the balloting process for the amendments.

Staff recommendation

Staff recommended that the Board amends the transition requirements proposed in the Disclosure of Accounting Policies Exposure Draft to require entities to:

• a) disclose material accounting policy information for the current period; and
• b) disclose comparative accounting policy information if, applying paragraph 38 of IAS 1, it is relevant to understanding the current period’s financial statements.

Staff also recommended that the Board:

• a) require entities to apply the amendments to IAS 1 and IFRS Practice Statement 2 to annual reporting periods beginning on or after 1 January 2023 with early application permitted; and
  
• b) change the effective date of the amendments to IAS 8 resulting from the Accounting Policies and Accounting Estimates project to annual reporting periods beginning on or after 1 January 2023 with early application permitted.

Board Discussion

Some Board members agreed with the intention of the proposal to disclose comparative accounting policy information, however, did not agree with the express mention of IAS 1:38 in the staff recommendation.

Staff agreed that this reference was not required and the vote on this recommendation was taken on the basis that this reference is removed.

Some Board members expressed the view that the change to the effective date of the amendments to IAS 8 was not required given that the amendments are different in nature and changes could be made more quickly.  Additionally, a few Board members viewed the effective date of the amendments in January 2023 as overly generous.

Board Decisions

All 12 Board members present voted in favour of staff recommendations in relation to the transition requirements proposed.

All 12 Board members present voted in favour of staff recommendations in relation to the effective date of the IAS 1 amendments being 1 January 2023.

A majority of 7 Board members voted in favour of changing the effective date of the IAS 8 amendments to 1 January 2023.

Due process steps and permission to begin the balloting process (Agenda Paper 20B)

The purpose of this paper is for the Board to review the due process steps taken in the Disclosure Initiative—Accounting Policies project and decide whether the staff can begin the balloting process for the final amendments to IAS 1 and IFRS Practice Statement 2 Making Materiality Judgements.

Board Decisions

All 12 Board members present voted in favour of not re-exposing the amendments, agreed that all due process steps had been completed and gave permission to ballot.

One Board member expressed a view that she is considering whether to dissent but that this decision has not yet been finalised.