EFRAG endorsement status report
21 Dec 2012
The European Financial Reporting Advisory Group (EFRAG) has updated its report showing the status of endorsement, under the EU Accounting Regulation, of each IFRS, including standards, interpretations, and amendments. The latest report follows the issue of EFRAG's draft endorsement advice on the IASB's investment entities amendments, in which EFRAG’s initial assessment is that the amendments satisfy the technical criteria for EU endorsement and EFRAG should therefore recommend their endorsement.
In its draft endorsement advice on the investment entities amendments, EFRAG notes the following on the question of the exemption from consolidation:
EFRAG generally believes that a reporting entity should not differentiate between types of entities when applying the control model of consolidation in IFRS 10 Consolidated Financial Statements. However, EFRAG notes that the Amendments respond to the concerns of users of financial statements, who expressed support for a consolidation exception for subsidiaries of investment entities, and argued that their interests are best served by having a single line measurement basis based on fair value, instead of consolidation of subsidiaries of investment entities.... Although EFRAG acknowledges... concerns, we believe that limiting the use of the exception to investment entities as defined under the Amendments, does not affect the relevance of information produced by those entities, and therefore should not preclude the information provided under the Amendments from meeting the relevance criterion.
In accordance with its usual technical analysis, the draft endorsement advice also considers the investment entity amendments in terms of reliability, compatibility, and understandability before noting "EFRAG’s overall initial assessment is that the information resulting from the application of the Amendments would not be contrary to the true and fair view principle".
Comments on the Invitation to Comment on EFRAG's draft endorsement advice are requested by 28 January 2013.
Click for:
- More information about the draft endorsement advice (link to EFRAG website)
- EFRAG Endorsement Status Report 20 December 2012
