AOSSG warns against delaying effective dates

  • AOSSG (Asian-Oceanian Standard-Setters Group) (dk green) Image

09 Jul 2015

The Asian-Oceanian Standard-Setters Group (AOSSG) has commented on the International Accounting Standards Board's (IASB) Exposure Draft ED/2015/2 'Effective Date of IFRS 15'. The AOSSG supports deferring the effective date in this case but warns the IASB against setting 'a precedent for constituents seeking amendments to the effective date of other standards, whenever the implementation is found to be challenging'.

The IASB proposed deferring the effective date of IFRS 15 in May 2015 to give entities additional time to implement targeted amendments to IFRS 15 Revenue from Contracts with Customers that the IASB has tentatively decided on and to acknowledge that IFRS 15 was issued later than had been intended, so implementation time was shorter than anticipated in the first place. Although the AOSSG sees the validity of these arguments it believes that the IASB should try to avoid similar cases in the future:

In principle, the AOSSG believes that the IASB should undergo sufficient due process to carefully consider every aspect of the standard (including the effective date) before finalising the standard. Although the AOSSG generally agrees with the need to extend the effective date for this case, the AOSSG encourages the IASB to seek to improve its due process based on the lessons learnt, such that the IASB will minimize the risks of delaying the effective date in future standards.

The AOSSG makes two suggestions how this could be achieved:

  • The IASB could introduce a protocol to redeliberate the effective date when the issuance of the standard is later than originally anticipated or to defer the final decision of the effective date until immediately before the issuance of the standard.
  • The IASB could set a formula for determining the implementation lead-time when it decides on the effective date.

Please click to access the comment letter on the AOSSG website.

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