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IASB publishes Request for Information on the post-implementation review of IFRS 13

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25 May 2017

The International Accounting Standards Board (IASB) has issued a Request for Information (RFI) seeking comments from stakeholders to identify whether IFRS 13 'Fair Value Measurement' provides information that is useful to users of financial statements; whether there are areas of IFRS 13 that are difficult to implement and may prevent the consistent implementation of the standard; and whether unexpected costs have arisen in connection with applying or enforcing the standard.

The post-implementation review process for IFRS 13 was officially added to the IASB's agenda in January 2017. Before that, the IASB had been gathering information to determine the scope of the review and to identify the main questions that need to be answered before the implementation of IFRS 13 can be assessed.

The information gathered so far indicates that many stakeholders believe that IFRS 13 works well and has led to significant improvements. This is in line with the findings of the FASB's post-implementation review (PIR) of the US GAAP Topic 820 Fair Value Measurement - both standards are the result of a joint convergence project.

However, IASB stakeholders contacted so far have identified four broad areas where IFRS 13 to their mind might still benefit from improvements. These four areas are the backbone of the RFI:

  • Disclosures about fair value measurements. Some of the disclosure requirements for Level 3 fair value measurements are perceived as onerous while at the same time their usefulness is questioned.
  • Prioritising Level 1 inputs or the unit of account. IFRS 13 is perceived as not clear on whether entities should prioritise Level 1 inputs or the unit of account when determining the fair value of investments in joint ventures and associates.
  • Application of the concept of the highest and best use. Concerns in this area regard the implications of applying the concept of highest and best use in the measurement of groups of operating assets.
  • Application of judgement in specific areas. Challenges around this have been mentioned to the IASB and the question is whether further support could be helpful.

In addition those areas, the IASB also encourages respondents to raise any issues that they have come across but that have not been covered by the questions in the RFI. Also, the RFI asks respondents whether the IASB should strive to maintain convergence with US GAAP Topic 820 Fair Value Measurement in any changes that might be the result of the PIR.

After the comment period ends, the IASB will consider the comments received along with information gathered through other consultation activities and findings from research on the topic. The final conclusions of the IASB will be presented in a report and a feedback statement which will also set out the steps the IASB believes should be taken as a result of the review.

Comment deadline is 22 September 2017. The request for information and a corresponding press release are available on the IASB website. In addition, the IASB has released a call for research seeking applications to undertake a literature review, bringing together the existing academic literature on the effect of implementation of IFRS 13. Deloitte has released an IFRS in Focus newsletter outlining the contents of the RFI.

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