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EFRAG begins public consultation on equity instruments

  • EFRAG (European Financial Reporting Advisory Group) (dk green) Image

06 May 2019

The EFRAG has launched a public consultation exploring potential alternative accounting treatments to fair value measurement for long-term investment portfolios of equity and equity-type instruments.

The consultation represents the EFRAG’s efforts to meet the European Commission’s Action Plan on Sustainable Finance initiative. Through the use of a questionnaire, the EFRAG will gather views from constituents on possible alternative accounting treatments meeting the following objectives:

  • “[P]roperly portray the performance and risks of long-term investment business models, in particular for those equity and equity-type investments that are much needed for achieving the UN Sustainable Development Goals and the goals of the Paris Agreement on Climate Change;”
  • “[P]referably enhance investors’ insight in the long-term performance of investments, as opposed to recognising point-in-time market-based value changes in reported profit or loss during the duration of the equity investment.”

Comments on the questionnaire are due by 5 July 2019. Respondents are encouraged to read the accompanying EFRAG Secretariat background paper. For more information, see the press release on the EFRAG’s website.

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