EFRAG draft comment letter on the IASB's exposure draft on disclosure requirements in IFRSs

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

11 May 2021

The European Financial Reporting Advisory Group (EFRAG) has issued a draft comment letter on the IASB exposure draft ED/2021/31 'Disclosure Requirements in IFRS Standards — A Pilot Approach (Proposed amendments to IFRS 13 and IAS 19)'.

The exposure draft contains proposed guidance for the IASB when developing and drafting disclosure requirements in IFRSs in future as well as proposed amendments to IFRS 13 Fair Value Measurement and IAS 19 Employee Benefits that result from applying the proposed guidance to those standards.

In its draft comment letter EFRAG

  • supports the objective of the project to improve the relevance of disclosures and to develop a more rigorous methodology for the IASB to define objective-based disclosure requirements;
  • agrees, in particular, with the proposal to work closer with users of financial statements and other stakeholders early in the standard-setting process;
  • notes that the proposed approach introduces a radical change from the existing guidance by making minimum requirements an exception and is concerned that it would expose preparers to second guessing, would make review of such disclosures and enforcement of the requirements more difficult for auditors and regulators and may ultimately not lead to the intended changes and improvement to information relevance;
  • encourages the IASB to further consider the interactions between its proposed approach and several other aspects.

Comments on EFRAG's draft comment letter are requested by 15 October 2021. For more information, see the press release and the draft comment letter on the EFRAG website.

The press release also notes that EFRAG will conduct field-testing of the IASB proposals and will issue shortly an invitation for companies to participate in its field test activities. The IASB also recently announced that it will conduct field-testing of its ED.

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