Deloitte comments on IASB’s proposed disclosure requirements in IFRS Standards

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06 Jan 2022

We have commented on the IASB's exposure draft ED/2021/3 'Disclosure Requirements in IFRS Standards — A Pilot Approach' published in March 2021.

The ED contains proposed guidance for itself 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.

We support the efforts of the Board to improve disclosures and to address the disclosure problem. We agree that the inclusion of disclosure objectives and a description of users’ needs are helpful to enhance the use of judgement in the preparation of financial statements. However, we do not agree with the removal of prescriptive disclosure requirements and we share the concerns laid out in the alternative view on enforceability of the approach in practice. Further, we note in the ‘Future effects’ section that the Board will decide through the normal process whether to amend the disclosure section of IFRS Standards already in issue to reflect the proposals in the ED. We would not support such a decision if the amendments were developed as proposed in the ED.

In addition, we support the proposal to include a paragraph for each specific objective on why the information is needed by users, however, we note that for some examples provided in respect of IFRS 13 and IAS 19 the needs of users could be explained more clearly. In terms of the proposals in the ED, we strongly believe that the Board should avoid using the term ‘non-mandatory’ to describe disclosures that entities are expected to include to meet the overall and specific objectives, as the term ‘non-mandatory’ may be inappropriately understood to mean optional.

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