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25/03/2016 - EFRAG's comment letter and feedback statement on the IASB's ED/2015/9 Transfers of Investment Property

EFRAG issued its comment letter and feedback statement on the IASB's Exposure Draft ED/2015/9 Transfers of Investment Property: Proposed Amendment to IAS 40.

​On 19 November 2015, the IASB issued the Exposure Draft ED/2015/9 Transfers of Investment Property: Proposed Amendment to IAS 40 (the ED). The IASB proposes to amend IAS 40 Investment Property in order to:

  1. reinforce the principle that an entity should transfer property into, or out of, investment property when, and only when, there is evidence of a change in the use of such property; and

  2. re-characterise the list of circumstances set out in paragraphs
    57(a)–(d) as a list of examples of evidence that a change in use has occurred.

The IASB proposes to apply the amendment retrospectively in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors.

In its comment letter, EFRAG welcomes and supports the amendment, and believes it will reduce divergence in practice and, therefore, improve the quality of financial reporting under IFRS in regard to investment properties.

The feedback statement describes the main comments received by EFRAG in response to the draft comment letter and how these comments were considered by EFRAG in finalising its comment letter to the IASB.