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IASB Annual Improvements Project 2011-2013 cycle

Description

Annual Improvements Project considers the narrow scope amendments to IFRSs in areas which need clarifying or correcting. Such amendments do not propose a new principle or a change to the existing principle.

Issues submitted by constituents for consideration within the annual improvements process are considered and discussed by the IFRS Interpretations Committee and by the IASB. It is the intention of the IASB to publish an omnibus ED once a year.

On 20 November 2012, the IASB published an exposure draft with four proposed amendments to IAS/ IFRS's for consideration under its annual improvements project cycle 2011-2013, inviting comments up to 18 February 2013.

In response to the IASB's request, EFRAG issued a Draft Comment Letter on 19 December 2012 seeking feedback from constituents up to 1 February 2013.

In its draft comment letter, EFRAG agreed with most proposals in the ED/2012/2 Annual Improvements to IFRSs 2011-2013 Cycle, but it expressed the position that the proposed amendment to IFRS 1 was unnecessary and was putting into question the purpose that annual improvements should serve.

In addition, EFRAG recommended that the IASB refrained from making amendments to bases for conclusions of the standards, unless it wished to correct outright errors. In EFRAG's view, amendments to bases for conclusions cannot take the place of actual standard setting. Furthermore, EFRAG noted that such amendments do not form part of the standards themselves and hence do not affect IFRS as endorsed in the European Union.

EFRAG was finally asking its constituents if they believed that the IASB should address any further amendments to IFRS 3 before commencement of its planned post-implementation review of the standards.

After consulting its constituents, EFRAG issued its final comment letter on 18 February 2013 where it agreed with most proposals in the ED but was concerned about the amendment to IAS 40. More specifically, EFRAG expressed the position that the amendment to IAS 40 provided a short-term solution without addressing the broader issues that had surfaced, such as whether a single investment property is a business and the need for similar amendments to other standards (e.g. IAS 16 Property, Plant and Equipment and IAS 38 Intangible Assets), that should be considered as part of the post-implementation review of IFRS 3.

Secondly, although EFRAG initially thought that the amendment to the basis for conclusions in IFRS 1 was unnecessary, it subsequently agreed with the proposed amendment to the basis for conclusions in IFRS 1. EFRAG nevertheless believed that in the future, similar minor issues should not result in amendments to the standard or the basis for conclusions.

In December 2013, the IASB has issued 'Annual Improvements 2011-2013 Cycle' which contains a collection of amendments to IFRSs, in response to four issues addressed during the 2011-2013 cycle.

In January 2014, EFRAG has issued an Invitation to Comment relating to the endorsement of the Amendments for use in the European Union and European Economic Area. It is consulting both on its assessment of the amendments against the technical criteria for the endorsement in the EU and on its initial assessment of the costs and benefits that would arise from the implementation and application of the Amendments in the EU.
EFRAG's initial assessment is that the Amendments satisfy the technical criteria for EU endorsement and EFRAG should therefore recommend their endorsement. Comments are requested by 3 March 2014.

On 12 March 2014, EFRAG completed its due process regarding the Annual Improvements to IFRSs 2011-2013 Cycle ('the Amendments') and has submitted its Endorsement Advice Letter and Effects Study Report to the European Commission. EFRAG supported the adoption of the Amendments and recommended their endorsement. EFRAG's recommendation is explained in the letter to the European Commission, and the accompanying Basis for Conclusions and the Effects Study Report on the costs and benefits of implementing the Amendments.

With Commission Regulation (EU) No 1361/2014 of 18 December 2014, The European Commission endorsed the Annual Improvements to IFRSs, 2011-2013 Cycle.

 

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