10/02/2015 - EFRAG's draft comment letter on the IASB's ED/2014/6 Disclosure Initiative (Proposed amendments to IAS 7)
- to disclose a reconciliation of the amounts in the opening and closing statements of financial position for each item for which cash flows have been, or would be, classified as financing activities in the statement of cash flows, excluding equity items; and
- to disclose information about the restrictions that may affect the decisions of an entity to use cash and cash equivalent balances, including tax liabilities that would arise on the repatriation of foreign cash and cash equivalent balances, when that information is relevant to understand the entity's liquidity risk.
EFRAG has not reached a consensus on whether it believes that the proposals in the ED are appropriate; and therefore, its Draft Comment Letter sets out different views and seeks input from constituents.
Regarding proposed disclosures on movements in debts, even though EFRAG agrees with the goal of providing users with a net debt reconciliation, some members are supportive of the changes as a useful first step in the right direction that can be made without triggering significant costs. However, others believe that the change is not bringing enough improvements to justify its costs.
Furthermore, the IASB is also holding a trial on the IFRS Taxonomy due process. Views are sought in the Exposure Draft about proposed changes to the IFRS Taxonomy due process that would see future amendments to the IFRS Taxonomy published together with the relevant Exposure Draft or final Standard. In its draft comment letter, EFRAG reiterates its view that the IFRS Taxonomy should not be integrated into the IASB standard setting process but kept as a separate activity of the IFRS Foundation, as it may take the IASB away from a principle based approach to standard setting, more particularly in the area of disclosures.
EFRAG requests comments by 16 April 2015.
The draft comment letter is available here: