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Disclosure Initiative - Amendments to IAS 1


The objective of this project is to address concerns raised during the Agenda Consultation 2011, in research carried out for the IASB and during the Financial Reporting Disclosure Discussion Forum and the related survey. The project consists of narrow scope amendments to clarify existing requirements in IAS 1 Presentation of Financial Statements. The aim of the amendments is to avoid a too strict interpretation of IAS 1.


The IASB Exposure Draft

On 25 March 2014, the IASB issued an exposure draft that proposes narrow-focus clarifying amendments to IAS 1 to address some of the concerns expressed about existing presentation and disclosure requirements and to ensure entities are able to use judgement when preparing their financial statements. The amendments relate to materiality, order of the notes, subtotals, accounting policies and disaggregation.


The EFRAG Comment Letter

On 11 April 2014, EFRAG published its draft comment letter. In its letter, EFRAG welcomed the Disclosure Initiative project set up by the IASB in 2013 that aims to review the disclosure requirements in existing Standards and to develop principles for disclosures in the notes. Therefore, EFRAG supported this short-term project to change some of the terminology in IAS 1 Presentation of Financial Statements that may have been interpreted too strictly. In EFRAG’s view, this should enable entities to exercise more judgement in presenting and disclosing information and hence result in improving the quality and the relevance of disclosures in the notes to the financial statements. However, EFRAG suggested a number of improvements in the wording of the proposed amendments in the ED.

On 23 May 2014, EFRAG decided to extend its own comments deadline until 20 June 2014 to allow all interested stakeholders more time to respond to its draft comment letter on the IASB's ED/2014/1 Disclosure Initiative (Amendments to IAS 1).

On 22 July 2014, EFRAG published its final comment letter.


The Amendments

On 18 December 2014, the IASB issued amendments to IAS 1, thereby marking the completion of the five, narrow-focus improvements to disclosure requirements that the IASB had identified following its 2013 Discussion Forum.


The EFRAG Endorsement Advice

In February 2015, EFRAG issued its draft endorsement advice in which EFRAG concluded that the Amendments satisfy all criteria for EU endorsement and therefore recommended their endorsement.

After having considered feedback from its constituents, EFRAG Board approved a final endorsement advice, through the written procedure, on 18 May 2015.

EFRAG published its final endorsement advice on 19 May 2015 where it 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 Appendixes Assessing whether the Amendments meet the Technical Requirements for Endorsement and Assessing whether the Amendments are conducive to the European Public Good.

On 18 December 2015, the European Commission endorsed Amendments to IAS 1 Presentation of Financial Statements entitled Disclosure Initiative. The amendments aim to improve the effectiveness of disclosure and to encourage companies to apply professional judgement in determining what information to disclose in their financial statements when applying IAS 1. Each company shall apply the amendments, at the latest, as from the commencement date of its first financial year starting on or after 1 January 2016.

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