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Annual Improvements to IFRSs - 2012-2014 cycle


In January 2013 the Trustees approved the updated IASB and IFRS Interpretations Committee Due Process Handbook (the 'updated Due Process Handbook').

The IASB assesses issues against the following criteria when deciding whether an issue should be addressed by amending Standards within the Annual Improvements project:

(a) The amendment has one or both of the following characteristics:

(i) clarifying the wording in a Standard-"Clarifying a Standard involves either replacing unclear wording in existing Standards or providing guidance where an absence of guidance is causing concern. Such an amendment maintains consistency with the existing principles within the applicable Standard and does not propose a new principle or change an existing principle" (see paragraphs 6.11-6.12 of the updated Due Process Handbook); or

(ii) correcting relatively minor unintended consequences, oversights or conflicts between existing requirements of Standards-"Resolving a conflict between existing requirements of Standards includes addressing oversights or relatively minor unintended consequences that have arisen as a result of the existing requirements of Standards. Such amendments do not propose a new principle or a change to an existing principle" (see paragraphs 6.11 and 6.13 of the updated Due Process Handbook).

(b) Annual Improvements should be well-defined and narrow in scope. As a guide, if the IASB takes several meetings to reach a conclusion, it is an indication that the cause of the issue is more fundamental than can be resolved within the Annual Improvements process (see paragraphs 6.10 and 6.14 of the updated Due Process Handbook).

In December 2013, the IASB published an exposure draft with five proposed amendments to four IAS/ IFRS's for consideration under its annual improvements project cycle 2012-2014, inviting comments up to 13 March 2014.

In January 2014, EFRAG issued its draft comment letter and invited comments by February 2014.

After having consulted its constituents, in March 2014, EFRAG published its final comment letter in response to the ED.
In its comment letter, EFRAG agrees with most proposals in the ED. However, EFRAG is concerned about the proposed amendments to IAS 19 Employee Benefits. EFRAG considers that in some circumstances it is unclear if the proposals would result in an outcome that is consistent with the IASB's objectives (e.g. jurisdictions adopting stronger currencies of other countries, jurisdictions that have a deep market of high quality corporate bonds sharing a single currency with other countries which do not, and interactions with local requirements for post-employment benefit liabilities and on plan assets). Therefore, in EFRAG's view, the IASB - before finalising these proposals - should explain the objectives and the rationale in selecting and using a discount rate to measure post-employment benefit obligations so that constituents can exercise appropriate judgement in applying the requirements in paragraph 83 of IAS 19.

In October 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 and comments were requested by November 2014.

After having considered feedback from its constituents, EFRAG published its endorsement advice in February 2015 where it supports the adoption of the Amendments and recommends their endorsement. EFRAG's recommendation is explained in the letter to the European Commission and the accompanying Basis for Conclusions and Evaluation of the Costs and Benefits of the Amendments.

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