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Disclosure Initiative - Principles of Disclosure


Project History

This research project is part of the Disclosure Initiative project, which is a broad-based initiative, exploring how disclosures can be improved in the financial statements. The objective of the Principles of Disclosure research project is to identify disclosure issues and develop new, or clarify existing, disclosure principles in IFRS Standards, with the aim of:

  1. Helping entities exercise better judgment and communicate information more effectively;
  2. Improving the effectiveness of disclosures for the primary users of financial statements; and
  3. Assisting the IASB develop and improve disclosure requirements in IFRS Standards.

IASB Discussion Paper

The IASB published the Discussion Paper DP/2017/1 Disclosure Initiative-Principles of Disclosure ('IASB DP') on 30 March 2017, with comments requested by 2 October 2017.

The IASB DP considers the existing requirements in IAS 1 Presentation of Financial Statements as a starting point with a view to either making amendments to IAS 1 or creating a new disclosure standard to replace parts of IAS 1.

EFRAG/ANC/FRC Discussion Paper

Information on the Discussion Paper Towards a Disclosure Framework for the notes, published in July 2012 by EFRAG in cooperation with the ANC and FRC, can be found at the following project site:

Proactive - A Disclosure Framework for the notes of the financial statements

EFRAG's comment letter

In order to provide constituents with the maximum amount of time possible to consider the IASB DP, the EFRAG Board undertook a two-stage process in seeking the views of constituents:

  • On 5 May EFRAG published preliminary responses to the questions in the IASB DP. The preliminary consultation document reflected the views of the EFRAG Technical Expert Group and was reviewed by the EFRAG Board as a basis for an initial public consultation. 
  • On 8 June 2017, EFRAG published a draft comment letter, which superseded the preliminary consultation document. EFRAG requested comments no later than 11 September 2017.

EFRAG conducted various outreach activities during the IASB DP's consultation period and considered the input received in its final comment letter. Below is list of all the events.

LocationOrganisersDateAttendanceLink to event
DenmarkDASC, DI and EFRAG14 June 201730here
Norway (User)EFFAS, NFF, NASB and EFRAG15 June 201715here
NorwayNASB and EFRAG 15 June 201725here
Belgium (User)EFFAS, ABAF/BVFA, EFRAG and IASB3 July 201724here
UKUK FRC and EFRAG4 July 201750here
LithuaniaLithuanian Ministry of Finance, Lithuanian Accounting Authority and EFRAG5 September 201730here
FranceANC and EFRAG6 September 201730here
GermanyASCG, AFRAC, Swiss FER and EFRAG11 September 201710here
PolandPASC, AAP, NCSA and EFRAG12 September 201770here
Italy (User)AIAF, EFFAS, OIC, EFRAG and IASB18 September 201725here

On 12 October 2017, EFRAG published the final comment letter.

In the final comment letter EFRAG fully supports the aims of the IASB's Principles of Disclosure project. EFRAG also agrees with the description of the 'disclosure problem' insofar as it is acknowledged that the problem is multifaceted, includes behavioural aspects and that the requirements in IFRS Standards are not the only root cause. EFRAG considers that, in the next steps of the project, a high priority should be given by the IASB to a comprehensive review of standards-level requirements. The review should, in particular, aim to identify and remove any disclosure requirements that are disproportionate or redundant.

Lastly, EFRAG regrets that a number of other issues identified in its 2012 Discussion Paper Towards a Disclosure Framework for the Notes are not addressed in greater depth, in particular  the boundaries of the financial statements  and the effects of technology on Financial Reporting.

Detailed responses to the questions contained in the IASB DP are included in EFRAG's final comment letter here.

On 15 November 2017, EFRAG published a feedback statement summarising the comments received in response to its draft comment letter and how they had been considered in the drafting of its final coment letter.  

At is March 2018 meeting, the IASB decided to perform  targeted Standards-level review of disclosure requirements. Specifically, the IASB tentatively decided to:

  • develop guidance for the IASB itself to use when developing and drafting disclosure requirements.;
  • identify one or two IFRS Standards on which to test the guidance developed for the Board  The objective of applying the guidance to the Standard(s) will be to improve their disclosure requirements to help stakeholders improve the usefulness of disclosures provided to the primary users of financial statements.

See EFRAG's project here.

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