EFRAG's Comment Letter on the IASB Exposure Draft ED/2019/6 Disclosure of Accounting Policies.

On 1 August 2019 the IASB issued the ED which proposes to
amend IAS 1 Presentation
of Financial Statements to require entities to disclose 'material' rather than 'significant' accounting policies. To support this amendment the IASB
also developed guidance and examples to illustrate the application
of materiality to accounting policy disclosures, both in IAS 1 and in IFRS
Practice Statement 2 Making Materiality Judgements.

EFRAG supports the proposal to replace the undefined reference
to 'significance' with the defined concept of 'materiality'. This, with other
Disclosure Initiative projects, may help entities to identify and disclose
accounting policies that provide material information to users and the
connection to the application of materiality to other information.

EFRAG suggests
that the IASB further clarifies that, in applying the principle of materiality,
an entity needs also to consider the accounting policies that are relevant to an
understanding of its financial statements taken as a whole, consistently with
Step 4 of the Materiality assessment process developed by the IASB.

EFRAG also notes
the possible inconsistencies of the proposed guidance with the existing
disclosure requirements in IAS 8 Accounting Policies, Changes in Accounting
Estimates and Errors regarding accounting policies choices and
changes.

Lastly, EFRAG welcomes the proposed guidance and examples to help entities determine when an
accounting policy is material and suggests some improvements.

The Comment Letter is available here​.​​