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Some jurisdictions in Europe either require or permit preparing separate financial statements under IFRS.
Those who apply IFRS to the separate financial statements have raised practical concerns about the relevance of some of the IFRS requirements because the focus of IFRS is generally on the preparation of consolidated financial statements. In the European Union and European Economic Area, under the Fourth Directive, IFRS are only mandated for listed consolidated financial statements with a member state option to apply IFRS for other reporting entities. The lack of adequate emphasis given to the separate financial statements in the development of IFRS have raised a number of significant concerns, not still effectively addressed, leading to different practices in the EU Members States.
The objective of this project is to determine whether IFRS is fit-for-purpose in satisfying the information needs of users of separate financial statements. If the answer to that question is negative, the project will proceed to consider what changes are necessary to ensure that IFRS is better aligned with the needs of users – given the particular needs and perspective of the separate financial statements.
The project was added to the EFRAG’s agenda in June 2011. The project is conducted in cooperation with the national standard setters of Italy (OIC), the Netherlands (DASB) and Spain (ICAC). At present, the project is in the planning stage.
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