The Annual Improvements Project considers the narrow in scope amendments to IFRSs in areas which needs clarifying or correcting.
Those amendments do not propose a new principle or a change to the existing pronciple.
Issues submitted by constituents for consideration within the annual improvements process are considered and discussed by the IFRS Interpretations Committee and by the IASB.The IASB intends to publish
an omnibus ED once a year.
On 3 May 2012, the IASB published for public comment the exposure draft containing the proposed amendments to eleven IAS/IFRS under its annual improvements projects.
The IASB requests for comments on the exposure draft by 5 September 2012.
EFRAG issued its draft comment letter in June 2012 where it agreed with most proposals in the ED and with the objective they were trying to achieve but it is concerned about the amendments to:
1) IFRS 3: EFRAG believes that the IASB should always propose consequential amendments to IAS 39 Financial Instruments: Recognition and Measurement and reiterates its request to amend IAS 39 to consider the accounting for own credit risk on financial liabilities measured at fair value in IFRS 9 Financial Instruments;
2) IAS 12: EFRAG appreciates IASB’s responsiveness to this practice issue, but has concerns about the wider implications of the proposed amendments in other circumstances. Accordingly, EFRAG asks whether constituents are aware of any unintended consequences that the application of this amendment might have.
After having consulted its constituents, EFRAG issued in September 2012 its final comment letter where it agreed with most proposals in the ED and with the objective they are trying to achieve but it was still concerned about the amendments to IFRS 3. In addition, regarding the amendments to IAS12, EFRAG understood that the objective of the amendments is to clarify the present wording in the standard. However, EFRAG had in its due process collected evidence that different understandings of the basic mechanics of IAS 12 may lead to different interpretations of the current requirements. Furthermore the amendment is triggered by a specific and particular request while the amendments are to be implemented more widely. Therefore, EFRAG encouraged the IASB to perform a thorough analysis of the consequences before making the decision whether to finalise the proposed amendments. If so, the Board should improve the drafting of the amendments so that they will be understood consistently.
In addition, EFRAG believed the proposed amendments increase the already lengthy disclosures required by IFRSs. Therefore, it believes that the IASB should perform a specific assessment before proposing future amendments to IFRSs.
Click here to access the IASB project page here.