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Following the endorsement last year of IFRS 8 Operating Segments, it was decided that in future more extensive work on the costs and benefits of all new or revised Standards and Interpretations needs to be carried out as part of the endorsement process.
In the case of Standards and Interpretations for which EFRAG has already given its endorsement advice to the European Commission, that work will be carried out by the European Commission. That was why the European Commission has recently been consulting publicly on IFRIC 12 Service Concession Arrangements and IAS 23 Borrowing Costs.
In the case of other Standards and Interpretations, EFRAG will carry out the additional work necessary. With that in mind, EFRAG is today issuing a request for comments on its initial assessment of the costs and benefits of IAS 1 (Revised) Presentation of Financial Statements and IFRIC 14 IAS 19 The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction.
To summarise, the results of the initial assessment of IAS 1 (Revised) are that IAS 1 (Revised) will:
(a) involve preparers incurring some year one costs—in order to read, understand and implement the new requirements—but that those costs will be insignificant;
(b) not involve preparers incurring significant incremental ongoing costs; and
(c) involve users incurring only insignificant incremental year one or ongoing costs.
The results of the initial assessment of IFRIC 14 were very similar, in that the assessment was that IFRIC 14 will:
(a) involve preparers incurring some year one costs—in order to read, understand and implement the new requirements—but that those costs will not be significant;
(b) not involve preparers incurring significant incremental ongoing costs; and
(c) not involve users incurring any incremental year one or ongoing costs.
It is on these conclusions and the analysis that lies behind them that EFRAG is primarily seeking comment at this stage.
EFRAG has also been assessing IAS 1 (Revised) and IFRIC 14 against the criteria for endorsement set out in Regulation (EC) No 1606/2002. Although that assessment has not yet been finalised, EFRAG’s near-final conclusion is that neither IAS 1 (Revised) nor IFRIC 14 is contrary to the true and fair principle and that both meet the criteria of understandability, relevance, reliability and comparability. In relation to these near-final conclusions EFRAG is inviting final comments on significant matters.
Purely for technical reasons, both papers are include in one zip file, which can be downloaded below. Alternatively, the projects and papers can be access following the links included in the text above.
Comments are invited by the end of business on Friday 14 March 2008. |
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