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17 June 2014

EFRAG requests comments on its draft study on amendments to IAS 16 and IAS 38


EFRAG has issued an invitation to comment relating to the endorsement for use in the EU of Clarification of Acceptable Methods of Depreciation and Amortisation - Amendments to IAS 16 and IAS 38 (the Amendments.)

In May 2014, the IASB issued Clarification of Acceptable Methods of Depreciation and Amortisation - Amendments to IAS 16 and IAS 38 (the Amendments).

The Amendments aim to clarify that the use of revenue-based methods to calculate the depreciation of an asset is not to be assumed appropriate because revenue generated by an activity that includes the use of an asset generally reflects factors other than the consumption of the economic benefits embodied in the asset.
The Amendments also clarify that revenue is generally presumed to be an inappropriate basis for measuring the consumption of the economic benefits embodied in an intangible asset. However, this presumption can be rebutted in certain limited circumstances.

The Amendments are effective for annual periods beginning on or after 1 January 2016, although entities are permitted to apply them earlier.

EFRAG has issued an Invitation to Comment relating to the endorsement of the Amendments for use in the European Union and European Economic Area. It is consulting both on its assessment of the amendments against the technical criteria for the endorsement in the EU and on its initial assessment of the costs and benefits that would arise from the implementation and application of the Amendments in the EU.

EFRAG’s initial assessment is that the Amendments satisfy the technical criteria for EU endorsement and EFRAG should therefore recommend their endorsement. 

Comments are requested by 17 July 2014.

Press release



© EFRAG - European Financial Reporting Advisory Group


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