EFRAG opposes IASB proposals for new Derecognition model

15 June 2009

The focus of the IASB’s work should be to address the crisis-related issues arising from the existing model. Improving disclosure requirements should be the priority for now, EFRAG argues and strongly opposes the Alternative Approach.

The focus of the IASB’s work on derecognition should be to address the crisis-related issues arising from the existing derecognition model. Improving disclosure requirements should be the priority for now, EFRAG argues.

 

EFRAG has significant reservations about the proposals for a new derecognition model. EFRAG notes that while that approach has conceptual merits, it goes far beyond the crisis-related issues and incremental changes needed. EFRAG is therefore strongly against the Alternative Approach being implemented at this time. 

 

EFRAG points out that a more comprehensive piece of work on derecognition needs to be done that would need to address at a conceptual level such issues as the asset definition, the unit of account, the role of risks and rewards and the purpose of the balance sheet employing a comprehensive debate and field testing.

 

Deadline for comments is 9 July 2009.

 

The document can be downloaded below 


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