EFRAG published its final comment letter on the IASB's ED/2012/2 Annual Improvements to IFRSs 2011-2013 Cycle, issued by the IASB on 20 November 2012. EFRAG agrees with most proposals in the ED but is concerned about two issues – amendment to IAS 40 and to IFRS 1.
EFRAG agrees with the amendment to IAS 40, which provides a short-term solution. However, the amendment leaves unaddressed broader issues – such as whether a single investment property is a business and the need for similar amendments to other standards (e.g. IAS 16 'Property, Plant and Equipment' and IAS 38 'Intangible Assets') – that should be considered as part of the post-implementation review of IFRS 3.
EFRAG agrees with the proposed amendment to IFRS 1 on the basis that it may reduce the diversity in practice and that dropping the issue at this stage might, in fact, create confusion. Nevertheless, EFRAG believes that in the future similarly minor issues should not result in an amendment to the standards or the Basis for Conclusions.
In addition, EFRAG believes that the IASB should refrain from making amendments to the bases for conclusions of standards, unless it wishes to correct outright errors. In EFRAG's view, amendments to bases for conclusions cannot take the place of actual standard setting. Furthermore, EFRAG would like to note that such amendments do not form part of the standards themselves and hence do not affect IFRSs as endorsed in the EU.
Press release
Final comment letter
© EFRAG - European Financial Reporting Advisory Group
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