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24 September 2009

EFRAG comments on IASB ED 2009/11 Improvements to IFRSs 2009

EFRAG agrees with all the changes proposed by the ED except for the amendment to IAS 27 which clarifies that investments in subsidiaries, jointly controlled entities and associates entities should only account for changes in the fair value.

To summarise, IASB agrees in principle with all the proposals in the ED, although IASB sometimes raises detailed issues or sees a need for some rewording or for an additional amendment to make the issue clearer.

The only exception to this is that we do not agree with all the changes being proposed to IAS 27 Consolidated and Separate Financial Statements (ie Issue 10). This proposal is not explained in the Basis for Conclusions, although EFRAG understands that the IASB considers the amendment to be a clarification of what was always the intention. However, it is IASB understanding that the existing wording of paragraph 38(b) of IAS 27 is widely interpreted by those who apply IFRS to mean that investments falling within the scope of the paragraph can be accounted for either at fair value through profit or loss or at fair value through OCI. The proposal will, as a result, have the effect of narrowing down the accounting choice available under existing IFRS. IASB is not convinced it is appropriate to restrict the way in which an entity applies IAS 39 to such investments. EFRAG‘s draft comment letter on the ED of Improvements to IFRSs 2
Deadline for comments 1 November 2009

© EFRAG - European Financial Reporting Advisory Group

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