EFRAG's endorsement advice letter to the EC about adoption of amendments to IFRS 1

06 June 2012

EFRAG has completed its due process regarding Government Loans (Amendments to IFRS 1), and has submitted its Endorsement Advice Letter and Effects Study Report to the European Commission. EFRAG supports Amendments to IFRS 1, and has concluded that they meet the technical requirements of endorsement.

The Amendments deal with loans received from governments at a below market rate of interest and their objective is to give first-time adopters of IFRSs relief from full retrospective application on transition to IFRSs. This relief is the same as the one which was given to existing preparers of IFRS financial statements in 2008 when IAS 20 'Accounting for Government Grants and Disclosure of Government Assistance' was amended.

The Amendments become effective for annual periods beginning on or after 1 January, 2013. Earlier application is permitted.

EFRAG has carried out an evaluation of the Amendments. As part of that process, EFRAG issued its initial assessment for public comment and, when finalising its advice and the content of this letter, it took the comments received in response into account. EFRAG’s evaluation is based on input from standard-setters, market participants and other interested parties, and its discussions of technical matters are open to the public.

EFRAG supports the Amendments and has concluded that they meet the requirements of the Regulation (EC) No 1606/2002 of the European Parliament and of the Council on the application of international accounting standards in that they:

For the reasons given above, EFRAG is not aware of any reason to believe that it is not conducive to the European public good to adopt the Amendments and, accordingly,EFRAG recommends their adoption.

Press release

Letter


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