BDO Responds to ED/2018/1: Accounting Policy Changes – Proposed amendments to IAS 8

BDO has submitted its comment letter in response to the International Accounting Standard Board’s (IASB’s) Exposure Draft (ED) 2018/1: Accounting Policy Changes – Proposed amendments to IAS 8 issued in March 2018.

Summarising the answer to the questions posed in the ED, we:

• do not agree with the proposals, in particular the proposed introduction of an additional ‘cost/benefit’ analysis to determine whether retrospective restatement is required;
• appreciate that the proposals are intended to be helpful and assist with the tension between agenda decisions not forming part of the authoritative guidance and the approach taken by many securities regulators and others who view agenda decisions as determining a required accounting approach.  However, we believe that by introducing direct reference to agenda decisions in part of the authoritative literature this tension would, if anything, be increased rather than reduced; and
• believe that it would be appropriate for some limited changes to be made to the due process for agenda decisions.  These are the introduction of a higher threshold for the IFRS Interpretations Committee to approve an agenda decision, and a requirement for the Board to approve them on a ‘do not object’ basis.  Consideration might also be given to the timing of such Board approval, which could assist in dealing with the timing issue described in the Basis for Conclusions.

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