EFRAG issues Draft Comment Letter ED/2021/3 Disclosure Requirements in IFRS Standards—A Pilot Approach (Proposed amendments to IFRS 13 and IAS 19)
14 May 2021
In March 2021, the IASB issued Exposure Draft Disclosure Requirements in IFRS Standards—A Pilot Approach. EFRAG has now published its Draft Comment Letter on the Exposure Draft.
In its Draft Comment Letter, EFRAG has welcomed the Exposure Draft and supported the objective of the project to improve the relevance of disclosures and to develop a more rigorous methodology for the IASB to define objective-based disclosure requirements.
However, EFRAG has raised a concern that absence of a list of minimum disclosure requirements, as proposed in the Exposure Draft, would expose preparers to second guessing. It would also make review of such disclosures and enforcement of the requirements more difficult for auditors and regulators. Therefore, EFRAG has noted that the success of the proposed approach depends on the IASB striking the correct balance between a tier of disclosures that are always required (that ensure a minimum level of comparability), and objectives to elicit additional entity-specific disclosures.
EFRAG has further encouraged the IASB to consider the interactions between the proposed approach and
- The role of the notes taken as a whole;
- The increasing use of technology and digital reporting;
- The application of the materiality concept; and
- The assessment of stewardship.
EFRAG’s Draft Comment Letter may be accessed here. Comments on the Draft Comment Letter are requested by 15 October 2021.