Global Standards for the world economy

Friday 18 October 2019

Banner graphic

Project news


The Principles of Disclosure project was discussed at the April IASB meeting

 29 April 2015


The IASB met on 29 April to discuss the Principles of Disclosure and Materiality projects as part of its Disclosure Initiative.

Materiality

The IASB reviewed the due process steps taken in the project. All thirteen IASB members present confirmed that they are satisfied that the IASB has completed all of the necessary due process steps to date and agreed that:

  1. a limited Basis for Conclusions should be issued with the Exposure Draft of a proposed Practice Statement Application of materiality to financial statements; and
  2. a comment period of 120 days is sufficient.

The IASB therefore instructed the staff to commence the balloting process for the Exposure Draft. No IASB members indicated that they intend to dissent from its publication.

Agenda Paper 11B: Aligning the definition and additional paragraphs for IAS 1

The IASB tentatively decided that a general disclosure Standard (such as IAS 1 Presentation of Financial Statements or a replacement Standard) should include proposed amendments to the definition of materiality and clarifying paragraphs on the key characteristics of materiality.

Twelve of the thirteen IASB members present agreed with this decision and one disagreed.

Principles of Disclosure

Agenda Paper 11C: Aggregation and summarisation of information

The IASB tentatively decided that the Principles of Disclosure Discussion Paper should include proposed amendments to the materiality and aggregation section of IAS 1 Presentation of Financial Statements. That section would be eventually be included in a general disclosure Standard (such as IAS 1 or a replacement Standard). Those amendments would provide additional guidance on:

  1. when an item should be separately presented in a primary financial statement or in the notes; and
  2. how much detail should be disclosed in the notes with regard to a specific disclosure requirement.

Twelve of the thirteen IASB members present agreed with this decision and one disagreed.

Agenda Paper 11E: Content of the notes

The IASB tentatively decided that a general disclosure Standard (such as IAS 1 or a replacement Standard) should include:

  1. a description of the role of the notes; and
  2. a central set of disclosure objectives built on the objective of Financial Statements and the role of the notes.

In addition, the IASB tentatively decided that the Discussion Paper should include two approaches for developing these objectives, either focusing on:

  1. the different types of information disclosed in the notes; or
  2. how users commonly assess the prospects for future net cash inflows to an entity and management’s stewardship of that entity’s resources.

Twelve of the thirteen IASB members present agreed with this decision and one disagreed.

Agenda Papers 11F: Drafting of disclosure requirements

The IASB tentatively decided to field test a proposed new approach to drafting the disclosure requirements for Standards to be included in the Principles of Disclosure Discussion Paper, with particular reference to:

  1. IAS 16 Property, Plant and Equipment as discussed in Agenda Paper 11G; and
  2. IFRS 3 Business Combinations as discussed in Agenda Paper 11H.

The IASB plans to field test the proposed approach with preparers, auditors, regulators and users in different jurisdictions, prior to publication of the Discussion Paper.

All thirteen IASB members present agreed with this decision.

Next steps

At its May 2015 meeting, as part of the Principles of Disclosure project, the IASB plans to discuss:

  1. Accounting policies (follow-up);
  2. Review of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors;
  3. Presentation on the face or in the notes; and
  4. Non-IFRS Information (follow-up).

Related information