FYI Article – Improving Disclosures: The First Step
Disclosure overload is a challenge recognized by many in today’s financial reporting world. To respond to this challenge, the International Accounting Standards Board (IASB) started a multi-part Disclosure Initiative.
As a first step towards improving the effectiveness of disclosures in financial reporting, the IASB issued narrow-scope amendments to IAS 1 Presentation of Financial Statements that are effective for annual periods beginning on or after January 1, 2016.
- clarify the existing presentation and disclosure requirements in IAS 1, including the presentation of line items, subtotals and notes; and
- provide guidance to assist entities to apply judgment in determining what information to disclose, and how that information is presented in their financial statements.
Perspectives of the Group
The IFRS Discussion Group, a committee of the Accounting Standards Board, discussed the main aspects of the amendments at its May 14, 2015 meeting.
Group members noted that it is important for an entity to identify redundant information and determine what is relevant or material to disclose in the financial statements to improve the understandability for users. They also recognized that there may be some concerns when it comes to making changes to the information disclosed. However, auditors, preparers and representatives from the Canadian Securities Administrators provided their views, each sharing their own unique perspective and experience to encourage the application of professional judgment.
Other Application Issues
The Group discusses IFRS application issues on a wide range of topics. If you have an issue that you would like to submit, see the submission requirements. For other discussions, check out the Group’s searchable database for past topics, or come to an upcoming meeting.
Davina Tam, CPA, CA
Principal, Accounting Standards Board
Phone: +1 (416) 204-3514