IASB Reviews Group Financial Reporting Standards
The International Accounting Standards Board (IASB) is looking to obtain feedback from relevant stakeholders on three of its International Financial Reporting Standards (IFRS), to assess the ease of implementation, their usefulness to financial statements users, and unexpected costs associated with its application.
The feedback is an important part of the post-implementation review of the following standards:
· IFRS 10
· IFRS 11
· IFRS 12
The purpose of IFRS 10 Consolidated Financial Statements is to aid businesses in preparing group financials; IFRS 11 outlines the accounting for interests in arrangements such as joint ventures and joint operations; and IFRS 12 provides guidance regarding disclosing information in the notes to accounts relating to interests in other entities.
These standards have been applicable and effective for reporting periods starting on or after January 1, 2013.
IFRS 10 Consolidated Financial Statements provide businesses with a model for consolidation that identifies control as the basis for preparing consolidated financials for all business entities irrespective of their legal structure and type. The potential investigation areas include influence over an investee, the link between returns and influence; investment entities; and requirements related to accounting of transactions that causes change in ownership and partially acquiring a subsidiary that does not do any business.
IFRS 11 Joint Arrangements provides guidance with regards to accounting of interest in other business entities. This standard helps business entities in recognizing their obligations and rights resulting from these kind of arrangements. The potential investigation areas include classification of joint arrangements, collaborative arrangements that are not covered this accounting standard; and requirements for accounting of joint operations.
IFRS 12 Disclosure of Interests in Other Entities provides guidance regarding disclosing information relating to subsidiaries, associates, joint arrangements, and unconsolidated structured entities.
IASB chairman, Hans Hoogervorst, said that post-implementation reviews provides us with the opportunity to determine whether our standards actually do what they were meant to do. I encourage all the stakeholders to come forward and become a part of this process by giving us with their valuable feedback.
Following this review of the above mentioned standards, IASB said that it will summarize all its findings and state all the steps, if any, it plans on taking as a direct consequence of the review.
The deadline for feedback is May 10, 2021.