The IFRS IC has clarified its position on how quickly entities should implement its published agenda decisions.
Keywords: Mazars, Thailand, IFRS, IFRS IC, IFRIC, IASB
17 May 2019
First, it reminds entities that the process for publishing an IFRS IC agenda decision often provides new information that is useful in applying IFRSs and that was not otherwise available, which could therefore lead some entities to review their accounting policies.
It then goes on to state that entities that need to change an accounting policy as a result of an IFRS IC agenda decision would be entitled to sufficient time to consider and implement the change (for example, an entity may need to obtain new information or adapt its systems to implement a change).
As no further details are given on what constitutes ‘sufficient’ time, entities must make use of judgement to determine how much time is required to implement the accounting policy change.
In addition to this clarification in IFRIC Update, an article written by Sue Lloyd (the vice-chair of the IASB and chair of the IFRS IC) was published on the IASB’s website on 20 March 2019. In the article, Ms Lloyd clarifies that the change an entity needs to make to the accounting treatment of a transaction as a result of an IFRS IC decision is not necessarily the correction of an error (i.e. the previous accounting treatment was not an error simply because it was inconsistent with an agenda decision). She also states that the IFRS IC envisaged a period of months, rather than years, for implementing such an accounting policy change.
For more details, see the March issue of IFRIC Update and Sue Lloyd’s article.