Update on Principles of Disclosure project

On 21 March, the IASB published a Project Summary on its Principles of Disclosure project, following up on the Disclosure Initiative – Principles of Disclosure Discussion Paper published in March 2017. The Project Summary explains how stakeholders’ feedback on the Discussion Paper will be taken into account.

Keywords: Mazars, Thailand, IFRS, IASB, IAS 19, IFRS 13, EBIT

16 May 2019

Thus, the Board will not undertake the following activities, which stakeholders felt would not be effective in resolving the problems with financial disclosures:

  • developing centralised disclosure objectives, as these are unlikely to be specific enough to be effective;
  • developing principles of effective communication, as many respondents felt that these would be either too generic, or not necessary in any case, given that some entities have already improved their disclosures even without such principles. The Project Summary draws attention to the fact that the IASB has already published a document with examples of good practice in this regard, in October 2017 (Better communication in financial reporting – Making disclosures more meaningful);
  • developing guidance on the location of disclosures on accounting policies;
  • developing principles for the format of information and data disclosed in the notes;
  • developing guidance on the placement of ‘IFRS information’ outside the financial statements and ‘non-IFRS information’ within the financial statements.

Instead, the Board is pursuing the following activities:

  • a targeted review of the disclosure requirements in individual standards, starting with IAS 19 – Employee Benefits and IFRS 13 – Fair Value Measurement. This will also help the IASB to develop its own principles for drawing up disclosure requirements;
  • developing guidance on applying materiality judgements to accounting policy disclosures (on which an exposure draft is expected in a few months’ time);
  • considering some topics as part of the IASB’s separate project on primary financial statements (the roles of the primary financial statements and the notes; presentation of aggregates relating to EBIT, etc.; unusual or non-recurrent items; and presentation of performance measures);
  • considering the implications of technology for financial communication as part of the IFRS Foundation Technology Initiative.

The document is available on the IASB’s website.