On or about 1 August 2019, the International Accounting Standards Board (IASB) has proposed amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2 Making Materiality Judgements to assist companies in providing accounting policy disclosures to users of financial statements.
IAS 1 requires companies to disclose their ‘significant’ accounting policies.
The IASB proposes to replace the reference to “significant” with a requirement to disclose “material” accounting policies to clarify the disclosing information threshold.
The proposals state that information about an accounting policy is material if it can influence financial statement users’ decisions about the company, when it is considered together with other information included in a company’s financial statements.
The IASB has also proposed to add guidance to IAS 1 to assist companies in understanding what makes an accounting policy material and to update IFRS Practice Statement 2 by adding further explanations and examples to assist companies in applying the concept of materiality in making decisions regarding accounting policy disclosures.
The IASB is asking stakeholders to comment on the proposed amendments and is particularly interested in comments on whether the examples proposed for inclusion in the Practice Statement are helpful.
The Exposure Draft Disclosure of Accounting Policies is open for comments till 29 November 2019.
Source: IFRS website, 1 August 2019