IASB Disclosure Project

The IASB has heard three main concerns from those who use and rely on information in financial statements prepared in accordance with IFRS Standards.   These are:
1.    Not enough relevant information
2.    Too much irrelevant information
3.    Ineffective communication of the information provided
These are collectively referred to as the “disclosure problem”.


In response it has instigated the “Disclosure Initiative”, a portfolio of separate projects aimed at addressing the disclosure problem arising from the application of specific standards.
A broad Discussion Paper was issued for consultation in 2017.  Following consideration of the responses the Board made a number of findings.  One of the most pertinent was that the prescriptive lists of required disclosures in some standards was driving reporting entities and their auditors to adopt a “check-list” approach.  Their focus was on compliance with the relevant list and not on whether material information was being effectively communicated.


The Board recognised that defining what is effective communication across the whole range of activities undertaken by users of IFRS is neither practical nor desirable.  Judgement is also required to establish what is or is not material information in different situations.  Accordingly it is  proposing to move towards a more principles based approach.  This involves clearly defining the required objective of any disclosures but allowing for different ways of achieving that objective by providing examples and guidance on ways in which tit may be achieved, rather than setting lists of prescriptive requirements.


It has decided the way ahead is to develop guidance for the Board to use in the development of new or amended disclosure requirements in individual standards.  It has also selected two “test standards” to which the guidance will be applied, IFRS 13 Fair Value Measurements and IAS 19 Employee Benefits.  These two were considered to contain must of the issues that contribute to the disclosure problem.


In March 2021 the Board issued an Exposure Draft of proposed amendments to IFRS 13 and IAS 19.  Comments were invited before 12 January 2022.


A copy of the Exposure Draft can be viewed on the link below.   While we generally welcome the proposed amendments to IFRS 13, we do have concerns at the suggestions that ANY uncertainty in a valuation is disclosed and that a range of "reasonably possible alternative" values is provided in all cases.  We believe that without qualification this will lead to more complex disclosures thus defeating the overall objective of the project.   A copy of our comment letter can also be seen below.

View IASB Exposure Draft

Basis for Conclusions

View our Comment Letter