Proposed Amendments to IAS 1

The proposed amendments in the Exposure Draft (ED):

• clarify the materiality requirements in IAS 1, including an emphasis on the potentially detrimental effect of obscuring useful information with immaterial information
• clarify that IAS 1’s specified line items in the statement(s) of profit or loss and other comprehensive income and the statement of financial position can be disaggregated
• add requirements for how an entity should present subtotals in the statement(s) of profit or loss and other comprehensive income and the statement of financial position
• clarify that entities have flexibility as to the order in which they present the notes, but also emphasise that understandability and comparability should be considered by an entity when deciding that order
• remove potentially unhelpful guidance in IAS 1 for identifying a significant accounting policy.

The proposed amendments are part of the IASB’s Disclosure Initiative. The Disclosure Initiative itself is in part a reaction to the growing clamour over disclosure overload in financial statements. It consists of a number of projects, both short- and medium-term, and ongoing activities that explore how presentation and disclosure principles and requirements in existing Standards can be improved.

In our comment letter we express our full support for the IASB's Disclosure Initiative (a broad-based initiative to explore how disclosures in IFRS financial reporting can be improved) and its objectives. We recognise that the proposals in this ED are intended to achieve limited, short-term improvements and that the ED is one part of this larger initiative. In that context we generally support the ED's proposals and believe they focus on the right areas of IAS 1. We do however express some more detailed comments and suggestions in our letter in response to the detailed questions raised by the ED.