SOCPA Shares its Comments on IASB's Exposure Draft "Disclosure Requirements in IFRS Standards"
The IASB has issued an Exposure Draft containing guidance for disclosure requirements in IFRS standards and using a pilot approach in applying IFRS 19 and 13.
The purpose of this draft is to develop principles that will help IASB in building the disclosure requirements in each standard to achieve the goal of the disclosure requirements, which is to provide useful information to help users of financial statements in making decisions based on Financial Statements Information.
SOCPA, represented by its standards committee expressed its support in principle for the proposal, and the appropriateness of setting overall objectives for disclosure in each standard, but it also pointed out that this may lead to increase the diligence practiced by management with regards to the amount and type of information disclosed to meet the disclosure objectives. This according to SOCPA will make the application very challenging when dealing with auditors and regulators, especially since the draft sets general idea for the disclosure objectives without elaborating on the nature of the information required to meet those objectives and may lead entities to disclose minimum information from their point of view to meet the disclosure objective.
In addition, the application of the proposed approach may lead to a comparability problem with financial statements, because it leaves the company management to determine and judge what information it should disclose. Therefore, SOCPA has proposed reconsidering how entities can meet disclosure requirements and their goals and how to verify that they did.
SOCPA detailed remarks can be found by clicking here.