ASCG comment letter to the IASB on ED/2018/1 Accounting Policy Changes

Today, we have submitted a comment letter to the IASB relating to the proposals in the ED/2018/1 Accounting Policy Changes (Proposed amendments to IAS 8).

In our comment letter, we support rethinking the accounting guidance for voluntary changes in accounting policy with respect to the existing requirement of having to apply such changes retrospectively. We support a relief from retrospective application on a cost-benefit basis as described in the ED, if the voluntary change results in an overall improvement of useful information to users of financial statements.

However, we do not support the IASB proposal to lower the threshold for retrospective applications only for a subset of voluntary changes in accounting policies, being those changes that can be linked to an existing agenda decision and explanatory documentation published by the IFRS Interpretations Committee in past. In our view, this distinction would be arbitrary and would also increase complexity of IFRS guidance.

Furthermore, we emphasize that the IASB should not be guided by the view that inconsistent application resulting from unclear authoritative guidance can be fixed through publishing additional non-authoritative guidance but should be address as part of the regular standard setting process.