ASCG comments on IASB ED/2019/7

On 30 September 2020, the ASCG sent their comment letter on the IASB ED/2019/7 General Presentation and Disclosures to the IASB.

The ASCG is clearly supportive of the IASB’s objective to increase comparability between entities and over time as regards reporting performance and providing corresponding disclosures. It is evident that IAS 1 in its current form does not provide sufficiently robust requirements for key information about an entity’s performance to be reported in a way that was consistent to the reporting of other entities. Many of the proposed requirements seem appropriate and are supported by us; for some, we provide specific comments that we hope will contribute to improve the proposals further.

Notwithstanding our general support, in our comment letter, we also flag areas where we believe that the proposals:

• Will likely not yield the desired outcome as the respective requirements are not articulated sufficiently clear for them to be understandable, auditable and enforceable and contributing to consistent application and, hence, limit the potential to increase relevance;
• Are based on false or incomplete assumptions as to what the today’s IT systems and landscapes in entities can and cannot provide for, thus potentially leading to a substantially different cost-benefit assessment;
• Will likely yield a greater comparability in the statement of profit or loss, but at the price of reducing understandability by not proposing similar changes to the statement of cash flows where this was feasible (and, as we see it, warranted and appropriate).

Details are outlined in the ASCG comment letter, which is available on the ASCG’s website.