The International Accounting Standards Board (IASB) has issued amendments to IAS 1, Presentation of Financial Statements, as part of its disclosure initiative, the last of five measures to improve the quality of presentation and disclosure in financial reports
The amendments to IAS 1 are designed to encourage companies to apply professional judgment in determining what information to disclose in their financial statements.
For example, the amendments make clear that materiality applies to the whole of financial statements and that the inclusion of immaterial information can undermine the value of financial disclosures.
The amendments clarify that companies should use professional judgment in determining where and in what order information is presented in the financial disclosures.
Hans Hoogervorst, chairman of the IASB said: ‘There is a real appetite for improving disclosure in financial reporting. While problems with disclosures cannot be solved by the IASB alone, we do have an important part to play. Today’s announcement shows that we intend to deliver on this challenge.’
The amendments to IAS 1 can be applied immediately, and become mandatory for annual periods beginning on or after 1 January 2016.
There is more information about the disclosure initiative here: http://go.ifrs.org/Disclosure-Initiative
