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June 6, 2019

EFRAG issues draft comments on IASB exposure draft

The European Financial Reporting Advisory Group (EFRAG) has issued a draft comment in response to the IASB's Exposure Draft ED/2019/2 Annual Improvements to IFRS Standards 2018-2020 and seeks constituents' views on the proposals.

EFRAG generally agrees with the proposals in the exposure draft and considers that the minor changes proposed will improve the consistency and understandability of the IFRS standards concerned. However, EFRAG proposes that:

  • Issue 2: IAS 39 Financial Instruments: Recognition and Measurement be amended in the same way as the amendment proposed to IFRS 9 Financial Instruments; and
  • Issue 3: additional guidance to be added to IFRS 16 Leases on where the reimbursement of leasehold improvements may be considered as a lease incentive. In EFRAG’s view, further clarification of when the reimbursement of leasehold improvements by the lessor constitute a lease incentive under IFRS 16 is required to remove any future potential for confusion.

The letter is intended to contribute to the IASB’s due process and does not necessarily indicate the conclusions that would be reached by EFRAG in its capacity as advisor to the European Commission on endorsement of definitive IFRS Standards in the EU and European Economic Area.

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