IASB Urged to Be Cost Consciousness in IFRS Amendment
The International Financial Reporting Standard Experts Forum (IFRSEF) Nigeria has called on the International Accounting Standard Board (IASB) to pay attention to peculiar problems of Nigeria and emerging markets in general in its current effort to amend primary financial statements.
It gave the advice in a statement.
The IASB is responsible for issuing the International Financial Reporting Standard (IFRS) which Nigeria and some other emerging markets had adopted. Recently, IASB issued an Exposure Draft on primary financial statements inviting comments from members of the public to enable it amend the statements.
Primary financial statements are statement of profit or loss and statement of financial positions and their notes.
The amendment if effected would mean that the way companies in Nigeria present their income statement and statement of financial position would change.
“Companies are likely to incur heavy cost to implement the new changes. Such costs may include training cost for accountants and audit staff and investment to update accounting system to be able to generate financial statements that comply with the amendment,” the statement added.
The call for comment on the exposure draft ended on September 30, 2020 and organisations that submitted comments to IASB included Accountancy Europe, America Accounting Association, Japanese Bankers Association, IATA Industry Accounting Working Group, Saudi Organization for Certified Public Accountants, New Zealand Accounting
Standards Board, CPA Australia, European Securities and Markets Authority (ESMA), Accounting Standards Board of Japan (ASBJ), New York State Society of Certified Public Accountants, The Institute of Chartered Accountants of India, The Swedish Financial Reporting Board, Korea Accounting Standards Board, Johannesburg Stock Exchange Ltd (JSE), South African Institute of Professional Accountants, Financial Reporting Council, UK among others.
However, a copy of IFRSEF response showed that the organisation has approached its response from cost benefit analysis taking into consideration the peculiar circumstances of Nigeria and emerging markets in general. Specifically, where IASB asked for other comments, IFRSEF advised was: “We wish to draw attention to ambiguity, complexity and lack of clear definition of certain proposals especially main business activity.
“We are also concerned with requirement for additional disclosures that do not contain new information and are not useful information to providers of financial capital.
“The effects of ambiguity and additional disclosures that are not useful are increased implementation costs especially in emerging markets.”