Costs for users EFRAG has carried out an initial assessment of the cost implications for users resulting from the Amendments. Overall, initial assessment is that the Amendments, in general, will not result in significant increased costs to users. Still, when an entity opts to change from or value’ to method’ and applies that change retrospectively, users ‘cost’ ‘fair ‘equity are likely to incur some costs related to updating analyses or databases for comparative information. Users will also have to assess the impact of that change on the financial performance and position of the company. Those users, if any, who prefer to restate the amounts included in each category of investment with the objective of obtaining information in a format’ may ‘comparable have to incur additional ongoing costs as a result of the introduction of an additional accounting policy option. Benefits for preparers and users EFRAG has carried out an initial assessment of the benefits for users and preparers resulting from the Amendments EFRAG’s initial assessment is that the Amendments will not result in significant benefits for all preparers, i.e., it is likely to be neutral for many preparers. However, EFRAG acknowledges that preparers might choose to use the equity method to account for investments in subsidiaries, joint ventures and associates in the separate financial statements when they expect benefits from using that option (e.g. for local compliance purposes) to exceed the costs. Users are likely to benefit from an accounting policy option that allows the incorporation, over time, of the results of an investee into the investor’s financial statements. Consequently, the use of the equity method provides timely, relevant and reliable information about the investment’s performance and economic value to users of separate financial statements. Overall, EFRAG’s initial assessment is that users are likely to benefit from the Amendments, despite the decreased comparability induced by the accounting policy options, as the information resulting from the Amendments will provide relevant and reliable information about the investment’s performance and economic value. Conclusion EFRAG’s overall initial assessment is that the benefits of the Amendments are likely to outweigh the costs associated with them. Appendix 4 Dissenting opinions One EFRAG TEG member dissents from recommending the endorsement of the Amendments. Due to the recent reform, EFRAG Board will be responsible for all EFRAG positions after considering the technical advice provided by the EFRAG Technical Expert Group and the outcome of EFRAG’s due process. Therefore, any views dissenting
Costs for users EFRAG has carried out an initial assessment of the cost implications for users resulting from the Amendments. Overall, initial assessment is that the Amendments, in general, will not result in significant increased costs to users. Still, when an entity opts to change from ‘cost’ or ‘fair value’ to ‘equity method’ and applies that change retrospectively, users are likely to incur some costs related to updating analyses or databases for comparative information. Users will also have to assess the impact of that change on the financial performance and position of the company. Those users, if any, who prefer to restate the amounts included in each category of investment with the objective of obtaining information in a ‘comparable format’ may have to incur additional ongoing costs as a result of the introduction of an additional accounting policy option. Benefits for preparers and users EFRAG has carried out an initial assessment of the benefits for users and preparers resulting from the Amendments EFRAG’s initial assessment is that the Amendments will not result in significant benefits for all preparers, i.e., it is likely to be neutral for many preparers. However, EFRAG acknowledges that preparers might choose to use the equity method to account for investments in subsidiaries, joint ventures and associates in the separate financial statements when they expect benefits from using that option (e.g. for local compliance purposes) to exceed the costs. Users are likely to benefit from an accounting policy option that allows the incorporation, over time, of the results of an investee into the investor’s financial statements. Consequently, the use of the equity method provides timely, relevant and reliable information about the investment’s performance and economic value to users of separate financial statements. Overall, EFRAG’s initial assessment is that users are likely to benefit from the Amendments, despite the decreased comparability induced by the accounting policy options, as the information resulting from the Amendments will provide relevant and reliable information about the investment’s performance and economic value. Conclusion EFRAG’s overall initial assessment is that the benefits of the Amendments are likely to outweigh the costs associated with them. Appendix 4 Dissenting opinions One EFRAG TEG member dissents from recommending the endorsement of the Amendments. Due to the recent reform, EFRAG Board will be responsible for all EFRAG positions after considering the technical advice provided by the EFRAG Technical Expert Group and the outcome of EFRAG’s due process. Therefore, any views dissenting
EFRAG_Invitation_to_comment_on_the_Amendments_to_IAS_27+%281%29.docx