International accounting

IFRS financial reporting requires consistent foundation

The International Accounting Standards Board (IASB) issued on the 18 of July 2013 for public comment the Discussion Paper DP/2013/1 “A Review of the Conceptual Framework for Financial Reporting” (PDF). With this Discussion Paper the IASB aims for obtaining initial views and comments on relevant issues that the IASB should consider as it revises and amends an Exposure Draft (ED) of an updated Conceptual Framework. The IASB is intending to publish the ED in the second half of the year 2014. The GDV considers the proposals and amendments in the Discussion Paper as a suitable basis for further discussion on the Conceptual Framework for IFRS financial reporting.

The GDV supports the position that financial reporting requirements should consider the business model of entities and confirms the relevance of performance reporting, i.e. the relevance of an appropriate presentation of the underlying performance in the income statement. For these reasons the GDV accentuates the need for adequate requirements to reflect the economic results of the stable and long-term oriented business model of insurers. The consistent use of the other comprehensive income presentation (i.e. ‘OCI solution’) in financial statements is considered by the GDV as an essential element to achieve a meaningful income statement. In general, consistency of the Conceptual Framework and the requirements in the particular IFRS standards is desirable.

Besides that, the GDV requires an extended period of calm, after the finalisation of the key standard projects (e.g. IFRS 4 Insurance Contracts and IFRS 9 Financial Instruments) in the near future. The stage of constant changes is not desirable from the perspective of German insurers. Finally, the IASB needs to urgently address the deep concerns of the constituents regarding the ‘information overload’ within IFRS financial statements.

The GDV’s complete comment is available in the download section.


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IFRS financial reporting requires a consistent foundation

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