In December 2012, the IASB published for comment the Exposure Draft ED/2012/5 Clarification of Acceptable Methods of Depreciation and Amortisation—Proposed amendments to IAS 16 and IAS 38. The comment period ended on 2 April 2013.
At the July 2013 and September meetings, the Interpretations Committee was presented with a summary and an analysis of the 98 comment letters received on the Exposure Draft. The members of the Interpretations Committee expressed mixed views on the proposed amendments. However, they agreed that the focus of the amendments should remain on the principle that the method used for depreciation or amortisation should reflect the expected pattern of consumption of the future economic benefits embodied in the asset. Consequently, the Interpretations Committee recommended that the IASB should finalise the amendment to IAS 16 and IAS 38.
At the October 2013 meeting the IASB discussed the concerns expressed by the members of the Interpretations Committee and their recommendations.
The IASB members expressed mixed views on prohibiting the use of revenue data as a proxy for determining the pattern of consumption of economic benefits. Consequently the IASB asked for revisions to be made to the amendment.
The staff will bring the revised wording to a future IASB meeting
Read the October IASB Update.