Global Standards for the world economy

Saturday 21 January 2017

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Due process steps completed

Stage 1: Setting the agenda

In September 2001 the Board added to its agenda the performance reporting project (in March 2006 renamed the �financial statement presentation project�). The objective of the project was to enhance the usefulness of information presented in the income statement. The Board developed a possible new model for reporting income and expenses and conducted preliminary testing. Similarly, in the United States, the Financial Accounting Standards Board (FASB) added a project on performance reporting to its agenda in October 2001, developed its model and conducted preliminary testing. Constituents raised concerns about both models and about the fact that they were different.

In April 2004 the Board and the FASB decided to work on financial statement presentation as a joint project to further the goal of promoting convergence of accounting standards used internationally.

They agreed that the project should address presentation and display not only in the income statement, but also in the other statements that, together with the income statement, would constitute a complete set of financial statements�the balance sheet, the statement of changes in equity and the cash flow statement (statements have been renamed as a part of the project and the scope of income statement expanded). 

Stage 2: Project Planning

The project is being conducted jointly with the FASB in three phases: 

Phase A - addresses what constitutes a complete set of financial statements and requirements to present comparative information. The IASB and FASB completed deliberations on this Phase.

Phase B - (current phase). This phase focuses on the fundamental issues for presentation and display of information in the financial statements. The Boards developed three objectives for financial statement presentation based on the objectives of financial reporting and the input the Boards received from users of financial statements and from members of their advisory groups.

Phase C - which has not yet begun, will address presentation and display of interim financial information in US GAAP. The IASB may reconsider the requirements in IAS 34, Interim Financial Reporting.

Stage 3: Development and publication of a discussion paper

Phase A

A discussion paper is not a mandatory step in the IASB Due Process Handbook. A discussion paper was not considered necessary for this phase because the Board�s objective was not to reconsider all the requirements of IAS 1.


Phase B

On October 16, 2008, both Boards published for public comment a discussion paper,  Preliminary Views on Financial Statement Presentation. The FASB discussion paperand the IASB discussion paper are the same except for differences in style/format. The comment period ends on April 14, 2009.

As a first step to developing that paper, in March 2006 the Board agreed to working principles for Phase B of the project which focus on the fundamental issues for presentation and display of information in the financial statements.


In brief, the objectives of financial statement presentation state that the financial statements should:


(a) portray a cohesive financial picture of an entity�s activities;

(b) disaggregates information so that it is useful in predicting an entity�s future cash flows;

(c) help users assess an entity�s liquidity and financial flexibility.


Since March 2006 the Board discussed the application of those objectives at Board meetings. The output of these discussions is included in the discussion paper.

Stage 4: Development and publication of an exposure draft

Phase A

On March 16, 2006, as a result of its work in phase A, the Board issued an Exposure Draft of Proposed Amendments to IAS 1 Presentation of Financial Statements: A Revised Presentation. The comment period for the exposure draft ended on July 17, 2006. The FASB decided that it would not publish a separate Exposure Draft on Phase A of the project. Rather, it will expose its Phase A decisions along with its Phase B decisions.


Phase B

An Exposure Draft will be developed after the comment period for the discussion paper ends.

During the 6-month comment period on the Discussion Paper a number of entities will participate in a field test. Participating entities will recast, to the extent that it is practical, two years of financial statements using the Boards� preliminary views on financial statement presentation. In addition, the Financial Accounting Standards Research Initiative (FASRI) will study investor use of financial statements prepared using the proposed presentation model by conducting a series of controlled tests.

The Boards hope to learn about the costs and benefits of the proposed presentation model through that field test, FASRI�s study, the comment letters they receive on the October 2008 Discussion Paper, and discussions with interested parties during the comment period. They will consider all of that input when they redeliberate the issues addressed in this Discussion Paper during the next stage of Phase B, which will lead to publication of an exposure draft of a proposed standard.

Stage 5: Development and publication of an IFRS

Phase A

IAS 1 Presentation of financial statements was published in early September 2007.

Phase B

This stage has not been initiated for Phase B.

Stage 6: Procedures after an IFRS is issued


Phase A, the IASB may consider holding meetings with interested parties (standard setters, SAC, IFRIC, other constituents) to help understand issues related to the practical implementation and impact of IAS 1 (revised 2007).


Phase Bthis step has not been initiated.