18 March 2013
Mr Hans Hoogervorst
International Accounting Standards Board
30 Cannon Street
London EC 4M 6XH
Dear Mr Hoogervorst
ED/2013/1 Recoverable amount disclosures for non-financial assets
The Group of 100 (G100) is an organisation of chief financial officers from Australia’s largest business enterprises with the purpose of advancing Australia’s financial competitiveness, is pleased to offer comment on the Exposure Draft.
|Q1|| Disclosures of recoverable amount: The IASB proposes to remove the requirement in para 134(c) to disclose recoverable amount of each cash-generating unit (group of units) for which the carrying amount of goodwill or intangible assets with indefinite useful lives allocated to that unit (group of units) is significant when compared to the entity’s total carrying amount of goodwill or intangible assets with indefinite useful lives. In addition, the IASB proposes to amend para 130 to require an entity to disclose the recoverable amount of an individual asset (including goodwill) or a cash-generating unit for which the entity has recognised or reversed an impairment loss during the reporting period.
Do you agree with the proposed amendment? If not, why and what alternative do you propose?
The G100 agrees with the proposed amendments to IAS 36 para 134(c) to remove an oversight which occurred with the issue of IFRS 13 ‘Fair Value Measurement’ and to address potential unintended consequences of the earlier decision.
|Q2||Disclosures of the measurement of fair value less costs of disposal: The IASB also proposes to include in para 130 the requirement to disclose the following information about the fair value less costs of disposal of an individual asset (including goodwill) or a cash-generating unit for which the entity has recognised or reversed an impairment loss during the reporting period:
Do you agree with the proposed amendments? If not, why and what alternative do you propose?
The G100 considers that the disclosures are appropriate when Level 2 and Level 3 of the fair value hierarchy are applied and not in respect of Level 1 measures. The method of valuation is self-evident for Level 1 measures and requiring such disclosure is unnecessary and avoidable.
|Q3||Transition provisions: The IASB proposes that the amendments should be applied retrospectively for annual periods beginning on or after 1 January 2014. The IASB also proposes to permit earlier application, but will not require an entity to apply those amendments in periods (including comparative periods) in which the entity does not also apply IFRS 13.
Do you agree with the proposed transition method and effective date? If not, why and what alternative do you propose?
The G100 agrees with the retrospective application of the amendments.
|Q4||Other comments: Do you have any other comments on the proposals?
It is not clear to us why a separate exposure draft needed to be issued to process the proposed amendments which, on our understanding of the purpose and intention of the annual improvements process, could be addressed along with other items of annual improvements
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