EFRAG and the National Standard Setters of the UK, France, Germany and Italy publish a Bulletin on complexity
News types: Codes and Standards Announcements
Published: 10 February 2014
EFRAG and the National Standard Setters of the United Kingdom, France, Germany and Italy have published a Bulletin (PDF) on complexity to promote discussion on this issue, and to help form European views that are influential in the debate on the IFRS Conceptual Framework.
Many recent reports have expressed concern that financial statements have become too complex, to the detriment of users’ understanding. These reports acknowledge that some of this complexity arises because transactions are becoming increasingly complex. However, they also note other possible causes, including the degree of complexity in IFRSs.
Despite this common concern about complexity in financial statements and the criticism of IFRS as being too complex, neither the existing Conceptual Framework nor the IASB’s discussion paper on the review of the Conceptual Framework include or propose much guidance on the issue.
The Bulletin reflects in detail on the causes of complexity in accounting and suggests that additional guidance in the Conceptual Framework could be of help to minimise complexity.
Many recent reports have expressed concern that financial statements have become too complex, to the detriment of users’ understanding. These reports acknowledge that some of this complexity arises because transactions are becoming increasingly complex. However, they also note other possible causes, including the degree of complexity in IFRSs.
Despite this common concern about complexity in financial statements and the criticism of IFRS as being too complex, neither the existing Conceptual Framework nor the IASB’s discussion paper on the review of the Conceptual Framework include or propose much guidance on the issue.
The Bulletin reflects in detail on the causes of complexity in accounting and suggests that additional guidance in the Conceptual Framework could be of help to minimise complexity.