1. The views expressed in this presentation are those of the presenter, not necessarily those of the IASB or IFRS Foundation. International Financial Reporting Standards Disclosure Initiative Proposed changes to IAS 1 Presentation of Financial Statements © IFRS Foundation. 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org

2. Before we start… You can download the slides by clicking on the button below the slides window To ask a question, type into the designated text box on your screen and click submit A recording of the webcast will be available after the presentation at http://www.ifrs.org/Current-Projects/IASB- Projects/Amendments-to-IAS-1/Pages/Home.aspxhttp://www.ifrs.org/Current-Projects/IASB- Projects/Amendments-to-IAS-1/Pages/Home.aspx The views expressed are those of the presenters, not necessarily those of the IASB or IFRS Foundation 2 © IFRS Foundation. 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org

3. Background Overview of the Disclosure Initiative Overview of the IAS 1 project (Presentation of Financial Statements) Specific amendments –Order of notes –Subtotals –Materiality –Line items –Accounting policies Questions Agenda © IFRS Foundation. 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org 3

4. 4 Background © IFRS Foundation. 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org Agenda Consultation 2011 “A disclosure framework is needed to ensure that information disclosed is more relevant to investors and to reduce the burden on preparers” Discussion Forum Obtain views from those in the financial reporting process Survey also undertaken Feedback Statement Summarises what we have heard Highlights potential next steps for the IASB

5. An overview © IFRS Foundation. 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org 5 Disclosure Initiative Ongoing activities Digital reporting New Exposure Drafts Implementation Amendments to IAS 1 Reconciliatio n of liabilities from financing activities (changes in debt) Research Materiality Principles of Disclosure Review of existing Standards

6. © IFRS Foundation. 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org 6 Amendments to IAS 1 Exposure Draft published March 2014 Narrow-focus, clarifying amendments Each of the issues is relatively small, but their cumulative effect could be greater - could lead to improved financial reporting Comment letter deadline 23 July 2014 Redeliberations start Q3 2014

7. © IFRS Foundation. 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org 7 Notes - order Problem IAS 1 specifies a ‘normal’ order to the notes Some preparers told the IASB that this perception of ‘normal’ makes it difficult for them to present related information together or indicate the relative importance of different disclosures Some investors have told the IASB they want to see how disclosures are related Result: related information spread throughout the financial statements making it difficult to connect relevant information Proposal Clarify that entities have flexibility for the order for the notes Emphasise that understandability and comparability should be considered when deciding a systematic order for the notes Potential effect: related information could be disclosed together, for example, the financial instrument accounting policy and the financial instrument note, or more important information could be shown first

8. © IFRS Foundation. 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org 8 Subtotals Problem Some preparers would like to include subtotals not specified by IFRS on the face of the income statement but they are discouraged from doing so Result: additional subtotals may not be provided even though management think they are useful Proposal Introduce requirements: if an entity wants to present subtotals, they must be: Recognised and measured in accordance with IFRS Presented and labelled to make the subtotal understandable Be consistent from period to period Not be displayed with more prominence than specifically required subtotals and totals (SOCI only) Potential effect: relevant subtotals may be included in the statement(s) of profit or loss and other comprehensive income and statement of financial position

9. © IFRS Foundation. 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org 9 Materiality Problem Some people think that: If an item is not material it does not need to be disclosed in the primary financial statements, but must be disclosed in the notes If an item is material, all the disclosures in the related Standard must be made Result: Investors may receive too much irrelevant information and not enough relevant information Proposal Clarify that: Materiality applies to the whole financial statements, including the notes Information resulting from specific disclosure requirements should be assessed to determine whether it is material Potential effect: more relevant information included in financial statements

10. © IFRS Foundation. 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org 10 Materiality continued Problem Disclosure overload contributes to the problem with disclosure – there is too much immaterial information in financial statements. Result Too much immaterial information can obscure the information which is relevant to the investor Proposal Amendment: An entity shall not aggregate or disaggregate information in a manner that obscures useful information, eg Aggregating items that have different characteristics Overwhelming useful information with immaterial information Potential effect: relevant and important information in financial statements more visible, and easier to find

11. © IFRS Foundation. 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org 11 Line items - disaggregation Problem Some think that if specific line items are required they cannot be disaggregated For example, an entity may feel prevented from disaggregating its property, plant and equipment line item even though the disaggregated information may be useful Proposal Clarify that requirements can still be met by disaggregating a specific line item Include an example of a disaggregation of a line item in the Statement of Financial Position Potential effect: better disaggregation in the statement(s) of profit or loss and other comprehensive income and statement of financial position

12. © IFRS Foundation. 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org 12 Accounting policies Problem IAS 1 requires significant accounting policies to be disclosed. It also includes some examples which some people think make it difficult to argue that an accounting policy is insignificant Income taxes Foreign currency Result: accounting policy disclosures can be boilerplate and irrelevant accounting policies are disclosed Proposal Remove the examples from IAS 1 Another project under the Disclosure Initiative to look at significant accounting policies Potential effect: removal of irrelevant accounting policies from financial statements

13. More information about the Disclosure Initiative: http://www.ifrs.org/Current-Projects/IASB- Projects/Disclosure-Initiative/Pages/Disclosure-Initiative.aspx http://www.ifrs.org/Current-Projects/IASB- Projects/Disclosure-Initiative/Pages/Disclosure-Initiative.aspx More information about the Amendments to IAS 1 project: http://www.ifrs.org/Current-Projects/IASB- Projects/Amendments-to-IAS-1/Pages/Home.aspx http://www.ifrs.org/Current-Projects/IASB- Projects/Amendments-to-IAS-1/Pages/Home.aspx Further information © IFRS Foundation. 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org 13

14. 14 © IFRS Foundation. 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org Questions