Response 5 - AVIVA

Amendments to IAS 21 DECA—INVITATION TO COMMENT

Call for comments on Draft Endorsement Criteria Assessment of Lack of Exchangeability (Amendments to IAS 21)

Introduction

The objective of this Invitation to Comment is to obtain input from stakeholders on the endorsement and adoption of Lack of Exchangeability (Amendments to IAS 21) (the Amendments), published by the International Accounting Standards Board (IASB) in August 2023. The Amendments aim to clarify the requirements for assessing exchangeability, the exchange rate to use when there is a lack of exchangeability and the related disclosures. The Amendments aim to address diversity in practice and improve the usefulness of the information provided to the investors. The Amendments will be effective for annual periods beginning on or after 1 January 2025. Earlier application is permitted. The information collected from this Invitation to Comment is intended to help with the endorsement assessment.

UK endorsement and adoption process

The requirements for UK adoption are set out in Statutory Instrument 2019/685¹.

The powers to formally adopt international accounting standards for use in the UK were delegated to the UK Endorsement Board in May 2021².

Who should respond to this Invitation to Comment?

Stakeholders with an interest in the quality of accounts prepared in accordance with IFRS Accounting Standards.

How to respond to this Invitation to Comment

Please download this document, answer any questions on which you would like to provide views, and return it to [email protected] by close of business on [Monday 6 May 2024].

Brief responses to individual questions are welcome, as well as comprehensive responses to all questions.

Privacy and other policies

The data collected through submitting this document will be stored and processed by the UKEB. By submitting this document, you consent to the UKEB processing your data for the purposes of influencing the development of and adopting IFRS for use in the UK. For further information, please see our Privacy Statements and Notices and other Policies (e.g. Consultation Responses Policy and Data Protection Policy)³.

The UKEB’s policy is to publish on its website all responses to formal consultations issued by the UKEB unless the respondent explicitly requests otherwise. A standard confidentiality statement in an e-mail message will not be regarded as a request for non-disclosure. If you do not wish your signature to be published, please provide the UKEB with an unsigned version of your submission. The UKEB prefers to publish responses that do not include a personal signature. Other than the name of the organisation/individual responding, information contained in the “Your Details” document will not be published. The UKEB does not edit personal information (such as telephone numbers, postal or e-mail addresses) from any other response document submitted; therefore, only information that you wish to be published should be submitted in such responses.

Assessment against endorsement criteria

Our draft assessment [tentatively] concludes that:

• the Amendments meet the criteria of relevance, reliability, understandability and comparability required of the financial information needed for making economic decisions and assessing the stewardship of management, as required by SI 2019/685 (see Regulation 7(1)(c));
• application of the Amendments is not contrary to the principle that an entity’s accounts must give a true and fair view as required by SI 2019/685 (see Regulation 7(1)(a)); and
• that the Amendments are likely to be conducive to the long term public good in the UK as required by SI 2019/685 (see Regulation 7(1)(b)), having considered:
• whether they will generally improve the quality of financial reporting;
• the costs and benefits that are likely to result from their use; and
• whether they are likely to have an adverse effect on the economy of the UK, including on economic growth.

Our assessment of the Amendments is set out in Section 2 of the DECA on the pages indicated below:

Questions

Technical accounting criteria assessment

1Do you agree with the draft assessment of the Amendments against the technical accounting criteria? (please select one option)

2Please include any comments you may have in response to question 1:

We agree with the assessment set out in the DECA.

True and fair view

3Do you agree with the draft assessment that the Amendments are not contrary to the true and fair view requirement? (please select one option)

4Please include any comments you may have in response to question 3:

We agree with the assessment set out in the DECA.

UK long term public good

5Do you agree with the initial overall assessment of costs and benefits likely to arise from the Amendments? (please select one option)

6Please include any comments you may have in response to question 5, including if any costs or benefits have been omitted:

We have no further comments on the costs and benefits of the proposed amendments.

7Do you agree with the draft assessment that the Amendments are likely to be conducive to the long term public good in the UK? (please select one option)

8Please include any comments you may have in response to question 7:

Although the amendments are not expected to have wide-scale application, we agree that they are likely to be conductive to the long term public good in the UK because they enhance the relevance, comparability and disclosure of the financial information.

9Do you have any other comments you would like to add?

We have no further comments.

Thank you for completing this Invitation to Comment

Please submit this document by close of business on [Monday 6 May 2024] to: [email protected]

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