FEE has contributed to the discussion on separate financial statements that EFRAG started in cooperation with the relevant Italian, Dutch and Spanish standard setters. Hereby, they aim to influence the future standard setting of the IASB. The Discussion Paper considers how separate financial statements are used in Europe for economic decision making and analyses financial reporting issues that arise when preparing such financial statements under IFRS.

Separate financial statements are those produced by a parent company where the investment is not consolidated but rather accounted at cost or under IAS 39/IFRS 9. Depending on local legal requirements, separate financial statements could be prepared under IFRS or local GAAP. As IFRS generally focusses on consolidated financial statements, a company may face uncertainty in dealing with accounting issues when applying IFRS to separate financial statements.

FEE welcomes that EFRAG identifies different categories of users of the information that separate financial statements provide and sets out how they use this information. We do think that IFRS should be applied as similarly as possible in separate and consolidated financial statements. However, we point out situations where this may not be appropriate or possible. In some cases, the need to apply IFRS differently may not depend on the difference between separate and consolidated financial statements, but rather on the difference between IFRSs.

Relevant Documents

EFRAG Discussion Paper on Separate Financial Statements

FEE Comment Letter on EFRAG DP on Separate Financial Statements