6 September 2010

Sir David Tweedie
Chairman
International Accounting Standards Board
30 Cannon Street
London EC 4M 6XH
UNITED KINGDOM.

Dear Sir David

ED/2010/5 Presentation of items of other comprehensive income

The Group of 100 (G100) is an organization of chief financial officers from Australia's largest business enterprises with the purpose of advancing Australia's financial competitiveness. The G100 is pleased to provide comments on this Exposure Draft.

The G100 does not support the proposal to mandate a single report and remove the current flexibility which enables an entity to separately present a report on its performance and a report containing items of other comprehensive income (OCI). We do support the proposal to classify items of OCI.

Q1. The Board proposes to change the title of the statement of comprehensive income to 'Statement of profit or loss and other comprehensive income' when referred to in IFRSs and its other publications. Do you agree? Why or why not? What alternative do you propose?

The G100 does not object to the proposed change of title where an entity chooses to present a single statement. The G100 does not believe there is a need to change from the existing permissive approach in IAS 1 'Presentation of Financial Statements' under which the entity can choose to provide a single statement or separate statements.
 
Q2. The proposals would require entities to present a statement of profit or loss and other comprehensive income with two sections ' profit or loss and items of other comprehensive income. The Board believes this will provide more consistency in presentation and make financial statements more comparable. Do you agree? Why or why not? What alternative do you propose?

While the G100 supports the concept of a single statement of comprehensive income (however described) we favour retaining the existing approach in IAS 1. We are not convinced that the combined statement will facilitate comparability as the information is already provided to users and the presentation changes are cosmetic.
 
Q3. The ED proposes to require entities to present items of other comprehensive income (OCI) that will be reclassified to profit or loss. Do you support this approach? Why or why not? What alternative do you propose and why?

Yes. The G100 believes that classifying and presenting items of OCI in this way will be useful to users of the financial statements.
 
Q4. The ED also proposes to require that income tax on items presented in OCI should be allocated between items that might be subsequently reclassified to profit or loss and those that will not be reclassified subsequently to profit or loss, if the items in OCI are presented before tax. Do you support this proposal? Why or why not? What alternative do you propose and why?

The G100 supports the proposal which results in the tax being classified in the same section as the related OCI item.
 
Q5. In the Board's assessment:
 
a. the main benefits of the proposals are:
  i. presenting all non-owner changes in equity in the same statement.
 
  ii. improving comparability by eliminating options currently in IAS 1.
 
  iii. maintaining a clear distinction between profit or loss and items of other comprehensive income.
 
  iv. improving clarity of items presented in OCI by requiring them to be classified into items that might be reclassified subsequently to profit or loss and items that will not be reclassified subsequently to profit or loss.
 
b. the costs of the proposals should be minimal because in applying the existing version of IAS 1, entities must have all the information required to apply the proposed amendments.

Do you agree with the Board's assessment? Why or why not?

The G100 agrees that as the proposed changes are essentially cosmetic the costs of compliance are likely to be minimal. The G100 does not accept the basis of the Board's assessment and justification for the proposed mandating of a single statement particularly given that the information is adequately presented under current requirements. The G100 believes that the separate classification of OCI items (whether in a single statement or in a separate statement) will help clarify the nature of items for users.
 
Q6. Do you have any other comments on the proposals?

No.

Yours sincerely
Group of 100 Inc

 

Peter Lewis
National President