| On 1 June, the European Commission sent to EFRAG a request for technical advice on possible alternative accounting treatments to fair value measurement for long-term investment portfolios of equity and equity type instruments (as foreseen in the EU Action Plan on Sustainable Finance (Action 9: Strengthening sustainability disclosure and accounting rule-making)).
Through this call for technical advice, EFRAG is asked to consider alternative accounting treatments to measurement at fair value through profit or loss (FVPL) for equity instruments. Possible accounting treatments should portray the performance and risks of long term investment business models for those equity and equity type investments needed for achieving the UN Sustainable Development Goals and the goals of the Paris Agreement on climate change. Alternative accounting treatments should preferably enhance investors’ insight in the long-term performance of investments as opposed to recognizing point in time market based value changes in reported profit or loss during the duration of the equity investment. EFRAG should deliver the technical advice to the EC by the second quarter of 2019. |
EFRAG’s response to the EC – request for technical advice
EFRAG’s response to the EC – request for technical advice.pdf