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IFRS Foundation issues Formula Linkbase 2015

20 Apr 2015

The IFRS Foundation has issued the 2015 IFRS Taxonomy Formula Linkbase. The Formula Linkbase is updated from the 2014 version; it is designed to help improve the data quality of IFRS Taxonomy filings and to provide additional guidance for both technical and financial reporting audiences so that they can better understand the IFRS concepts and their meanings.

From a business perspective, the formula linkbase provides additional validation opportunities for preparers to help ensure that the facts reported in their filings are of a high quality. From a technical perspective, it improves the quality of IFRS Taxonomy filings based on the final IFRS Taxonomy 2015.

For more information, see the press release on the IASB's website.

IASB to discuss effective date of IFRS 15

20 Apr 2015

In preparation for the IASB's meeting next week, an agenda paper has been released today discussing the effective date of IFRS 15 and asking the IASB whether it wishes to defer the effective date in the light of (i) issues emerging from discussions of the Revenue Transition Resource Group (TRG) and (ii) the FASB’s tentative decision regarding the effective date.

In the paper the IASB staff makes the following recommendations:

We recommend that the IASB defer the effective date of IFRS 15 by one year to 1 January 2018. An entity would continue to be permitted to apply the requirements to annual periods beginning before that date.

If the IASB agrees to propose a deferral of the effective date, we recommend publishing the proposed deferral for comment as a separate narrow-scope Exposure Draft. That Exposure Draft would include a comment period of no less than 30 days that allows for the finalisation of the IASB’s discussions in this respect at the July 2015 board meeting.

In May 2014, the IASB and FASB issued converged standards on revenue recognition and also agreed a common effective date. However, in April 2015 the FASB tentatively decided to defer for one year the effective date of its new revenue standard (ASU 2014-09 Revenue From Contracts With Customers) for public and nonpublic entities reporting under US GAAP. The IASB staff is now asking the IASB whether it wants to follow suit in the light of issues discussed at the TRG meetings and intended clarifications as well as in order to keep up convergence with the FASB.

Please click to access the agenda paper on the IASB website. It offers the staff's recommendations, historical background, an explanation of what the FASB has decided, and a summary of IFRS stakeholder feedback.

Agenda for the April 2015 IASB meeting

17 Apr 2015

The IASB will meet at its offices in London on 27-29 April 2015. Topics discussed at the meeting will include fair value measurement, revenue recognition, IFRS Interpretation issues, the disclosure initiative, and inflation.

The full agenda for the meeting can be found here. We will post any updates to the agenda, as well as our De­loitte ob­server notes from the meeting, on this page as they become avail­able.

Hans Hoogervorst speaks about the reasons behind the IASB's work

16 Apr 2015

At the IFRS Foundation trustees’ stakeholder event in Toronto, Canada, IASB Chairman Hans Hoogervorst presented a mission statement for the IASB and the IFRS Foundation explaining not only ‘what’ but also ‘why’ the organisation does what it does.

The statement Mr Hoogervorst presented was, in a nutshell:

Our mission is to develop IFRS that bring transparency, accountability and efficiency to financial markets around the world. Our work serves the public interest by fostering trust, growth and long-term financial stability in the global economy.

Mr Hoogervorst went on to explain that the transparency was to be achieved by enhancing the quality and international comparability of financial information, accountability would improve by reducing the information gap between the providers of capital and the people to whom they have entrusted their money, and economic efficiency would be enhanced by helping investors to identify opportunities and risks across the world. These three aspects together would then make up the contribution of IFRSs to the public good.

As always, Mr Hoogervorst also touched upon adoption of IFRSs around the world. One of his points was commending Canada, that has close ties to the United States, for adopting IFRSs although "there has been no further breakthrough for IFRS in the United States". He also warned against giving up whatever convergence has so far been achieved. On revenue recognition he stated:

Completing IFRS 15 took more than a decade of hard work by both Boards, three formal rounds of public consultation, thousands of hours of meetings and countless outreach meetings. The perfect accounting standard does not exist. An endless process of tinkering will certainly not bring us close to perfection.

The full transcript of Chairman Hoogervorst’s speech is available on the IASB’s website.

Recording of the ECON hearing of the new EFRAG President

16 Apr 2015

The Committee on Economic and Monetary Affairs (ECON) of the European Parliament has made available a recording of the hearing of Dr Wolf Klinz, who was recently nominated as President of the Board of the European Financial Reporting Advisory Group (EFRAG) by the European Commission.

In his introductory remarks, Mr Klinz stressed that moving to IFRSs in Europe in 2005 was the right decision to make, however, he also stated that he sees a more active role for EFRAG going forward. So far, he said, EFRAG has been primarily the IASB's ambassador in Brussels. He believed it was now time that EFRAG became the EU ambassador at the IASB in London. Mr Klinz summed  up his introductory remarks by five goals he sees for EFRAG under his leadership:

  • EFRAG should become the uncontested European voice as regards accounting standard-setting.
  • EFRAG must work to achieve maximum consensus in the European Union.
  • EFRAG must help to ensure that prudence and true and fair view remain aspects of accounting.
  • EFRAG must involve the European Parliament in the discussion around accounting standards through regular dialogue.
  • EFRAG must face the fact that it does not only have a technical but also a political role.

After the hearing, the ECON voted almost unanimously for the appointment of Mr Klinz.

Please click to access the recording on the ECON website. The first ten minutes cover the opening remarks of Mr Klinz, the remaining time questions and answers. Please be aware that you can listen to the recording in twenty-one different languages as well as in the original, multi-language version.

IASB's Financial Instruments Guide 2015 available now

16 Apr 2015

The IFRS Foundation has announced that the 'Financial Instruments 2015 Guide' is now available to buy. The guide offers the complete text, with extensive cross-references, of the standards on financial instruments issued by the IASB.

The guide comprises two volumes:

  • Volume 1 is a guide through the official text of IAS 39 and the other financial instruments Standards as it assumes no early application.
  • Volume 2 is a guide through the official text of IFRS 9 and the other financial instruments Standards assuming early application.
It sells for £58  a copy plus shipping. Please click for more information and placing your order.

Feedback on the European Discussion Paper on separate financial statements

16 Apr 2015

The European Financial Reporting Advisory Group (EFRAG) has published a feedback statement summarising the main messages from respondents to the Discussion Paper 'Separate Financial Statements'.

The paper, published in September 2014, was aimed at addressing concerns around how some accounting issues in separate financial statements should be dealt with and a number of practical concerns have arisen in the application of IFRS to the separate financial statements. The discussion paper considered how separate financial statements are used in Europe for economic decision-making and analysed the technical financial reporting issues that arise under IFRS when preparing such financial statements. The paper also proposed solutions to the issues identified and suggestions on how to consider separate financial statements in the future.

Most respondents welcomed the initiative of EFRAG and its partners in issuing the paper as a way of stimulating the discussion on separate financial statements, a topic that historically has received little attention from the IASB. While not all respondents considered that separate financial statements give rise to significant issues, a majority agreed that it would be useful if the IASB reviewed existing requirements, with a view to developing a specific set of general principles for separate financial statements.

The feedback statement is available on the EFRAG website.

Summary of March GPF meeting now available

16 Apr 2015

Minutes of the meeting of the Global Preparers Forum (GPF) with representatives of the International Accounting Standards Board (IASB) held in London on Thursday, 5 March 2015 are now available.

The following are some of the highlights of the matters discussed at the meeting:

  • IASB Update. One of the concerns of the GPF members was convergence. GPF members challenged the extent to which the IASB and FASB really are converged in respect of the Leases projects. Also, GPF members commented that that it was unhelpful to refer to convergence in respect of IFRS 15 if the words in IFRS are going to be different from US GAAP and, as a result, outcomes may also be different.
  • IFRS Interpretations Committee Update. The meeting discussed:
    •  IAS 2/IAS 38: Should interest be accreted on prepayments for long-term supply contracts?
    • IAS 16: Accounting for proceeds and costs of testing of PPE
    • IAS 12: Reflecting uncertainty in the recognition and measurement of income taxes
  • Agenda consultation 2015. GPF members commented on the strategic direction of the IASB Agenda and suggested that the IASB should now spend more time on maintaining existing standards. They also commented on projects that should be prioritised. Again, convergence was brought up as a topic, however, GPF members felt that convergence should not be raised as a topic in the agenda consultation as convergence has been tried but has failed.
  • Business combinations under common control. The IASB staff provided an update on the research project on business combinations under common control (BCUCC). A few GPF members commented on the scope of the project.
  • Income tax accounting. The purpose of this session was to understand how, and to what extent, income tax information is used by internal management; to identify the existing practical problems about the current accounting for income taxes; and to get a sense of a direction for improving the accounting standard for income tax.
  • Review of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors. GPF members were provided with results of a preparers’ survey launched by the OIC in December 2014 and were asked whether those results were consistent with their views. Most members agreed with the findings of the survey.
  • Discount rates. The IASB staff provided an update on the research project on discount rates. GPF members expressed support for conducting research on discount rates, however, they stated that this research should be of medium priority. They also stated that any standard-setting action should occur through cross-cutting projects as opposed to piecemeal amendments to different individual standards at different times.
  • Share-based payment. The IASB staff provided an update on the research project on share-based payment. The objective of the project is to identify the most common areas of complexity in IFRS 2. GPF members agreed that there are some areas of complexity in IFRS 2, however, they also commented that the standard issued in 2004 has achieved its main objective. They stated that this research should be of medium to low priority.
  • Performance reporting. The IASB staff provided an update on the research project on performance reporting that was added to the IASB's agenda in July 2014. Although the project is entitled ‘Performance reporting’, it is inevitable that the statement of financial position will be considered as part of the project. The staff emphasised that the IASB would learn from the consultations it undertook in the FSP project, and the mistakes it made. GPF members voiced some concerns, and the IASB staff promised that the IASB would develop the project cautiously. Opinions as to what priority should be given to this project were split.

The full report is available on the IASB website.

Deloitte releases e-learning module on IFRS 15

15 Apr 2015

Deloitte’s Global Audit Learning group has released an e-learning module on IFRS 15. This new module is an addition to the extensive catalogue of IFRS e-learning content made freely available by Deloitte.

Each Deloitte e-learning module provides training in the background, scope and principles of each pronouncement, and provides practical insights into their application. Topics covered in the IFRS 15 module include the principles for the recognition of revenue to the sale of goods, services, licenses, royalties, and any variable consideration or modifications to contracts; and guidance is provided on how these principles should be applied by using the new five step revenue recognition model.

The IFRS e-learning modules are available free of charge and may be used and distributed freely, without alteration from the original form and subject to the terms of the Deloitte copyright over the material.

For details on the full range of e-learning modules go to Deloitte’s IFRS e-learning website. A listing of available e-learning modules is also available on our IAS Plus IFRS e-learning page.

Report on IFRS adoption by Japanese companies

15 Apr 2015

The Financial Services Agency of Japan (FSA) has released a report studying IFRS adoption by Japanese companies. The report is primarily intended to provide information for Japanese companies planning to move to IFRSs to further increase voluntary adoption of IFRSs by public companies in Japan. However, it also offers insights into the progress of adoption of IFRSs in Japan in general.

The 77-page report, which is predominently based on responses to a questionnaire that 65 companies provided, covers 1) the respondents' motivation to adopt IFRSs, 2) the migration process and project management structure, 3) the cost of adoption, and 4) implementation challenges. The report is available free of charge on the FSA website (Japanese language only).

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