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IASB publishes IFRS for SMEs bound volume

01 Dec 2015

The 2015 IFRS for SMEs bound volume is the official printed edition of the IASB’s International Financial Reporting Standard for Small and Medium-sized Entities (IFRS for SMEs). It incorporates the May 2015 amendments to the IFRS for SMEs.

In the bound volume, the IFRS for SMEs is presented in two volumes: Part A contains the IFRS for SMEs standard and a derivation table and Part B contains the basis for conclusions and illustrative financial statements.

Copies are priced at £35 each (before discounts), plus shipping. Orders can be placed throught the IASB's IFRS Shop. It can also be accessed online through eIFRS.

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IFRS Foundation publishes first update to IFRS Taxonomy 2015

01 Dec 2015

The IFRS Foundation has published 'Update 1 to the IFRS Taxonomy 2015'.

The taxonomy updates contain additional taxonomy concepts that reflect new IFRSs and improvements to IFRSs, technical updates, and corrections. This update includes taxonomy elements for the May 2015 final amendments to the IFRS for SMEs.

For more information and access to the update, see the press release on the IASB’s website.

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We comment on the Trustees’ review of structure and effectiveness

01 Dec 2015

We have responded to the IFRS Foundation Trustees' Request for Views document with proposals for further enhancing the structure and effectiveness of the organisation.

On the question of the IASB's remit, we also follow the cost argument and state that while not-for-profit organisations are within the IASB’s ‘private sector’ scope, resources at the IASB are scarce and should be concentrated on work in the for-profit sector. However, we would support the IFRS Foundation Trustees assuming oversight (not standard-setting) of activities in the public sector as many public sector entities are active in capital markets.

We disagree with the proposal to reduce the size of the IASB to 13 members as the IASB needs sufficient technical and standard-setting experience to have the ability to challenge the staff (and constituents) effectively. As it is, we already have a serious concern about the quality control over due process documents and issued IFRSs.

Finally, we think that what is missing from the consultation is a sense of context, how the IFRS Foundation Trustees see their current priorities in relation to a wider and more long-term view of financial and corporate reporting generally, and how and whether its structure and processes support that view.

Please click to access the full comment letter.

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We comment on a number of tentative agenda decisions of the IFRS Interpretations Committee

30 Nov 2015

We have published our comment letters on IFRS Interpretations Committee agenda decisions on IAS 32, IAS 39, IFRS 5, IFRS 9, and IFRS 11, as published in the September 2015 IFRIC Update.

More information about the issues is set out below:

IssueAgenda decision supported?More information
IAS 32 Financial Instruments: Presentation — Classification of the liability for a prepaid card in the issuer’s financial statements yes
IAS 39 Financial Instruments: Recognition and Measurement — Separation of an embedded interest rate floor from a floating rate host contract in a negative interest rate environment yes
IFRS 5 Non-current Assets Held for Sale and Discontinued Operations — To what extent can an impairment loss be allocated to non-current assets within a disposal group? yes
IFRS 5 Non-current Assets Held for Sale and Discontinued Operations — How to present intragroup transactions between continuing and discontinued operation no
IFRS 5 Non-current Assets Held for Sale and Discontinued Operations — Various IFRS 5-related issues yes
IFRS 9 Financial Instruments — Transition for hedge accounting yes
IFRS 11 Joint Arrangements — Remeasurement of previously held interests: Various transactions yes

You can access all our comment letters to the IASB, IFRS Foundation, and IFRS Interpretations Committee here.

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Agenda for December 2015 Emerging Economies Group meeting

27 Nov 2015

The agenda is available for the tenth meeting of the Emerging Economies Group (EEG) and International Accounting Standards Board (IASB), which is being held in Riyadh on 1-2 December 2015.

The agenda is summarised below:

Tuesday 1 December 2015 (09:00-17:00)

  • Address by hosting country (Saudi Arabia)
  • Address by the EEG Chair
  • Presentation on the IASB Agenda consultation
  • Discussion: IASB Agenda consultation
  • Business combination under common control
  • Discussion (continued) : IASB Agenda consultation
  • Administrative issues (topics and venue for future meetings, video conference test, expanding new members)

Wednesday 2 December 2015 (09:00-12:20)

  • IASB updates
  • IFRIC exposure draft on uncertainty over income tax treatments
  • Open discussion on topics from members
  • Discussion and approval of the communiqué
  • Meeting summary

 Agenda papers from this meeting are available on the IASB's website.

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Should the IASB extend its remit beyond the current focus of the organisation to develop standards; in particular for entities in the private, not-for-profit sector?

27 Nov 2015

On 7 July 2015, the Trustees launched the 2015 Constitution review. One of the questions asked was whether the IASB should extend its remit beyond the current focus of private sector, for-profit entities. With the comment letter deadline approaching (next Monday), two major positions emerge.

The proponents (among them AICPA, AASB, and MASB) argue from a conceptual viewpoint:

  • There clearly is a need for international financial reporting standards for private not-for-profit entities.
  • The IASB has the experience necessary for dealing with international standard-setting.
  • Even though circumstances differ between the for-profit and the private not-for-profit sectors, fundamentally the economics are not sector-specific.
  • Standard-setting across sectors and testing new concepts across all of them can result in better quality standards and decisions for the for-profit sector.
  • Some of the proponents even believe public sector standard-setting should be included in the IASB's responsibilities for the same reasons.

The opponents (among them ASCG, ESMA, FRC, IFAC, Keidaren, and XRB) mostly argue from the cost perspective:

  • Even though most acknowledge the existing lack of and the potential need for international financial reporting standards for private not-for-profit entities, they are not convinced that this means the IASB has to step in.
  • There are still significant gaps in financial reporting for listed entities that need to be addressed first.
  • The IASB simply doesn't have the funds and resources to take on additional responsibilites.
  • Changes to scope would also likely mean that changes would need to be made to the oversight arrangements, IASB membership and competencies, staff competencies and resources, and Advisory Council membership.

Please click for access to all comment letters on the 2015 Constitution review made available publicly so far on the IASB website.

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Agenda for the December 2015 ASAF meeting changed

27 Nov 2015

The agenda for the upcoming meeting of the Accounting Standards Advisory Forum (ASAF), which is to be held at the IASB's offices in London on 7-8 December 2015, has been updated. On the face of things, the change is minor, however, it could bear significance as it relates to IFRS 9 and the forthcoming standard on insurance contracts.

So far, the different effective dates of IFRS 9 and the new standard on insurance contracts were supposed to be dealt with as part of an omnibus discussion of current IASB projects at the end of the meeting. The issue has now been given a slot in its own right (Monday, 7 December, 16:15-17:30). According to the new agenda, the session is intended to focus only on the overlay approach; the deferral approach will not be discussed. An additional agenda paper for the session has been made available.

We have updated our agenda overview for the entire meeting to reflect the change.

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'Five steps to simplifying financial statements — today'

27 Nov 2015

Chartered Professional Accountants of Canada (CPA Canada) has published a guide outlining an approach for simplyfing financial statements by reducing disclosure overload, without the use of significant resources.

The five steps for achieving described in the publication and also explained in a short video are:

  • make financial reporting a strategic matter;
  • focus on materiality;
  • refine formatting and presentation;
  • apply a truly condensed approach to interim reporting; and
  • keep looking ahead.

Please click to access the publication and the video on the CPA Canada website.

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EFRAG draft comment letter on the materiality exposure draft

27 Nov 2015

The European Financial Reporting Advisory Group (EFRAG) has issued a draft comment letter on IASB exposure draft ED/2015/8 'IFRS Practice Statement - Application of Materiality to Financial Statements'.

In its draft comment letter, EFRAG expresses the view that the proposed guidance could be helpful, in particular in the context of disclosures, in order to provide a common ground for applying judgement in deciding which information is relevant for users and fostering thinking on how materiality is applied. EFRAG also believes that it is appropriate that the guidance takes the form of a practice statement as the essence of the proposed guidance is to foster the exercise of judgement, i.e. work on a mindset. Nevertheless, EFRAG believes that the draft practice statement should be drafted in a more concise and practical way and focus on the key steps of the process necessary to make decisions and exercise judgement on materiality.

Comments are requested by 15 February 2016. For more information, see the press release and the draft comment letter on the EFRAG website.

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Recent sustainability and integrated reporting developments

27 Nov 2015

A summary of recent developments at the IIRC, the ACCA, the CFA Institute, and the Natural Capital Coalition.

The International Integrated Reporting Council (IIRC) announces that it will be launching the <IR> Academic Network on Wednesday, 16 December 2015 via a webinar. The session will include a welcome from the IIRC, an overview of current research on, opportunities for further research, and an introduction to the features of the Academic Network – including how to join. Please click to access the press release on the IIRC website.

The Association of Chartered Certified Accountants (ACCA) has published a report into the challenges to providing independent assurance over an integrated report. The report notes that "the big question is not how <IR> can develop to accommodate assurance, but how assurance models can be adapted to incorporate integrated reporting". Please click for the press release on the ACCA website.

The CFA Institute, a global association of investment professionals, has added Environmental Social & Governance Issues in Investments: A Guide for Investment Professionals to its portfolio of environment, social and governance (ESG) resources. The guide was developed in response to growing interest among investment professionals to better incorporate ESG issues in investment analysis, and serves as a comprehensive introduction to ESG considerations. Please click to access the press release on the CFA Institute's website.

The draft Natural Capital Protocol and Sector Guides have been launched for consultation at the World Forum on Natural Capital. The draft protocol and sector guides have been developed by the Natural Capital Coalition as a standardised framework for business to measure and value its impacts and dependencies on natural capital and to help them integrate this into their decision making. For more information, see the press release on the organisation's website.

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