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IFAC (International Federation of Accountants) (lt gray) Image
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IFAC urges G20 to call for global adoption of IFRSs

26 Aug 2016

The International Federation of Accountants (IFAC) has submitted recommendations for endorsement by the Group of Twenty (G20) during their meeting in China on 4-5 September 2016.

The recommendations are grouped into two overarching aims:

  • Stronger governance for trust and integrity in business and public sector. In this context the IFAC calls on the G20:
    1. to strengthen governance, to combat fraud and corruption, and to restore public trust and integrity;
    2. to enhance public sector financial management by actively encouraging the adoption of accrual-based accounting in the public sector and by requiring the FSB to encompass the public sector; and
    3. to promote integrated reporting.
  • Creation of a cooperative, consistent, and smart global regulatory environment. The five recommendations in this case are:
    1. to develop and promote the global adoption of clear principles for good regulation;
    2. to acknowledge the importance of international standards;
    3. to enhance global consistency;
    4. to call for cooperation on taxation; and
    5. to establish a permanent G20 secretariat.

The recommendation on international standards expressly refers to IFRSs:

Issue a clear call for the adoption and implementation, across all jurisdictions, of:

  • International Financial Reporting Standards;
  • International Standards on Auditing;
  • Auditor independence requirements set out in the Code of Ethics for Professional Accountants, issued by the International Ethics Standards Board for Accountants; and
  • International Public Sector Accounting Standards (IPSAS).

Please click to access the full letter and a corresponding press release on the IFAC website.

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Agenda for the September 2016 IFRS Interpretations Committee meeting

25 Aug 2016

The IFRS Interpretations Committee will meet at the IASB's offices in London on 6 and 7 September. The agenda for the meeting is now available.

The IFRS Interpretations Committee will continue its discussions on issues regarding IAS 16 and IFRS 9/IAS 28, deliberate comment letters received on issues regarding IAS 21, IFRIC 14, IAS 19 and IFRIC14/IAS19, finalise agenda decisions on IFRIC 12 and IFRS 9, and consider new issues on IAS 12 and IFRS 9.

The full agenda for the meeting can be found here. We will update this page for any changes to the agenda and our Deloitte observer notes from the meeting as they become available.

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New guide to IFRS Taxonomy common practice content

25 Aug 2016

The IFRS Taxonomy contains some content that reflects new common practice regarding disclosures entities commonly provide in practice when applying IFRSs. These disclosures are not explicitly referred to in the standards or the accompanying materials.

To provide users with a better understanding of this kind of content and thus to enable them to contribute meaningfully to the IFRS Taxonomy consultation process, the IFRS Foundation has developed a Guide to Common Practice Content. The guide clarifies:

  • IFRS Taxonomy common practice content;
  • why the IFRS Taxonomy includes common practice content;
  • the process followed to identify common practice elements; and
  • the criteria used to propose identified common practice elements for inclusion in the IFRS Taxonomy.

For more information, please see the press release and the new guide on the IASB website.


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New Chair and Vice-Chair for the IASB's Islamic Finance Consultative Group

25 Aug 2016

The IASB has updated its website detailing the work of its Islamic Finance Consultative Group. As a result of the agenda consultation 2011, the IASB noted Islamic accounting as one of the possible issues for its agenda post 2011 and created a consultative group for Sharia'a-compliant instruments and transactions, which has now been renamed.

The group does not judge whether products are compliant with the requirements of Sharia'a law. Members are aware that there are differing views on whether particular products are compliant; however, dealing with those views is beyond the remit of the group. Therefore, the group's focus is on challenges that may arise in the application of IFRSs to Islamic finance instruments and transactions, which would be brought to the attention of the IASB's IFRS Interpretations Committee.

The newly updated website dedicated to the group's work shows that Mr. Faiz Azmi from PwC Malaysia has been appointed Chair of the consultative group and IASB member Martin Edelmann is the new Vice-Chair. Mr. Wayne Upton, Chairman of the IFRS Interpretations Committee, acts as the group's coordinator.

Please click for the updated IASB website reflecting these changes and a corresponding press release.

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Hans Hoogervorst discusses the IASB's future strategy at African conference

24 Aug 2016

At the Joint IFRS Foundation, PAFA, and ICPAK Conference in Nairobi, Kenya, IASB Chairman Hans Hoogervorst gave a speech titled ‘Latest developments and future focus'. He discussed (1) how Africa can use IFRS to achieve economic progress and (2) the IASB's new 'better communication' initiative.

Mr Hoogervorst provided his usual remarks on IFRS adoption around the world and then reflected on Africa's role in the global economy. He noted that "Africa, and in particular Kenya, is making good progress, putting in place structural reforms and adopting international norms for sound financial systems.  IFRS Standards are part of this package, as recommended by the Financial Stability Board, the World Bank and IOSCO."

He went on to discuss the IASB's work plan and focused on the board's future priorities. Mr Hoogervorst discussed the 'better communication' theme that he unveiled during a speech in June 2016. After explaining that the board's goal is to improve the communications effectiveness of IFRS-based financial statements, Mr Hoogervorst reassured the audience that the IASB would "not propose to cut back the information provided, nor to dramatically increase it." He elaborated on the primary financial statements project, which he called the "central building block" of the 'better communication' effort:

This project will potentially result in a facelift of what is often called the ‘face of the financial statements’. Its focus will be to improve the organisation of the statements of financial performance (profit or loss and other comprehensive income), the statement of cash flows and the statement of financial position, also called the balance sheet. We might also try to find a better way to present some elements of Other Comprehensive Income, which is currently a conundrum for most investors.

Mr Hoogervorst also listed the other projects that are meant to improve the communications effectiveness of financial statements:

  • disclosure initiative project;
  • the development of a materiality practice statement;
  • digital reporting efforts.

The full text of Mr Hoogervorst’s speech is available on the IASB’s website.

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Summary of the July 2016 ITCG conference call

22 Aug 2016

The IASB has published notes to the IFRS Taxonomy Consultative Group (ITCG) conference call held on 28 July 2016.

The ITCG discussed:

  • the Guide to Common Practice Content; and
  • Amendments to IFRS 4: Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts.

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

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Saudi companies need to reveal IFRS progress

22 Aug 2016

Listed entities in Saudi Arabia will have to report under IFRSs as adopted by the Saudi Organization for Certified Public Accountants (SOCPA) as off 1 January 2017. The Saudi Capital Market Authority (CMA) now requires disclosures regarding the entities' progress on adoption. The resolution could be seen as the result of lessons learned from IFRS transition in other jurisdictions that did not have such an overview over public entities’ IFRS readiness (for example in the European Union or Korea).

The CMA has called on listed entities to disclose their IFRS transition progress in three phases.

By 1 September 2016, the companies need to disclose the following information on the Saudi Stock Exchange "Tadawul" website:

  • Whether an IFRS transition plan has been prepared;
  • If no transition plan has been prepared yet, the target date for preparing the plan;
  • Whether an IFRS experienced and specialised external consultant has been hired;
  • If no consultant has been hired, the point of time when this will be done or the reasons for deciding against hiring an external consultant;
  • Whether an entity's internal team responsible for the IFRS transition plan and its implementation has been formed;
  • If no team has been formed, the reasons for not doing so;
  • IFRS transition process difficulties the entity may be facing;
  • The target date for the preparation of the first set of IFRS financial statements and the periods covered by such financial statements.

By 30 October 2016, listed entities need to make the following disclosures:

  • Phase one disclosures updates;
  • Whether the accounting policies necessary for the preparation of IFRS financial statements have been approved;
  • If the accounting policies have not been approved yet, the target date for approving the accounting policies;
  • Where the entity is ready to implement IFRS, it would be exempted from these disclosures but would need to disclose that it has readily available IFRS financial statements and the significant effects of implementing IFRS.

By 31 January 2017, listed entities need to make the following disclosures:

  • Phase one and two disclosures updates;
  • Whether IFRS financial statements have been prepared and the periods covered by these financial statements;
  • If no IFRS financial statements have been prepared yet, the reasons for not doing so and the target date for preparing them;
  • The significant effects on the entity as a result of implementing IFRS (if the effects of implementing IFRS are immaterial this would also need to be disclosed);
  • Any hindrances that might affect the listed entity ability to prepare IFRS financial statements;
  • The extent of the listed entity's readiness to prepare IFRS financial statements for the first quarter of 2017 within the applicable regulatory period.

The CMA also notes that it might request additional disclosures it finds to be necessary in relation to the IFRS transition plan. Please click for access to the announcement on the CMA website.

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New member of the IFRS Foundation Monitoring Board

19 Aug 2016

The IFRS Foundation Monitoring Board (MB), responsible for the oversight of the IFRS Foundation, has published a press release announcing that the Ministry of Finance of the People’s Republic of China (China MOF) is now a member of the Monitoring Board.

In its Final Report on the Review of the IFRS Foundation’s Governance published in February 2012, the Monitoring Board announced that it wants to expand its membership to include up to four members, primarily from major emerging markets. In January 2014, the Brazilian Securities Commission (CVM) and the Financial Services Commission of Korea (FSC) were appointed as members. The application from China triggered an extended screening, however, it was found that the China MOF fulfils the revised membership criteria approved by the Monitoring Board in February 2016. The United States Securities and Exchange Commission (SEC) abstained from the final vote on the membership. Please click for the press announcement on the IASB website.

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Recent integrated reporting developments

19 Aug 2016

A summary of recent developments at the IIRC, IAAER, ACCA, and IAASB.

The International Integrated Reporting Council (IIRC), the International Association for Accounting Education and Research (IAAER), and the Association of Chartered Certified Accountants (ACCA) have published two jointly commissioned research reports on integrated reporting:

  • The first report, Meeting users’ information needs: The use and usefulness of Integrated Reporting, explores how providers of financial capital perceive integrated reporting and its potential for providing decision-useful information through interviews with senior capital market participants and other significant reports users. The report highlights investors’ information needs and identifies the key challenges to widespread adoption of integrated reporting. It is available here on the ACCA website.
  • The second report, Factors affecting preparers’ and auditors’ judgements about materiality and conciseness in Integrated Reporting, explores the issues of materiality and conciseness in integrated reporting from the perspectives of corporate report preparers, company auditors and users of reports. Evidence was gathered about current practices and issues faced by practitioners in determining materiality and conciseness in integrated reporting. The report can be accessed here on the ACCA website.

The International Auditing and Assurance Standards Board (IAASB)’s Integrated Reporting Working Group, dedicated to exploring emerging forms of external reporting, has released a Discussion Paper, Supporting Credibility and Trust in Emerging Forms of External Reporting: Ten Key Challenges for Assurance Engagements. The paper explores the factors that can enhance credibility and trust, internally and externally, in relation to emerging forms of external reports, the types of professional services most relevant to these reports, the key challenges in relation to assurance engagements, and the type of guidance that might be helpful in this context. The paper and several supporting documents are available on the IAASB website.

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FASB webcast (lt blue) Image

Joint IASB and FASB webcast on revenue

15 Aug 2016

On 15 September 2016, the IASB and FASB will host a joint webcast to discuss implementation of the requirements in IFRS 15 'Revenue from Contracts with Customers' and ASC 606.

Topics of discussion will include:

  • an overview of the revenue model;
  • an update on recent implementation activities, including standard-setting and the Transition Resource Group for Revenue Recognition;
  • resources available to help with implementation questions;
  • disclosures; and
  • an audience question-and-answer session.

Please click for more information and registration for the webcast on the IASB website.

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