The Consultation Paper proposed framework includes information on the scope of the service performance information reported, the public sector entity's objectives, the achievement of those objectives, and a narrative discussion of the achievement of all the objectives. The Consultation Paper also proposes a standardised service performance information terminology and working definitions to enhance users' understanding of service performance information reported as outlined in the proposed framework.

The Consultation Paper is open for public comment until 15 March 2012. Click for IPSASB press release (link to IFAC website).

The tentative agenda is shown below.

Agenda for the Interpretations Committee Meeting Thursday and Friday, 3 and 4 November 2011

Thursday 3 November (10:00h-17:30h) Introduction Active Committee Projects IAS 37 Provisions, Contingent Liabilities and Contingent Assets and IFRIC 6 Liabilities arising from Participating in a Specific Market—Waste Electrical and Electronic Equipment Use of IFRIC 6 by analogy IAS 32 Financial Instruments: Presentation Put options written over non-controlling interests Review of Tentative Agenda Decisions published in September IFRIC Update IAS 12 Income Taxes Clarification of circumstances in which presumption of manner of recovery of investment property can be rebutted Recognition of deferred tax for single assets in a corporate entity Items for Continuing Consideration IFRIC 15 Agreements for the Construction of Real Estate Clarification of continuous transfer IFRS 3 Business Combinations Definition of a business IAS 7 Statement of Cash Flows Classification of cash payments for deferred and contingent consideration Friday 4 November (09:00h-15:30h) Items for continuing consideration (continued) IFRS 11 Joint Arrangements Acquisition of interest in joint operation IAS 28 Investments in Associates Share of other changes in equity New items for initial consideration IFRIC 12 Service Concession Arrangements Payments to operate Classification of cash flows for construction IAS 38 Intangible Assets Clarification on the application of amortisation method IAS 19 Employee Benefits Classification of payments to encourage early retirement IAS 33 Earnings per Share Non-cumulative pref dividends — EPS calculation Administrative Session Committee work in progress

 

We have posted additional Deloitte observer notes from the meeting (click through for direct access to the notes):

Wednesday, 19 October 2011 (other sessions)

• Leases (IASB-FASB)
  • Receivable and residual approach
  • Variable lease payments and the measurement of the residual asset
  • Presentation statement of comprehensive income
  • Fair value requirement for lease receivables held for sale
  • Lessee transition
  • Lessor transition

Thursday, 20 October 2011

• Financial Instruments – Impairment (IASB-FASB)
  • Relative credit risk approach
  • Transferring out of Bucket 1
  • Disclosures
  • Next steps
• Insurance Contracts (IASB-FASB)
  • Scope – Fixed fee service contracts
  • Presentation – Statement of financial position (SoFP)
  • Eligibility criteria for the Premium Allocation Approach (PAA)

Click here to go to the preliminary and unofficial Notes Taken by Deloitte Observers for the entire meeting.

During his opening remarks, the Japanese Minister for Financial Services mentioned his meeting with the chairman of the IASB from early October and requested BAC members to continue discussions around 11 specific items presented at the previous meeting (see our earlier story). Among these items, JFSA presented a discussion paper on 1) overall design of accounting standards/disclosure system in Japan and 2) analysis of foreign situations/diplomatic policy and international demand. The six-page paper included an analysis as well as six discussion points such as a) consideration points for future deliberation in light of changing financial/economic environment after the financial crisis, b) need for a strategic deliberation with diverse options in mind, watching situations in other countries, c) past and future approach/strategy with regard to the IASB activities and positioning of Japan, d) roles of multiple stakeholders in Japan to implement national strategy, e) matters to be covered in the planned research visit to foreign countries, and f) other matters such as international developments to be considered. Members expressed their views around topics individually. The discussions on this topic would be carried forward to the next meeting. The next meeting is expected to take place in November, it will also cover the second discussion paper distributed by the JFSA focusing on relationship between consolidated financial statement reporting regime to separate financial statement reporting system in light of local laws and regulations as well as Japan's past experience of permitting US GAAP and IFRS only in the consolidated financial statement.

The next session of the BAC has not been formally scheduled. Research visits by certain BAC members are planned later in 2011.

Click for:

• Meeting handout (in Japanese, link to FSA website)
• Official minutes of the previous meeting in August (in Japanese, link to FSA website)
• Our Japan country page.

 

The discussion paper aims to start a debate on business combinations under common control (BCUCC) and how it should be reflected in financial statements. Currently, there are multiple methods used in applying BCUCC, the discussion paper takes the first step to analyse the issues from having multiple methods. The discussion paper also notes that "there is no 'ideal' accounting approach" but goes into three different ways of looking at the problem. Comments are due by 30 April 2012.

Click for:

• EFRAG Press Release (link to EFRAG website)
• Discussion Paper Accounting for Business Combinations under Common Control (PDF 1,844k, link to EFRAG website)

 

In the comment letter, we agree with the views of the exposure draft that deferral of the mandatory effective date of IFRS 9 is necessary due to the level of uncertainty revolving around the IFRS 9 project's timeline. In addition, we agree that limited relief from restating comparatives for entities early applying in a period beginning before 1 January 2012 should not be extended. The following is an excerpt from the letter:

We support the restatement of comparative information whenever this is practicable and provides valuable information to users. However, we note that the basis for restating comparatives as described in IFRS 9(2010): 7.2.1 is limited retrospective application as it only restates those items that continue to be recognised at the date of initial application (being the start of the first reporting period in which the entity applies IFRS 9). This results in comparative information being a mix of IAS 39 (for items derecognised before the date of initial application) and IFRS 9 (for items still recognised at that date). In addition, we note that the transitional requirements of IFRS 1 are not aligned with those for existing IFRS preparers as they require the classification of a first time adopter’s financial items to be based on conditions existing at the date of transition to IFRSs.

We also question whether is its appropriate for many different versions of IFRS 9 to be applied well after the Standard has been updated. We prefer that an early adopter of IFRS 9 apply the latest version of the Standard issued at the beginning of its earliest comparative period, which we believe will reduce the confusion for users trying to determine which version of the Standard an entity should apply.

Click to Download our Comment Letter on Exposure Draft ED 2011/3 — Mandatory Effective Date of IFRS 9 (PDF 28k).

The European Securities and Markets Authority (ESMA) has published the second annual activity report on monitoring enforcement of International Financial Reporting Standards (IFRS) in Europe.

European issuers of financial information have developed significant experience in IFRS accounting which is reflected in the quality of their financial reporting which has improved year on year. Nevertheless, there is still room for improvement. The report finds that even though the disclosure of the possible impact of risks and uncertainties faced by the issuers regarding judgements and estimates used in the preparation of financial information has gained importance in the current economic climate boiler-plate disclosures are still widely used.

Among the recurring issues identified by European enforcers are financial instruments, impairment of non-financial assets, operating segments, share-based payments, non-current assets held for sale and discontinued operations, investments in associates, and revenue recognition.

The report is available on the ESMA website (PDF 128k); it is accompanied by a press release (PDF 32k).

EFRAG has compiled a summary of the seminar – EFRAG: PAST - PRESENT - FUTURE (PDF 506k, link to EFRAG website) – offering insights about the genesis and history of EFRAG and the challenges EFRAG is facing in the coming years.

On IAS Plus, we also offer an Interview with Stig Enevoldsen, Chairman of EFRAG from 2004 until 2010, and a Robert Bruce column Ten Years of EFRAG Achievement.

The International Public Sector Accounting Standards Board (IPSASB) has published Exposure Draft (ED) 46 Recommended Practice Guideline, which is designed to provide good practice guidelines on reporting on the long-term fiscal sustainability of a public sector entity.

The IPSASB notes that the sovereign debt crisis has emphasised the significance of the fiscal condition of governments and other public sector entities to the global economy. There have been heightened concerns about the ability of governments to meet debt servicing obligations and the extent to which they can maintain current policies and meet current and future obligations related to entitlement programs, without raising taxes and contributions or increasing debt to unsustainable levels.

The exposure draft proposes the disclosure of projections of inflows and outflows of resources over the longer term, together with narrative explanations of the main risks facing governments and other public sector entities. This information is designed to permit users of general purpose financial reports of public sector entities to assess the extent to which current policies are sustainable, as complimentary information to the financial statements.

The Recommend Practice Guideline, if finalised, would not be an International Public Sector Accounting Standard (IPSAS) and therefore an entity would not required to comply with it in order to comply with IPSASs.

The ED is open for public comment until 29 February 2012. Click for IPSASB press release (link to IFAC website).

We have posted Deloitte observer notes from most of the sessions held on the first day of the meeting (click through for direct access to the notes):

Wednesday, 19 October 2011 (other sessions)

• Annual Improvements (IASB only)
  • IFRS 13 Fair value measurement — Short-term receivables and payables issue
  • IFRS 3 Business combinations — Contingent consideration guidance issue
• Fair Value Measurement (IASB-FASB)
  • Proposed plan for developing educational material
  • Comments from members of the boards
• Revenue Recognition (IASB-FASB)
  • Disclosures in Interim Reporting Periods

Notes from the session on Leases will be posted soon.

Click here to go to the preliminary and unofficial Notes Taken by Deloitte Observers for the entire meeting.