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ASBJ (Accounting Standards Board of Japan) Image
EFRAG (European Financial Reporting Advisory Group) (dk green) Image

Second ASBJ and EFRAG bilateral meeting

29 Jun 2015

Representatives of the European Financial Reporting Advisory Group (EFRAG) and the Accounting Standards Board of Japan (ASBJ) held a bilateral meeting in Brussels on 22 and 23 June 2015. The EFRAG and ASBJ provided updates on their respective projects and exchanged views on the development of accounting standards.

EFRAG and ASBJ discussed the following topics:

In addition, the ASBJ and EFRAG discussed how they can work together more effectively on research activities including the topic of impairment and amortisation of goodwill on which both parties and the Organismo Italiano di Contabilità (OIC) have been working together.

The next meeting between the EFRAG and ASBJ will be held in Tokyo in 2016.

A press release is available on the EFRAG website.

FEE (Federation of European Accountants - Fédération des Experts-comptables Européens) (lt green) Image
European Union Image

FEE supports IFRS 9 deferral for insurance companies

26 Jun 2015

The Federation of European Accountants (Fédération des Experts-comptables Européens, FEE) has responded to the EFRAG draft endorsement advice on IFRS 9 'Financial Instruments'.

In its response to the draft endorsement advice published in May 2015, FEE agrees with the conclusion that adoption of IFRS 9 is conducive to the European public good and states that "given the improvements in reporting mandated by IFRS 9 we would welcome its swift adoption".

The principal comment in the comment letter FEE has submitted, however, relates to the potential deferral of IFRS 9 for insurance business activities while the IASB finalises its forthcoming insurance standard. The letter states:

We agree with EFRAG that the European Commission should ask the IASB to defer the effective date of application of IFRS 9 for institutions with significant insurance activities, or alternatively identify and assess any other workable solutions to address accounting mismatches that may obscure performance reporting by those institutions. FEE stresses the importance of having an international solution for this matter. A Europe-only deferral would de facto be a carve-out from full IFRS, which in our view should generally be avoided as they do not come without consequences.

FEE also states that any deferral of IFRS 9 should be limited in duration and optional.

Please click to access the full comment letter on the FEE website.

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Agenda for the July 2015 ASAF meeting

25 Jun 2015

The International Accounting Standards Board (IASB) has released the tentative agenda for the meeting of the Accounting Standards Advisory Forum (ASAF), which is to be held at the IASB's offices in London on 16-17 July 2015. The meeting will discuss a number of the IASB's active projects, including insurance contracts, discount rates, conceptual framework, provisions and contingent liabilities, disclosure initiative, dynamic risk management, pollutant pricing mechanisms, rate-regulated activities, and revenue.

The agenda for the meeting is sum­marised below:

Thursday, 16 July 2015 (10:00-17:15)

  • Insurance contracts
  • Discount rates
  • Conceptual framework
  • Provisions and contingent liabilities (IAS 37)

Friday, 17 July 2015 (8:45-15:30)

  • Disclosure initiative
  • Dynamic risk management: a portfolio revaluation approach to macro hedging
  • Pollutant pricing mechanisms
  • Rate-regulated activities
  • Revenue from contracts with customers
  • Project update and feedback

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

ASAF (Accounting Standards Advisory Forum) (mid blue) Image

ASAF membership update

24 Jun 2015

The IFRS Foundation Trustees have announced the new composition of the Accounting Standards Advisory Forum (ASAF) for the next three years. The ASAF is chaired by the IASB and includes 12 other members from various locations around the world.

The composition, which is effective immediately, consists of the following:

  • Africa region:
    • Financial Reporting Council of South Africa.
  • Asia-Oceania region:
    • Asian-Oceanian Standard-Setters Group.
    • Accounting Standards Board of Japan.
    • Australian Accounting Standards Board working with the New Zealand Accounting Standards Board.
    • China Accounting Standards Committee.
  • European region:
    • European Financial Reporting Group.
    • Accounting Standards Committee of Germany.
    • Autorité des normes comptables.
    • Organismo Italiano di Contabilità.
  • Americas region:
    • Group of Latin American Accounting Standard Setters.
    • Canadian Accounting Standards Board.
    • Financial Accounting Standards Board.

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

European Union Image

European Commission concludes evaluation of the IAS Regulation

19 Jun 2015

The European Commission has published a report on the evaluation of its Regulation on the application of International Financial Reporting Standards (IFRS). The evaluation aimed at establishing whether the initial objectives of the IAS Regulation are still relevant and at identifying areas for improvement in the functioning of the IAS Regulation, if needed.

The key findings of the evaluation launched in August 2014 show that IFRSs were successful in creating a common accounting language for capital markets. Preparers claimed mostly positive experiences regarding their application of IFRSs and stated that in most cases benefits outweighed costs. Investors also largely supported IFRS for improving the transparency and comparability of financial statements. In addition, most stakeholders considered that the process through which IFRS become part of EU law works well; the recent reform of the European Financial Reporting Advisory Group (EFRAG) was supported.

However, the report also identifies room for improvement in some areas. Respondents feel that the collaboration in the endorsement process could be enhanced to improve timeliness and to allow for a more holistic consideration of standards with other aspects of EU law. They also stated that while an endorsement process remains necessary to ensure that the standards developed by the IASB meet EU criteria and are conducive to the European economy, procedures could be simplified.

All in all the Commission concludes that:

  • The key objectives of the IAS Regulation have been met.
  • Evidence suggests that the existing scope of the Regulation and the options given to Member State are appropriate.
  • The Commission supports IFRS as global standards and continues to urge the US SEC to adopt IFRS for use by its domestic companies.
  • The effectiveness and efficiency of the Regulation depend on the quality of the standards themselves which should continue to be appropriately assessed during their development and endorsement.
  • The Commission encourages Member States to apply ESMA enforcement guidelines.

Please click for the following information on the European Commission's website:

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Hungary extends the use of IFRSs to individual accounts

19 Jun 2015

On 12 June 2015, the Hungarian Government decided to extend the use of IFRSs as adopted in the European Union to individual accounts of Hungarian companies in a phased approach from 2016 to 2018.

Under the European IAS Regulation, European companies listed in an EU securities market, including banks and insurance companies, have to prepare their consolidated financial statements in accordance with IFRSs. The member states of the European Union have the option the require or permit the use of IFRSs in separate company financial statements and/or in the financial statements of companies whose securities do not trade on a regulated securities market.

The Hungarian Government has now decided to extend the use of IFRSs to the individual accounts of Hungarian companies as follows:

  • Voluntary application of IFRSs from 1 January 2016 for companies whose securities are traded in the European Economic Area (EEA) or whose parent company prepares its consolidated financial statements under IFRS and requires its subsidiaries to prepare IFRS financial statements;
  • Mandatory application of IFRSs from 1 January 2017 for companies whose securities are traded in the EEA and most financial institutions;
  • Voluntary application of IFRSs from 1 January 2017 for insurance companies and companies with obligatory audit of their financial statements;
  • Mandatory application of IFRSs from 1 January 2018 for the remaining financial institutions.

The resolution was recorded in the official gazette on 12 June 2015 as decision 1387/2015. (VI. 12.) (Hungarian language only).

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IASB proposes amendments to IAS 19 and IFRIC 14 on pension accounting

18 Jun 2015

The International Accounting Standards Board (IASB) has published an Exposure Draft (ED) of proposed amendments to IAS 19 'Employee Benefits' and IFRIC 14 'IAS 19 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction'. The amendments address two issues submitted to the IFRS Interpretations Committee. Comments are requested by 19 October 2015.



Requests were submitted to the IFRS Interpretations Committee to clarify:

  • the calculation of current service cost and net interest when an entity remeasures the net defined benefit liability (asset) when a plan amendment, curtailment or settlement occurs; and
  • whether a trustee's power to augment benefits or to wind up a plan affects the employer's unconditional right to a refund and thus, in accordance with IFRIC 14, restricts recognition of an asset.

As both issues relate to IAS 19 and as the IASB believes that a single package of amendments carried out at the same time would reduce the administrative burden on those responding to both issues, the IASB decided to deal with the two issues in one narrow-scope Exposure Draft.


Suggested changes

The amendments proposed in ED/2015/5 Remeasurement on a Plan Amendment, Curtailment or Settlement/Availability of a Refund from a Defined Benefit Plan (Proposed amendments to IAS 19 and IFRIC 14) are:

Remeasurement on a plan amendment, curtailment or settlement

The IASB proposes:

  • When the net defined benefit liability or asset is remeasured on a plan amendment, curtailment or settlement, the current service cost and the net interest for the period after the remeasurement are determined using the assumptions used for the remeasurement.
  • The net interest for the remaining period is determined based on the remeasured net defined benefit liability or asset.
  • The current service cost and the net interest in the current reporting period before a plan amendment, curtailment or settlement are not affected by the past service cost or a gain or loss on settlement.
  • These amendments should be applied retrospectively, but the IASB proposes providing an exemption for adjustments of the carrying amount of assets outside the scope of IAS 19.

Availability of a refund from a defined benefit plan

The IASB proposes:

  • When an entity determines the availability of a refund from a defined benefit plan, amounts that other parties can use for other purposes are not included in the amount of the surplus that an entity recognises as an asset on the basis of a future refund.
  • A gradual settlement should not be assumed if other parties can wind up the plan without the entity's consent.
  • The availability of a refund is not affected by other parties' power to make investment decisions without changing the benefits for plan members.
  • When an entity determines the availability of a refund and a reduction in future contributions, the entity takes into account the statutory requirements that are substantively enacted as well as constructive obligations and terms and conditions that have been contractually agreed.
  • Regarding the interaction between the asset ceiling and the past service cost or a gain or loss on settlement, IAS 19 shall clarify that the past service cost or a gain or loss on settlement is measured and recognised in profit or loss in accordance with the existing requirements in IAS 19 and changes in the effect of the asset ceiling are recognised in other comprehensive income.


Effective date and transition requirements

The ED does not contain a proposed effective date. However, the ED proposes that the amendments would be applied retrospectively and that early application should be permitted.


Additional information

Please click for:


IFRS Foundation (blue) Image

IFRS Foundation publishes teaching material for education initiative

17 Jun 2015

The IFRS Foundation has published the third part of its comprehensive, framework-based IFRS teaching material for its education initiative. The material is free to download and is designed to enhance educators’ teaching about IFRSs and to help students develop their abilities to make the necessary estimates and judgments when applying IFRSs and the IFRS for SMEs.

The material covers the accounting for liabilities, classification of financial instruments with characteristics of equity, forward contracts, and financial assets and liabilities. In addition, the material is presented in three stages to ac­com­mo­date students at different levels:

  • Stage 1 — A student’s first financial reporting course.
  • Stage 2 — A financial reporting course midway to qual­i­fy­ing as a CA or CPA.
  • Stage 3 — A course im­me­di­ately before qual­i­fy­ing as a CA or CPA.

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

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XBRL (eXtensible Business Reporting Language) (mid blue) Image

IFRS Foundation publishes proposal related to IFRS Taxonomy 2015

17 Jun 2015

The IFRS Foundation has published “Proposed Update 1 to the IFRS Taxonomy” for public comment.

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.

Comments on the proposed update are due by 17 August 2015.

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

IASB document (blue) Image

IASB completes post-implementation review of IFRS 3

17 Jun 2015

The IASB has completed its post-implementation review (PIR) of IFRS 3 'Business Combinations'. The review concluded that there is general support for IFRS 3 and its related Standards; however, there are several aspects where additional research is needed.

The PIR report assessed in­for­ma­tion gathered from academic lit­er­a­ture as well as feedback from (1) investors and other financial statement users and (2) preparers, auditors, and reg­u­la­tors. It showed general support for the “usefulness of reported goodwill, other intangible assets and goodwill impairment.” However, views were mixed on certain elements of the standard, including the following:

For investors

  • Subsequent accounting for goodwill.
  • Separate recognition of intangible assets.
  • Measurement of non-controlling interests
  • Subsequent accounting for contingent consideration.

For preparers, auditors, and regulators

  • Definition of a business.
  • Fair value measurement.
  • Impairment test for goodwill.
  • Contingent payments to selling shareholders who become employees.

The area of amortisation of goodwill was recently covered in a research paper by the Accounting Standards Board of Japan (ASBJ) and an earlier discussion paper by a joint-research group which included the ASBJ, EFRAG, and OIC to provide their observations on the topic in order to stimulate a global discussion.

On the basis of the PIR report, the IASB added to its agenda two research projects that will focus on:

  • Effectiveness and complexity of testing goodwill for impairment.
  • Subsequent accounting for goodwill.
  • Challenges related to applying the definition of a business.
  • Identification and fair value measurement of intangible assets such as customer relationships and brand names.

For more information, see the press release and the PIR report on the IASB’s website. In addition, see our project page on the PIR of IFRS 3.

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