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Latest edition of EFRAG Insider

19 Nov 2014

The European Financial Reporting Advisory Group (EFRAG) has published a new edition of the publicly available newsletter 'EFRAG Insider'.

16th ESMA enforcement decisions report released

18 Nov 2014

The European Securities and Markets Authority (ESMA) has published further extracts from its confidential database of enforcement decisions taken by European national enforcers. This batch deals with decisions in relation to IAS 1, IAS 7, IAS 12, IAS 16, IAS 18, IAS 32, IAS 36, IAS 38, IAS 40, IFRS 3, IFRS 5, IFRS 6, IFRS 8, and IFRS 13.

The European national en­forcers of fi­nan­cial in­for­ma­tion monitor and review fi­nan­cial state­ments pub­lished by issuers with se­cu­ri­ties traded on a reg­u­lated European market and who prepare their fi­nan­cial state­ments in ac­cor­dance with International Fi­nan­cial Re­port­ing Stan­dards (IFRS) and consider whether they comply with IFRS and other ap­plic­a­ble re­port­ing re­quire­ments, in­clud­ing relevant national law.

ESMA has de­vel­oped a con­fi­den­tial database of en­force­ment de­ci­sions taken by in­di­vid­ual European en­forcers as a source of in­for­ma­tion to foster ap­pro­pri­ate ap­pli­ca­tion of IFRS.

The pub­li­ca­tion of en­force­ment de­ci­sions is designed to inform market par­tic­i­pants about which accounting treat­ments European national en­forcers may consider as com­ply­ing with IFRS, i.e. whether the treat­ments are con­sid­ered as being within the accepted range of those per­mit­ted by IFRS. ESMA con­sid­ers the pub­li­ca­tion of the de­ci­sions, together with the ra­tio­nale behind them, will con­tribute to a con­sis­tent ap­pli­ca­tion of IFRS in the European Union.

Topics covered in the latest batch of extracts, covering the period from August 2012 to March 2014, include:



IAS 1Presentation of Financial Statements
IAS 39Financial Instruments: Recognition and Measurement
IFRS 7Financial Instruments: Disclosures

Disclosure of forborne loans

IFRS 3Business Combinations
IFRS 13Fair Value Measurement

Fair value of consideration paid in shares

IAS 32Financial Instruments: Presentation

Recognition of a liability payable to equity holders

IAS 7Statement of Cash Flows
IAS 16Property, Plant and Equipment
IAS 18Revenue

Presentation of statement of cash flows

IFRS 5Non-current Assets Held for Sale and Discontinued Operations

Presentation of discontinued operations

Presentation of non-current assets held for sale

IAS 12Income Taxes
IFRS 5Non-current Assets Held for Sale and Discontinued Operations

Deferred tax assets upon disposal of a subsidiary

IAS 12Income Taxes
IAS 16Property, Plant and Equipment
IAS 40Investment Property

Accounting for the effects of specific tax regime

IAS 36Impairment of Assets

Key assumptions used in the impairment test of goodwill

IAS 38Intangible Assets
IFRS 6Exploration for and Evaluation of Mineral Resources 

Disclosures related to capitalised costs

IFRS 8Operating Segments

Disclosure of major customers

Click for access to the full report (link to ESMA website).

IFRS Foundation appoints two Trustees

18 Nov 2014

The IFRS Foundation has announced the appointments of Alan Beller and Werner Brandt as Trustees of the IFRS Foundation. The appointments will begin on 1 January 2015 and will expire on 31 December 2017.

Mr Alan Beller was Director of the Division of Corporation Finance of the US Securities and Exchange Commission (SEC) and a Senior Counsellor to the SEC from January 2002 until February 2006. Mr Beller's tenure at the SEC saw far-reaching corporate governance, financial disclosure and securities offering reforms, including the implementation of the corporate provisions of the Sarbanes-Oxley Act of 2002.

Dr Werner Brandt is the Chairman of the Board of the German Financial Reporting Enforcement Panel (FREP) and was a member of the Board of the Accounting Standards Committee of Germany (DRSC) from 2003 to 2011, in which he played a leading role in defining the future positioning and structure of the DRSC.

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

Agenda for the December 2014 ASAF meeting

18 Nov 2014

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 4-5 December 2014. The meeting will discuss a number of the IASB's active projects, including the disclosure initiative, leases, insurance contracts, and the upcoming agenda consultation.

The agenda for the meeting is summarised below:

Thursday, 4 December 2014 (9:35-17:15)

  • Disclosure initiative
  • Emissions trading schemes
  • Rate-regulated activities
  • Leases
  • Post-employment benefits
  • Dynamic risk accounting

Friday, 5 December 2014 (9:00-15:25)

  • Equity method of accounting
  • Foreign currency translation
  • Inflation accounting
  • Insurance contracts
  • Current projects and research update
  • 2015 Agenda Consultation
  • Agenda planning and debrief

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

2015 IFRS Blue Book — Coming soon

18 Nov 2014

The IFRS Foundation has announced that the '2015 IFRS Consolidated without early application' will be published in December 2014. This volume (nicknamed the "Blue Book") will contain all official pronouncements that are mandatory on 1 January 2015. It does not include IFRSs with an effective date after 1 January 2015. The Blue Book differs from the traditional Bound Volume (the "Red Book"), which includes all pronouncements issued at the publication date, including those that do not become mandatory until a future date.

The Blue Book will sell for £70 plus shipping (academic, developing country, and volume discounts apply). You will find more information and ordering details here.

Japan updates list of 'designated' IFRSs

17 Nov 2014

The Financial Services Agency (FSA) of Japan has announced that additional IFRSs were designated for use by companies voluntarily applying IFRSs in Japan. The announcement effectively includes all IASB pronouncements issued up to 30 June 2014.

Newly designated IFRSs include:

  • IFRS 14 Regulatory Deferral Accounts;
  • IFRS 15 Revenue from Contracts with Customers;
  • the amendments bringing bearer plants into the scope of IAS 16;
  • the amendments regarding the clarification of acceptable methods of depreciation and amortisation; and
  • the amendments regarding the accounting for acquisitions of an interest in a joint operation.

Click for the FSA press release (in Japanese only, link to FSA website).

Prada reiterates the case for global accounting standards

17 Nov 2014

The Chairman of the IFRS Foundation Trustees, Michel Prada, delivered a speech entitled 'Korea and IFRS' at a seminar hosted by the Korean Accounting Standards Board (KASB). In his speech, he praised the efforts of the KASB and provided an update on the progress of achieving a single set of global accounting standards.

Following the theme of his recent speeches made in Japan and China earlier this month, Mr Prada provided a case for global accounting standards and uses the actions taken in Korea to serve as “an exemplary role model in the region.” 

Mr Prada states that businesses in Korea benefit from full adoption of IFRS because they can report a set of financial statements that are familiar with investors around the world. According to a recent KASB review of the consequences of the move to IFRS, the introduction of IFRS has “led to an improvement in the quality of earnings, as well as improving comparability between different Korean companies as well as their international peers.” Mr Prada noted that other jurisdictions have experienced similar conclusions. He also states that the continued economic and financial globalisation has caused the G20, International Monetary Fund, World Bank and IOSCO to support the work of the IFRS Foundation (IFRSF) and the IASB.

In addition, Mr Prada commented on progress made in the development of high quality, global accounting standards, which included IFRSF study on the use of IFRS around the world and the requirement of 114 out of 138 countries to require the use of IFRS for all or most public companies. Significant progress has been made in jurisdictions that have not yet required the use of IFRS, such as China, India, Japan and United States.

Lastly, he reflected on the “evolution” of the IFRSF and IASB and how the upcoming public consultation on the structure and effectiveness of the organisation will provide stakeholders with an opportunity to voice their comments.

The full text of Mr Prada's speech is avail­able on the IASB's website.

EU Directive on disclosure of non-financial and diversity information published

17 Nov 2014

The Directive on disclosure of non-financial and diversity information by large companies and groups addressing environmental, social, and governance (ESG) issues has been published in the Official Journal of the EU on 15 November 2014.

According to the new Directive, large public-interest companies with more than 500 employees are required to disclose relevant and material environmental and social information in their annual reports. Disclosures shall be provided at group level, rather than by each individual company within a group.

Large listed companies will also be required to provide information on their diversity policy, covering age, gender, geographical diversity, and educational and professional background. Disclosures shall set out the objectives of the policy, how it has been implemented, and results.

The Directive enters into force on the twentieth day after its publication. Member States have to transpose the Directive into national law by 6 December 2016. The new provisions have to be applied to all undertakings within the scope of the Directive for the financial year starting on 1 January 2017 or during the calendar year 2017.

Please click for access to the full text of the Directive in the Official Journal (available in all languages of the EU).

Association of German Banks supports IASB

13 Nov 2014

The 'Bundesverband deutscher Banken' (Association of German Banks), representing more than 200 private commercial banks in Germany, has contributed to the discussion around IFRSs in Europe and voiced strong support for existing structures and processes.

Without being a direct response to the European Commission's questionnaire seeking respondents' views on the impact of International Financial Reporting Standards (IFRS) in the European Union, the timing and content of a booklet The future of IFRSs in Europe published today shows that not all European voices criticise and question the application of full and unaltered IFRSs in Europe.

The booklet claims that the debate on appropriate accounting reveals fears and worries that prove to be unwarranted on closer scrutiny. It therefore provides a detailed overview of how an IFRS is developed and becomes applicable law in Europe. The booklet concedes that the process for developing IFRSs is "unlike the conventional legislative process we are familiar with in Europe", but it also notes that the IASB's standard-setting process has been continuously improved over the past ten years to strengthen transparency and participation and the setting-up of a Monitoring Board in 2009 has established a direct link to the major regulators around the world.

Therefore, the German private banks view recent international developments (first in the US, where the FASB turned away from some convergence projects, and now in Europe, where politicians call for more of a European influence and maybe a European version of IFRSs) critical:

We take a critical view of these developments. So that it can continue to perform its job as an independent global standard-setter, the IASB should not be allowed to become a plaything of diverging national interests. Purely national interests inevitably have to take a back seat in efforts to develop an internationally accepted financial reporting convention. The IASB’s work as a standard-setter should therefore be kept largely free of political influence in the future as well. This is the only way to ensure high-quality standards and uphold the IASB's good reputation in the long term.

The banks also believe that any tinkering with the European endorsement process would be harmful:

Any European go-it-alone approach must be avoided, however. The non-recognition of individual IFRSs in Europe (carve-out) or the establishment of European accounting rules would be at odds with the target of uniform international accounting standards. The comparability of financial information would be impaired; the result would be a competitive handicap for internationally operating companies based in Europe.

In the press release accompanying the publication of the booklet, the German banks even express the hope that the endorsement process of IFRS 9 Financial Instruments, which is currently postponed in the EU, would be taken up soon and concluded speedily.

The booklet also states that a strict and efficient enforcement is needed to reap the benefits of using international standards. However, similar to the points made above, the banks maintain that European Securities and Markets Authority (ESMA) must avoid interfering with international processes:

We support ESMA's activities as long as there is a strict separation between standard-setting and enforcement. On the other hand, setting actual accounting and valuation rules is not ESMA's job in our view, but should be left to the IASB and the IFRS Interpretations Committee.

Please click for the following information on the website of the Association of German Banks:

  • Access to the booklet The future of IFRSs in Europe(it can either be downloaded or ordered as printed copy free of charge):
  • Press release (German language only)

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.