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Agenda for the October 2016 ITCG meeting

06 Oct 2016

The agenda is available for the next meeting of the IFRS Taxonomy Consultative Group (ITCG), which will be held in London on 25 October 2016.

The agenda is summarised below:

Tuesday 25 October 2016 (9:00-16:25)

  • Welcome
  • Better Communication
  • Update on activities
  • Principle-based reporting and the technological world
    • Introduction
    • Small group discussions
    • Feedback from small group discussions
  • Entity-specific disclosures – task force progress
  • IFRS Taxonomy content and other areas
  • IFRS Technology and the ITCG
  • UK Financial Reporting Lab – Digital Future

Agenda papers for this meeting will be made available on the IASB website closer to the meeting.

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IFRS 9 resolution carried by European Parliament

06 Oct 2016

The proposed resolution regarding IFRS 9 'Financial Instruments' was just carried in the plenary session of the European Parliament in Strasbourg.

For the content of the resolution please see yesterday's news item. A last minute amendment to the proposed resolution was rejected.

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Agenda and papers for the first public DPOC meeting

06 Oct 2016

The Due Process Oversight Committee (DPOC) will meet in New Delhi on 13 October - for the first time in public session.

The agenda for the meeting is summarised below:

Thursday, 13 October 2016

Due Process Oversight Committee meeting (8:15–9:25 IST (local time); 3:45–4:55 BST)

  • Introduction and Actions from DPOC meeting held on 25 May 2016
  • Technical Activities: Key Issues and Update
  • 2015 Agenda Consultation - Summary of the Consultation Process
  • Effects Analysis: Follow-up on implementation of recommendations of the report of the Effects Analysis Consultative Group
  • Benchmarking: A further consideration
  • Annual review of consultative groups
  • Reporting Protocol: General reports
  • Education Initiative: Due process update
  • Correspondence update
  • Summary

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

The agenda and papers for the public session of the general Trustees' meeting have not been made available yet.

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IASB (International Accounting Standards Board) (blue) Image

Papers for the IASB research forum and registration for webcast

06 Oct 2016

The third IASB Research Forum will form part of the 2016 Contemporary Accounting Research (CAR) conference that will take place in Waterloo, Ontario, Canada on 15 and 16 October 2016. The research papers are now available as is the opportunity to register for a webcast of the forum.

The following papers will be presented and discussed. The first three papers also feature IASB discussants:

  • Moving the Conceptual Framework Forward: Accounting for Uncertainty
  • Assets and Liabilities: When do they Exist?
  • Relative Effects of IFRS Adoption and IFRS Convergence on Financial Statement Comparability
  • How Does Intrinsic Motivation Improve Auditor Judgment in Complex Audit Tasks?
  • Relating Product Prices to Long-Run Marginal Cost: Evidence from Solar Photovoltaic Modules
  • How Quickly Do Firms Adjust to Optimal Levels of Tax Avoidance?
  • One Team or Two? Investigating Relationship Quality between Auditors and IT Specialists: Implications for Audit Team Identity and the Audit Process

All papers can be downloaded from the website of the Canadian Academic Accounting Association (CAAA). Also available is a webcast sponsored by the Canadian Accounting Standards Board (AcSB). Viewers around the world can access the research and discussions presented at the event. More information is here.

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European Parliament to vote on IFRS 9 resolution tomorrow

05 Oct 2016

Yesterday, the plenary of the European Parliament debated a proposed resolution regarding IFRS 9 'Financial Instruments'. A vote on the resolution is scheduled for tomorrow.

The resolution was developed by the Parliament's Committee on Economic and Monetary Affairs (ECON) and relates to several questions submitted to the Commission, specifically, how the Commission intends to address concerns regarding potential negative effects of IFRS 9 on long-term investment, how the Commission intends to address the concerns caused by the misalignment of the effective dates of IFRS 9 and the new upcoming insurance standard (IFRS 17) and whether the Commission considers the provisions issued by the IASB on 12 September 2016 to be adequate and satisfactory for the EU, and how the Commission intends to address potential negative effects of IFRS 9 on financial stability.

In this context, the resolution contains several observations on IFRS 9 as well as calls on various parties to ensure that IFRS 9 contributes to the European public good. The following aspects deserve mentioning:

The European Parliament

  • notes that IFRS 9 constitutes one of the major responses of the IASB to the financial crisis and notes that implementation efforts are already in progress;
  • acknowledges that IFRS 9 constitutes an improvement on IAS 39;
  • notes that IFRS 9 calls for a great deal of judgement in the accounting process and calls for guidance to be developed by the European Supervisory Authorities in cooperation with the Commission and EFRAG in order to prevent any abuse of management discretion;
  • calls on the IASB and EFRAG to strengthen their impact analysis capacity, notably in the field of macroeconomics;
  • notes the misalignment of the effective dates of IFRS 9 and the upcoming new insurance standard IFRS 17 but also notes that the IASB has issued amendments to IFRS 4 addressing some of the concerns;
  • calls on the Commission to make sure that IFRS 9 serves the EU’s long-term investment strategy;
  • calls on the Commission to ensure compliance of IFRS 9 with the Accounting Directive and to cooperate wherever necessary with the IASB and national and third-country standard setters;
  • calls on the Commission, together with the European Supervisory Agencies (ESAs), the ECB, the European Systemic Risk Board (ESRB) and EFRAG, to closely monitor the implementation of IFRS 9 in the EU and to prepare an ex post impact assessment no later than June 2019; and
  • calls on the IASB to conduct a post-implementation review (PIR) of IFRS 9 in order to identify and assess unintended effects of the standard, in particular on long-term investment.

Resolutions are not legally binding but will serve as guidance and reference in future EU law-making processes. Please click for the full text of the proposed resolution on the European Parliament website. (Note that you can choose your preferred language in the top right corner (translation is in progress).)

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ISAR workshop on IFRS 15 and IFRS 16

05 Oct 2016

The thirty-third session of the United Nations Conference on Trade and Development (UNCTAD) Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting (ISAR) is currently being held in Geneva. Before the session, there was a workshop on 3 October on recent developments on IFRS.

First, Hugh Shields, Executive Technical Director at the IASB, gave a general presentation on trends in financial and corporate reporting touching primary financial statements, the disclosure initiative, and corporate reporting. His presentation is available on the UNCTAD website.

This was followed by a block on IFRS 15 Revenue from Contracts with Customers with the following speakers (links to their presentations on the UNCTAD website):

The afternoon was dedicated to IFRS 16 Leases. Speakers were (links to their presentations on the UNCTAD website):

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Recent sustainability and integrated reporting developments

05 Oct 2016

A summary of recent developments at UNCTAD/ISAR, CDSB/CDP, GRI, and IIRC.

The thirty-third session of the United Nations Conference on Trade and Development (UNCTAD) Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting (ISAR) is currently taking place in Geneva. One of the two main agenda items is "Enhancing the role of reporting in attaining the Sustainable Development Goals: Integration of the environmental, social and governance information into companies’ reporting". In order to facilitate deliberations by the delegates, the UNCTAD secretariat has prepared a note reviewing issues related to the enhancement of the role of reporting in attaining the goals, through the integration of environmental, social and governance information into company reporting. Please click to access the note on the UNCTAD website. The presentations of the individual delegates participating in the round tables are available through this UNCTAD page.

The Carbon Disclosure Project (CDP) and the Climate Disclosure Standards Board (CDSB) have developed a reporting handbook that shows what environmental reporting in line with the EU non-financial reporting Directive could look like. The handbook sets out a series of examples from annual reports of European companies to show how companies could respond to the upcoming requirements and provides additional tips and highlights examples that are especially useful in providing decision-useful information. Please click to access the handbook on the CDSB website.

The Global Reporting Initiative (GRI) has announced that the new GRI Standards will officially launch on 19 October 2016. The press release announcing the launch offers access to a host of additional information including registration for an introductory webinar and free launch events. More information is available on the GRI website.

Also from GRI comes a new publication intended to inspire SMEs to more sustainability reporting. Sustainability reporting by large and multinational companies has become commonplace over the last decade, however among SMEs the practice of sustainability reporting is not as widespread. Please click to download Small Business, Big Impact: SME Sustainability Reporting from Vision to Action from the GRI website.

The International Integrated Reporting Council (IIRC) has produced its first integrated report – a communication of how its strategy, governance, performance and prospects, in the context of its external environment, lead to the creation of value. The IIRC will build on the experience of developing this report to further improve how it communicates its value creation story as well as its integrated thinking. The report cann be accessed through the IIRC website.

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Second quantitative study on goodwill and impairment

04 Oct 2016

Similar to the European Financial Reporting Advisory Group (EFRAG), the Accounting Standards Board of Japan (ASBJ) took up research on goodwill and goodwill impairment following the post-implementation review of IFRS 3 'Business Combinations'. Originally, these two research efforts were not connected, only relatively late in the process data and findings were combined and exchanged. Therefore, the ASBJ research report now published is a companion piece to the EFRAG report published last week but not identical.

The main findings presented in the ASBJ report are:

  • For all stock market indices analysed (Japan, United States, Australia, Europe), the total amount of goodwill and the amount of goodwill per company increased from 2005 to 2014.
  • The stock market indices of the United States and Europe recognised larger amounts, both in the total amount of goodwill and the amount of goodwill per company, compared to the stock market indices of Japan and Australia.
  • The stock market indices of the United States and Europe have consistently shown higher ratios of goodwill to net assets and of goodwill to market capitalisation.
  • In 2014, 32% of the companies regognising goodwill in the United States and 25% of the companies regognising goodwill in Europe had goodwill that exceeded 50% of their net assets. Furthermore, 14% of those companies in the Unites States and 11% of those companies in Europe had goodwill that exceeded 100% of their net assets. A few companies in the United States, Europe and Australia had goodwill that exceeded 100% of their market capitalisation.
  • In the United States and Europe, the market capitalisation exceeded by a large portion the carrying amount of equity in the statement of financial position.
  • Explicit time lags were not observed by analysing the correlation between impairment and the price or points of the stock market index.
  • Fully expensing goodwill judged by the data collected takes on average 82 in the United States, 37 in Europe, 9 years in Japan, and 34 years in Australia.

Please click to access the study and a corresponding press release on the ASBJ website. The EFRAG's research report can be accessed here.

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European Parliament 'At a Glance' publication on IFRS 9

04 Oct 2016

The European Parliament think tank that produces supporting documents to help shape new European legislation has published an issue of its 'At a Glance' series that deals with the endorsement of IFRS 9 'Financial Instruments'.

The document offers some general background on the topic and then links to the following additional documents and studies for a deeper understanding of the endorsement of IFRS 9 Financial Instruments:

  • The Basis of the Endorsement Procedure for IFRS Accounting Standards
  • IFRS Accounting Standards Endorsement Procedure
  • Changes to Accounting & Solvency Rules: (possible) Impact on Insurance & Pensions
  • IFRS Endorsement Criteria in Relation to IFRS 9
  • The Significance of IFRS 9 for Financial Stability and Supervisory Rules
  • Impairments of Greek Government Bonds under IAS 39 and IFRS 9: A Case Study
  • Accounting for Financial Instruments: the FASB and IASB IFRS 9 Approaches

Please click to access the At a Glance publication on the European Parliament website.

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Joint investor outreach on leases and recent IFRS 4 amendments

04 Oct 2016

The European Financial Reporting Advisory Group (EFRAG), the European Federation of Financial Analysts Societies (EFFAS), the Italian stanard-setter Organismo Italiano di Contabilità (OIC), and the Associazione Italiana degli Analisti e Consulenti Finanziari (AIAF) will host a joint event on 29 November in Milan. The event will be held in English and will also include speakers from the IASB.

The first part of the event will address IFRS 16 Leases and will seek users’ views on a series of topical issues. The second part will discuss the amendments to IFRS 4 Insurance Contracts that allow companies that issue insurance contracts to apply the overlay approach and give companies who have predominantly insurance activities a temporary optional exemption from applying IFRS 9 Financial Instruments until 2021.

For more information, see the press release on the EFRAG website.

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