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IASB Chairman speaks on upcoming insurance standard

08 Sep 2016

On 8 September 2016, IASB Chairman Hans Hoogervorst gave a speech wh ere he reported on the progress of the use of IFRS around the world, the upcoming insurance contracts standard, and ways the IASB will enhance their communication efforts.

  • Use of IFRS around the world — Mr Hoogervorst gave a brief update on the use of IFRS in each region. Specifically, he noted that an area which had seen a lot of progress is in Asia and the Middle East.
  • Insurance contracts — Mr Hoogervorst stated that the insurance contracts standard is currently being drafted by its staff and are producing an effect analysis. He provided examples which illustrated the lack of comparability between insurance companies around the world and stressed the urgent need for the new standard to be out as soon as it can.
  • Enhance communication — Mr Hoogervorst commented on the need to evaluate how information is presented in financial statements in order improve the organization of data and to increase comparability between them.

Please click to access the full text of Mr Hooger­vorst's speech on the IASB website.

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Agenda for the September 2016 ASAF meeting

08 Sep 2016

The International Accounting Standards Board (IASB) has released an agenda for the meeting of the Accounting Standards Advisory Forum (ASAF), which is to be held at the IASB's offices in London on 29 September 2016.

The agenda for the meeting is sum­marised below:

Thursday, 29 September 2016 (9:15-17:30)
  • Research report Information Needs of Users of New Zealand Capital Markets Entity Reports
  • Rate-regulated Activities
  • Conceptual Framework:
    • Measurement
    • Financial Performance and Measurement
    • Other Comprehensive Income
  • Definition of a Business
  • Project updates and agenda planning
  • Feasibility Studies
  • Working with National standard-setters (including support for the Disclosure Initiative)

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

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ASBJ submits paper for the ASAF discussion of the Conceptual Framework

07 Sep 2016

During the upcoming meeting of the Accounting Standards Advisory Forum (ASAF) at the IASB's offices in London on 29 September 2016, members will discuss the question of measurement in the Conceptual Framework. The Accounting Standards Board of Japan (ASBJ) has submitted a paper on 'The Linkage between Financial Performance and Measurement' for the discussion.

In the paper, the ASBJ argues two points:

  • As long as the statement of profit or loss is the primary source of information about an entity’s financial performance, the Conceptual Framework should, at a minimum, describe the fundamental characteristics that information about profit or loss should possess.
  • In order to calculate profit or loss that is useful, the measurement basis should be selected appropriately from the perspective of the statement of financial position and from the perspective or the statement(s) of financial performance, respectively. If the measurement basis differ, the difference in the changes in the measurements should be included in OCI.

Please click for access to the full paper on the ASBJ website.

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IFRS Foundation adds 4 new jurisdiction profiles on the use of IFRS around the world

07 Sep 2016

The IFRS Foundation has added 4 new jurisdiction profiles on the use of IFRS, bringing the total number of profiles completed to 147 jurisdictions.

The following four new ju­ris­dic­tion profiles were added:

  • Liberia — Adopted IFRS and the IFRS for SMEs; effective 31 December 2018, early application encouraged.
  • Malawi — Adopted IFRS for companies with public accountability and the IFRS for SMEs for companies with nonpublic accountability.
  • Namibia — Requires IFRS for all public interest entities and permits the use of the IFRS for SMEs for entities without public accountability.
  • Timor-Leste — Permits the use of IFRS and is developing its own standards based off of IFRS.

The profiles and analyses are available through the press release on the IASB's website.

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IASB posts webcast on the definition of a business proposals

07 Sep 2016

The IASB has posted a webcast discussing its proposed amendments to the definition of a business in IFRS 3 ‘Business Combinations’.

The webcast, which was hosted by IASB Board Member Mary Tokar and Technical Director Michael Stewart, provided an overview of the proposals, including the two proposed assessment models.

For more information, view the webcast on the IASB’s website.

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Recent integrated and sustainability reporting developments

06 Sep 2016

A summary of recent developments at the IIRC, United Nations SSE, and GRI.

The International Integrated Reporting Council (IIRC) has appointed Richard Howitt, Member of the European Parliament (MEP), as its next Chief Executive Officer (CEO). Mr Howitt will succeed outgoing CEO Paul Druckman on 1 November 2016 and will step down as an MEP to coincide with his appointment. An MEP for over 20 years, Richard Howitt is an architect of the EU’s non-financial information directive. Please click for more information on Mr Howitt's appointment on the IIRC website.

The United Nations Sustainable Stock Exchanges (SSE) initiative has released its 2016 Report on Progress. With 59 exchanges partnering with the SSE initiative, over 70% of listed equity markets have made a public commitment to advancing sustainability in their market. Other key figures include that 12 stock exchanges require ESG reporting as a listing rule, and 11 list green bonds. Please click for the progress report on the UNEP FI website.

GRI and the Swiss State Secretariat for Economic Affairs (SECO) announced the start of the second phase of the Corporate Sustainability and Reporting for Competitive Business (CSRCB) programme, which helps small and medium-sized enterprises (SMEs) in the developing world use sustainability reporting to gain better access to global value chains. Phase two of the CSRCB programme aims at increasing the reporting capacity, creating a conducive reporting environment, and fostering demand for sustainability data. Please click for the press release on the GRI website.

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CMAC call for members

05 Sep 2016

The IASB's Capital Markets Advisory Committee (CMAC) is currently seeking applications for membership after the terms of a number of members expire at the end of 2016.

The CMAC is a group of professional financial analysts who meet three times a year with members of the IASB to provide the views of professional investors on financial reporting issues.

Please click for more information about the CMAC and the call for members on the IASB's website.

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ICAS publishes new professional judgement framework

05 Sep 2016

Since we are increasingly applying principles-based standards, the Institute of Chartered Accountants of Scotland (ICAS) has developed a professional judgement framework distilling the key principles for making a sound judgement.

The framework A professional judgement framework for financial reporting decision making - An international guide for preparers, auditors, audit committees, regulators and standard setters across business and not-for-profit sectors identifies core principles and provides a structured process to guide decision makers through how to make, assess and document significant judgements. It targets significant judgements across narrative and financial reporting including accounting treatment, materiality and disclosures.

The framework is designed to fit within the context provided by applicable accounting standards. It also provides a useful training guide for students or those new to decision making.

Please click to access the framework and a corresponding press release on the ICAS website.

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Summary of the June 2016 joint CMAC-GPF meeting

02 Sep 2016

Representatives from the International Accounting Standards Board (IASB) met with both the Capital Markets Advisory Council (CMAC) and Global Preparers Forum (GPF) in London on 15 and 16 June 2016. Notes from the joint meeting have now been released.

The topics discussed at the meeting included:

  • IASB and Interpretations Committee Update. Members discussed the support of consistent application of IFRSs and the agenda consultation.
  • Materiality. Members discussed a proposed ‘four-step approach’ for making materiality judgements when preparing a financial report:
    • Step 1 — identifying the primary users and their information needs;
    • Step 2 — making a materiality judgement, considering quantitative factors as well as qualitative entity-specific and environmental factors;
    • Step 3 — organising material information within the financial report; and
    • Step 4 — stepping back and reviewing the financial report as a whole.
  • Statement of Cash Flows. Topics discussed were the classification of cash flows (positively defining cash flows from operating activities, presenting cash outflows for acquiring property, plant and equipment as cash flows from operating activities, presentation of cash flows related to financing liabilities, cash received from customers and presentation of cash flows related to tax), cash equivalents and the management of liquid resources, reconciliation of operating activities, and direct or indirect method.
  • Primary Financial Statements. Members discussed the structure and content of the statement of profit or loss and OCI as regards line items and subtotals as well as alternative performance measures, the structure and content of the statement of financial position, and the interaction between items reported in different primary financial statements.
  • Financial instruments with characteristics of equity. Focus of the discussion were shares redeemable at fair value and cumulative preference shares.

The next CMAC meeting will be held on 3 November 2016 and the next GPF meeting will be held on 29 November 2016. The full meeting summary is available on the IASB's website.

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