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

FEE roundtable on public country-by-country reporting of tax information

18 Jul 2016

Since currently there are many European and international initiatives that propose public country-by-country reporting of tax relevant information for multinational companies, the Federation of European Accountants (Fédération des Experts-comptables Européens, FEE) offers a roundtable on that topic on 20 October 2016.

The location will be Brussels, the event will take place from 17:00 to 19:00. More information will be available at a later point of time. Please click for the announcement on the FEE website.

IFRS Foundation (blue) Image

New Chair of the IFRS Foundation Monitoring Board

14 Jul 2016

The IFRS Foundation Monitoring Board, responsible for the oversight of the IFRS Foundation, has announced that Masamichi Kono has stepped down as Chair of the Monitoring Board.

Ryozo Himino, Vice Minister for International Affairs of the Japan Financial  Services Agency (FSA), was appointed by the Monitoring Board to serve as Chair for the remainder of Mr. Kono’s term until February 2017.

Please click for the press release announcing this change on the IOSCO website. 

IFRS IC (IFRS Interpretations Committee) (blue) Image

July 2016 IFRS Interpretations Committee meeting notes posted

13 Jul 2016

The IFRS Interpretations Committee met in London on 12 July 2016. We've posted Deloitte observer notes for the technical issues discussed during this meeting.

IASB meeting (blue) Image

Pre-meeting summaries for the July IASB meeting

13 Jul 2016

The International Accounting Standards Board (IASB) will meet at its offices in London on 18 and 19 July 2016. We have posted our pre-meeting summaries for the meeting that allow you to follow the IASB’s decision making more closely. For each topic to be discussed we summarise the agenda papers made available by the IASB staff and point out the main issues to be discussed by the IASB and the staff recommendations.

On Monday 18 July the IASB is expected to finalise a narrow scope amendment that was developed for it by the IFRS Interpretations Committee on reclassifying property into, or out of, investment properties.  They are also expected to finalise the 2014-2016 annual improvements cycle and approve the expose draft for the 2015-2017 cycle. 

This will be followed by sessions at which the IASB will continue its consideration of comments on the Conceptual Framework exposure draft, focusing this month on the asset definition, recognition and measurement. 

On Tuesday 19 July the IASB will focus on its research project on financial instruments with the characteristics of equity, completing its discussions on the agenda consultation and, relatedly, an update on the research programme.

The IASB will not meet again in public until September.

Our pre-meet­ing summaries are available on our meeting note page and will sup­ple­ment them with our popular meeting notes after the meeting.

European Union Image

Hoogervorst, Watchman, Nooteboom heard in European Parliament on IFRS 9

13 Jul 2016

The monthly slot for scrutiny of delegated acts and implementing measures of the Committee on Economic and Monetary Affairs (ECON) of the European Parliament today focused on IFRS 9. Experts heard were IASB Chairman Hans Hoogervorst, EFRAG TEG Chairman Andrew Watchman, and Erik Nooteboom, Acting Director Investment and Company reporting, DG FISMA, European Commission.

Each of the experts made an opening statement.

Mr Hoogervorst noted the expected loss model as the key aspect of the new financial instruments standard. He stated that it allowed for a more timely and more continuous recognition of losses and thus avoided major disruptions at a later point of time. He voiced the belief that IFRS 9 will contribute to economic growth. Mr Hoogervorst also commented on the different effective dates of IFRS 9 and the new standard on insurance contracts. He notes that pure insurance companies can defer the application of IFRS 9 while conglomerates have the option of making adjustments to profit and loss. He stated that the IASB wanted to avoid having two standards applied in the same company as this would be too confusing to investors.

Mr Watchman confirmed the EFRAG endorsement advice regarding IFRS 9 noting that meeting the condition for endorsement was always a threshhold and would not necessarily mean that EFRAG agreed with all aspects of the standard. He also pointed at the fact that the endorsement advice included a qualitative impact assessment; for a quantitative impact assessment there were not enough data yet. Mr Watchman noted that the EFRAG endorsement advice was subject to the IASB solving the issue of the different effective dates of IFRS 9 and the new standard on insurance contracts but noted that the IASB was working on a solution that would include most (although not all) of the suggestions EFRAG made.

Mr Nooteboom stressed the major improvements that IFRS 9 would bring compared to IAS 39 and noted the positive ARC vote on 27 June. He also commented on the different effective dates of IFRS 9 and the new standard on insurance contracts and noted that the EU Commission is currently collecting data on the claim that bank insurers would be at a competitive disadvantage as a result of the deferral option not being available below group level. The Commission would come to a conclusion on this and if it found that the claims were true would act at EU level with a complimentary EU solution.

Questions from the ECON members were to a large part measured and solution focused. They especially asked after the claim that IFRS 9 would introduce more fair value measurement that for some is connected with a fear of stronger procyclicality, the effects on long-term investment, better impact assessments, and questions around the complexity of IFRS 9.

The experts replied that although the somewhat different classification in IFRS 9 in comparison to IAS 39 might lead to more assets measured at fair value it was not really a game changer and depended on the business model - some early adopters had actually reported less assets measured at fair value. On the aspect of long-term investment two points were noted: (1) even long-term investors might want to see real time truth and not just effects smoothed over and (2) IFRS 9 would not bring more volatility, rather, it would spread the volatility over time and avoid peaks of volatility as during the financial crisis. All parties agreed that quantitative impact analysis before an accounting standard has been implemented is impossible. However, they also stated that they all would watch the impacts of IFRS 9 adoption closely and (re)act if necessary. Finally, on complexity, the experts stated (1) complexity in the standard had actually reduced in some areas and the area where it was increased was very much worth it (impairment) and (2) complexity stemmed from the transactions dealt with and the economic reality, not from standard-setting itself. Mr Watchman cited Albert Einstein: "Make things as simple as possible, but not simpler."

A recording of the session is already available here on the European Parliament website (scrutiny slot begins at 11:29:00).

European Union Image

Two non-papers on European public good and true and fair view

13 Jul 2016

For the meeting of the European Commission's Accounting Regulatory Committee (ARC) on 27 June 2016, the Commission services prepared two non-papers that address the meaning of the European public good criterion and its relevance to the endorsement process the meaning of the true and fair view criterion and its relevance to the endorsement process.

The non-paper on the European public good criterion notes that neither the European legislation nor the case law of the Court of Justice provide a definition of this criterion in the context of the IAS Regulation. It therefore offers some flexibility in practice. The non-paper therefore concludes that assessing whether a standard meets the criterion of public good should in general take into account financial stability, EU economic development, competitiveness of European undertakings, and added value for the EU. However, the non-papers states that the above mentioned should not be considered, in any case, as exhaustive. In the context of the endorsement procedure of international accounting standards it should be decided on a case by case basis which of these particular elements EFRAG should focus on in its analysis when assessing the public good criterion and whether any other factors (e.g. long-term investment) should be considered.

The non-paper on the true and fair view criterion notes that European legislation does not provide a distinct definition of the principle of true and fair, but the Court of Justice has reviewed the principle in its case-law over the years. The Court refers to true and fair as “fundamental principle” and “primary objective” of the Accounting Directives. Therefore, the non-paper concludes that it is reasonable to assume that the true and fair view principle is the overarching principle. The supremacy of the principle means that in exceptional cases other general principles must be departed from in order to give the true and fair view of the assets and liabilities.

Please click to access the two papers on the European Commission website:

IASB (International Accounting Standards Board) (blue) Image

IASB issues 'Investor Update' newsletter

13 Jul 2016

The IASB has issued the tenth edition of its newsletter 'Investor Update', which provides investors with quick access to information about current accounting and financial reporting topics.

This issue features:

  • Views from Barbara Cohen, Head of European Credit Research at BNP Paribas Investment Partners,
  • Essentials and ‘Non-IFRS’ information,
  • Current projects that need input from the investment community, and
  • Information on investor materials and current events.

The Investor Update newsletter is available on the IASB’s website.

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

FEE proposal for public country-by-country reporting on disclosing tax information

12 Jul 2016

Since currently there are many European and international initiatives that propose public country-by-country reporting of tax relevant information for multinational companies, the Federation of European Accountants (Fédération des Experts-comptables Européens, FEE) has created a template that outlines the basic information for such companies to disclose when issuing a public country-by-country report.

The proposed template aims for companies to provide useful information required by stakeholders whilst minimising the costs of preparation and the risk of disclosing economically sensitive information.

Please click to access Public Country-by-Country Reporting: A template for disclosing corporate tax information on the FEE website.

IFRS Foundation (blue) Image

Former FSB adviser joins the IFRS Foundation as Director for Trustee Activities

11 Jul 2016

The IFRS Foundation has announced that Richard Thorpe, former Adviser on Accounting and Auditing at the Financial Stability Board (FSB), has been appointed Director for Trustee Activities at the IFRS Foundation.

Mr Thorpe replaces David Loweth, who will step down from his full-time position to take up a part-time role, as off 1 September 2016. He will support the Trustees in developing and executing their work programme and will report to Yael Almog, IFRS Foundation Executive Director.

Please click for the press release on the IASB website.

EFRAG (European Financial Reporting Advisory Group) (dk green) Image
KASB (Korean Accounting Standards Board) (lt blue) Image

First joint meeting of EFRAG and KASB

11 Jul 2016

Acknowledging the importance of co-operation by members of the international community applying IFRS, the European Financial Reporting Advisory Group (EFRAG) and the Korean Accounting Standards Board (KASB) held their first joint meeting on 5 July 2016 in Brussels.

The major topic of the technical discussion was the IASB’s Conceptual Framework project, especially in relation to measurement. Both parties supported further guidance being provided in this area.

EFRAG and the KASB plan to meet again in Korea in 2017.

Please click to access the joint press release on the meeting on the EFRAG website.

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