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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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Study of the CFA Institute on the role of data and technology in transforming financial reporting

02 Sep 2016

The CFA Institute, a global association of investment professionals, has published 'Data and Technology: Transforming the Financial Information Landscape'. The study examines the current financial reporting process, assesses the inefficiencies in the system, and determines the ways that data, data analytics, and technology could potentially improve or even transform that process.

The study begins by pointing out that the current system presumes that information is consumed by humans, therefore machine-readable formats are often neglected or viewed as secondary. However, the study concludes that the use of data and technology can result in a more effective and efficient overall financial reporting process in which users at every level receive more transparent, better-quality information on a timely basis. The three levels the study identifies are companies, auditors and investors.

  • Companies. Using standardised data from very early on in the process (and not only at the regulatory filing stage) would enable companies to use applications that are able to pull information from different data sources to write automated reports, which will streamline current labor-intensive processes.
  • Auditors. Structuring data early in the process would also allow auditors to use audit data analytics to make the audit more efficient and potentially provide users with a better quality and greater granularity of financial information with greater reporting frequency and possibly a higher level of assurance.
  • Investors. Structured quantitative data not bounded by the document in which the information is contained would give investors the possibility to apply current technology to sift through data and analyse the numbers in a faster and more comprehensive manner.

However, the study also notes that to achieve these changes, regulators need to improve access to and searchability of information within the regulator’s primary source documents.

Please click to access the full study on the CFA Institute's website.

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FSB reports to G20 on financial regulatory reforms

01 Sep 2016

Ahead of the Group of Twenty (G20) meeting in China on 4-5 September 2016, the Financial Stability Board (FSB) has published a report on the 'Implementation and Effects of the G20 Financial Regulatory Reforms'. The report also briefly considers international accounting convergence, especially as regards expected loan loss provisioning.

It notes that convergence has not been achieved:

The international and US accounting standard setters have issued separate standards on expected loan loss provisioning (to come into force in 2018 and 2020 respectively), both of which are forward-looking and take account of the lessons of the crisis. These standards have not converged, and the FSB has asked the standard-setters to monitor their consistent implementation and to continue to seek opportunities for meeting the G20’s call for further accounting convergence.

Please click for the full report on the FSB website.

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Pre-meeting summaries for the September 2016 IFRS Interpretations Committee meeting

30 Aug 2016

The IFRS Interpretations Committee will meet at the IASB's offices in London on 6 and 7 September. We have now posted our popular pre-meeting summaries for the meeting that allow you to follow the Committee's decision making more closely.

The IFRS Interpretations Committee will discuss eight issues — finalising two agenda decisions, continuing its work on two Interpretations and two sets of amendments to IFRS, and considering two new items.

Agenda decisions

The staff are recommending that two agenda decisions be finalised:

  • IFRIC 12 Service Concession Arrangements - service concession arrangements in which the infrastructure is leased (agenda paper 7).; and
  • IFRS 9 Financial Instruments and IAS 39 Financial Instruments: Recognition and Measurement - fees and costs included in the 10 per cent test for derecognition of financial liabilities (agenda paper 9).


The Interpretations Committee issued a Draft Interpretation IAS 12 Income Taxes – Uncertainty over income tax treatments in October 2015. At this meeting the Committee will have an initial discussion of the comments received from the public consultation (agenda paper 2).

The Committee is being asked to approve the preparation of a draft interpretation of IFRS 9 Financial Instruments and IAS 28 Investments in Associates and Joint Ventures, addressing how those standards interact (agenda paper 4).


The Committee has been considering the comments received from the public exposure of proposed amendments to IAS 19 Employee Benefits and IFRIC 14 The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction. At this meeting the Committee will be asked to finalise its recommendations to the IASB on those amendments (agenda paper 3).

The Committee has also started to develop an amendment to IAS 16 Property, Plant and Equipment that would require any proceeds from selling items produced while testing PP&E being constructed to be recognised in profit or loss. The Committee will continue those discussions (agenda paper 5).

New items

The Committee will be considering two new items. In both cases the staff are recommending that matters not be taken onto its agenda:

  • IAS 12 Income Taxes – recognition of deferred taxes in asset acquisitions (agenda paper 6); and
  • IFRS 9 Financial Instruments - Modification or exchange of financial liabilities that do not result in derecognition (agenda paper 8).

Agenda consultation

The Interpretations Committee will be given an update of the conclusions of the agenda consultation.

The pre-meeting summaries for the meeting can be found here. We will update this page for our Deloitte observer notes from the meeting as they become available.

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