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We comment on three IFRIC tentative agenda decisions

22 Jul 2016

We have published our comment letters to the IFRS Interpretations Committee on tentative agenda decisions not to take onto the Committee’s agenda (1) service concession arrangements for which the infrastructure is leased (IFRIC 12), (2) fees and costs included in the '10 per cent' test for the purposes of derecognition (IAS 39), and (3) written puts over non-controlling interests to be settled by a variable number of the parent’s shares (IAS 32).

We agree with the IFRS Interpretations Committee's decision not to add a request for clarification of how an operator accounts for a service concession arrangement not including any construction or upgrade services for which the infrastructure is leased onto its agenda for the reasons set out in the tentative agenda decision. Please click to access the full comment letter.

We do agree with the IFRS Interpretations Committee's decision not to add the issue of which fees and costs should be included in the ‘10 per cent’ test for the purposes of derecognition of a financial liability onto its agenda, however, we believe a more significant clarification of the standard is warranted as well as, since there is currently significant diversity, explicit transition provisions. Please click to access the full comment letter.

We do not agree with the IFRS Interpretations Committee's decision not to add the request for guidance on written puts over non-controlling interests that will, or may, be settled by the exchange of a variable number of the parent’s own equity instruments onto its agenda because it will (1) promote structuring and increase diversity in practice over what is likely to be a significant period of time before the FICE project is completed and (2) general comments on NCI puts in the tentative agenda decision could give rise to ‘contamination’ and bring uncertainty and diversity into what is now a largely consistent practice around more traditional, cash-settled, NCI put arrangements. Please click to access the full comment letter.

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Video recordings from the EFRAG@15 event

22 Jul 2016

On 6 July 2016, the European Financial Reporting Advisory Group (EFRAG) held a celebration event and seminar to mark its 15th anniversary and welcome its new leadership.

We had already reported on the event and provided you with a summary of all speeches and discussions. EFRAG now follows suit and makes available on its website transcripts of the speeches and recordings of the two panel discussions.

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US SEC names interim chief accountant

22 Jul 2016

The US Securities and Exchange Commission (SEC) has named Wesley R. Bricker, deputy chief accountant since 2015, as interim chief accountant.

Mr Bricker will be responsible for the activities of the Office of the Chief Accountant as James V. Schnurr, current chief accountant, recovers from a serious accident. Mr Bricker will serve as the principal advisor to the Commission on accounting and auditing matters. He will also be responsible for the oversight of the Financial Accounting Standards Board (FASB) and the Public Company Accounting Oversight Board (PCAOB).

Please click for the announcement on the SEC website.

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ICAEW and IFRS Foundation announce IFRS 16 conference

21 Jul 2016

The IFRS Foundation, along with the Institute of Chartered Accountants in England and Wales (ICAEW), will be hosting an IFRS conference on the implementation of IFRS 16, "Leases," in London on 7 October 2016.

The conference will cover topics on:

  • Implementation issues.
  • IFRS 16 transition.
  • Definition of a lease.
  • Business implications.
  • Disclosure requirements.

More in­for­ma­tion on the con­fer­ence is available on the ICAEW website.

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IASB updates work plan

21 Jul 2016

Following its July 2016 meeting, the IASB has updated its work plan. The IASB has reorganised the way projects are presented, however, the main problem that progress on the individual projects cannot be traced properly anymore unless the Board makes definite progress or has to make larger corrections has not been rectified. In this news item, we explain the changed presentation and point out the few project changes that can be identified since the previous work plan.

The main change in the work plan presentation is that the Board’s active research projects and standard-setting projects are presented on one page, with research appearing before standard-setting. This was done to indicate that research projects typically lead on to standard-setting projects (if the research provides sufficient evidence that standard-setting is needed), to avoid implying that standard-setting projects are automatically more important or more urgent than research projects, and to avoid the confusion caused by some projects appearing on both the research and major projects pages.

The research projects now also include milestones for progress made and expected, however, they are of the same kind as the ones used for major projects so that slippage cannot be detected from one month to the next. Also, research projects are no longer classified as being in either the assessment or the development phase as the distinction was confusing to users. Projects that are in the “research pipeline” are no longer presented in the work plan at all.

The page dedicated to narrow scope amendments and IFRS maintenance now also includes IFRS Taxonomy activities and developments in the post-implementation reviews.

Changes to the projects itself include:

Research projects

Standard-setting and related projects (major projects)

Implementation projects (narrow scope amendments)

The revised IASB work plan is available on the IASB's website.

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Recent sustainability reporting developments

21 Jul 2016

A summary of recent developments at the Natural Capital Coalition, the SASB and GRI.

The Natural Capital Coalition has launched the Natural Capital Protocol, a standardised framework bringing together and building on a number of approaches that already exist to help business measure and value natural capital. The Natural Capital Protocol is freely available on the Natural Capital Coalition website.

The Sustainability Accounting Standards Board (SASB) has issued industry-by-industry engagement guidance for investors to assist asset owners and asset managers in using SASB standards and asking the right questions about material sustainability factors. Please click to download the guidance from the SASB website.

The Global Reporting Initiative (GRI) has announced that Chief Executive Michael Meehan will leave the organisation. Former Deloitte Partner Eric Hespenheide has been appointed Interim Chief Executive and stands down from his position as Chair of the Global Sustainability Standards Board (GSSB) in line with governance procedures. Please click for the press release on the GRI website.

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EFRAG issues feedback summary on recent leases outreach event

20 Jul 2016

The European Financial Reporting Advisory Group (EFRAG) has issued a summary of the feedback received on a joint leases outreach event co-hosted by the European Federation of Financial Analysts Societies (EFFAS), and the Association Belge des Analystes Financiers (ABAF/BVFA) on 5 July.

The outreach event provided investors an opportunity to learn about the main changes between IFRS 16 and IAS 17 as well as the differences between IFRS 16 and the US GAAP equivalent standard. In addition, participants provided their views on the leases standard, which included discussions on:

  • Advantages and disadvantages of IFRS 16 for financial statement users.
  • Population of contracts captured by the scope of IFRS 16.
  • IFRS 16 presentation requirements.
  • Non-GAAP measures.
  • Overall impact of IFRS 16.

For more in­for­ma­tion, see the feedback summary on the EFRAG’s website.

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ESMA calls for consistent application of IFRS 15

20 Jul 2016

The European Securities and Markets Authority (ESMA) has published a Public Statement aimed at promoting the consistent application of IFRS 15 'Revenue from Contracts with Customers' by European issuers listed on regulated markets.

In light of the expected impact and importance of the implementation of IFRS 15, ESMA highlights the need for consistent and high-quality implementation of IFRS 15 and the need for transparency on its impact to users of financial statements. The statements addresses the following topics:

  • Transparency on implementation and effects of IFRS 15;
  • Specific considerations;
  • Illustrative timeline and good practices of disclosures; and
  • Next steps.

Please click to download the IFRS 15 public statement from the ESMA website.

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EFRAG seeks TEG applicants

20 Jul 2016

The European Financial Reporting Advisory Group (EFRAG) is calling for candidates for its Technical Expert Group (TEG).

The present mandate period of six of the sixteen EFRAG TEG members expires on 31 March 2017 and the mandate of three country liaison members expires on 30 November 2016. All existing members are eligible for reappointment.

More information is available on the EFRAG website.

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Summary of the June 2016 ITCG meeting

20 Jul 2016

The IASB has published notes to the IFRS Taxonomy Consultative Group (ITCG) meeting held on 7 June 2016.

The ITCG discussed:

  • update on the Board’s work to improve communication of financial information, including the IFRS Taxonomy;
  • use of structured electronic reporting, including the IFRS Taxonomy;
  • IFRS Taxonomy implementation guidance;
  • IFRS Taxonomy content areas for review;
  • IFRS Taxonomy educational materials; and
  • ITCG member updates.

For more information, see the meeting notes on the IASB website.

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