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EU referendum in the UK

24 Jun 2016

In the EU referendum in the UK yesterday, which saw a turnout of 71.8%, 51.9% of the voters made clear that they see the UK’s interests best-served by leaving the European Union.

Deloitte UK offers a website dedicated to the EU referendum and its result offering insight papers, perspectives and access to webinars on what this change can mean.

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IASB updates work plan

24 Jun 2016

Following its June 2016 meeting, the IASB has updated its work plan. As mentioned before, directly tracing the Board's progress on the individual projects has become impossible since the change of the work plan format in July 2015, unless the Board makes definite progress or has to make larger corrections. Of these, only a few can be identified since the previous work plan. The work plan also indicates that EDs on the definition of a business and on the remeasurement of previously held interests are to be expected next week.

Changes to the work plan include:

Major projects

  • No changes made to major projects.

Im­ple­men­ta­tion projects

In addition, the work plan makes clear that exposure drafts on the definition of a business and on the remeasurement of previously held interests are to be expected next week since the work plan still states that these will come out in June (which ends next week).

Finally, the IASB has updated the details of the primary financial statements research project indicating that initial research will focus on:

  • the structure and content of the statement(s) of financial performance;
  • the potential demand for changes to the statement of cash flows and the statement of financial position; and
  • the implications of digital reporting for the structure and content of the primary financial statements.

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

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IFRS Foundation updates its Due Process Handbook for IFRS Taxonomy

23 Jun 2016

The IFRS Foundation trustees have issued an updated Due Process Handbook which incorporates the due process for developing and maintaining the IFRS Taxonomy.

Specifically, the changes to the IFRS Taxonomy due process are:

  • “[T]he Board will review and approve IFRS Taxonomy content where it reflects new or amended IFRS Standards.”
  • “[A] newly established IFRS Taxonomy Review Panel of three-to-five Board members will review the IFRS Taxonomy common practice content.”
  • “[T]he drafting and approval of each Proposed IFRS Taxonomy Update will take place at the same time that the related IFRS Standard is finalized.”
  • “[T]he role of the IFRS Taxonomy Consultative Group will be formalised within the due process.”

The updated Due Process Handbook also incorporates an amendment approved by the DPOC to extend the interval between the Board’s Agenda Consultations from three-to-five years, a change proposed by the Board as part of its 2015 Agenda Consultation.

For more information, see the press release, feedback statement, and Due Process Handbook page on the IASB’s Web site.

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EFAA publishes report on implementation of the EU Accounting Directive

23 Jun 2016

The European Federation of Accountants and Auditors for SMEs (EFAA) has published a report on the implementation of the European Accounting Directive.

The Directive entered into force on 20 July 2013 and was required to be implemented into the law of EU member states by 20 July 2015. It was aimed at reducing unnecessary and disproportionate administrative costs on small companies by simplifying the preparation of financial statements and reducing the amount of information required by small companies in the notes to financial statements. The Directive contains a significant number of member state options so that implementation can differ between member states.

The EFAA report focuses on whether the implementation has resulted in the creation of a harmonised European accounting framework. It reflects the results of an EFAA survey of its members in eight EU member states.

The report identifies some areas in which the countries surveyed have implemented the Directive in a similar way, in particular through the creation of a reduced disclosure regime for micro-entities. However, the main findings of the report point to the notable differences between member states’ implementation of the Directive. The report also highlights the lessened transparency of financial information about SMEs that is now available to the public as a result of reduced disclosure following implementation of the Directive.

Please click here to access the full report The New Accounting Directive: A Harmonised European Accounting Framework? on the EFAA website.

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June 2016 IASB meeting notes posted

22 Jun 2016

The IASB met at its offices in London on 20 and 22 June 2016. We have posted the Deloitte observer notes from all of the sessions.

Please click through for direct access to the notes:

Monday, 20 June 2016

Wednesday, 22 June 2016

You can also access the preliminary and unofficial notes taken by Deloitte observers for the entire meeting.

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IASB member discusses principle-based accounting

21 Jun 2016

In an article published by Compliance Week, IASB member Gary Kabureck discusses keys to a successful principle-based approach.

Mr Kabureck focused on the following key aspects:

  • The importance of a robust conceptual framework.
  • An understanding that rules will not be able to cover all situations.
  • Use of reasonable judgement in the decision making process.
  • Comparability in the application in accounting rules and the benefit to primary users of financial statements.

For more information, see the article on the IASB’s Web site.

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IFRS Foundation trustees seeks IASB Board members

21 Jun 2016

The IFRS Foundation trustees are currently seeking nominations for two vacancies in the IASB’s Board. The Board is comprised of 14 members containing a mix of experience in standard-setting, financial reporting, and education.

The new members will initially serve a five-year term with the possibility of being renewed for another three years. Nom­i­na­tions for IASB board mem­ber­ship close on 8 July 2016. For more information, see the press release on the IASB’s Web site.

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IASB clarifies the classification and measurement of share-based payment transactions

20 Jun 2016

The International Accounting Standards Board (IASB) has published final amendments to IFRS 2 'Share-based Payment' that clarify the classification and measurement of share-based payment transactions. The amendments address several requests that the IASB and the IFRS Interpretations Committee received and that the IASB decided to deal with in one combined narrow-scope project.


The IASB and the IFRS Interpretations Committee received a number of requests related to IFRS 2 Share-based Payment. Respondents asked for clarification on:

  • the accounting for cash-settled share-based payment transactions that include a performance condition;
  • the classification of share-based payment transactions with net settlement features; and
  • the accounting for modifications of share-based payment transactions from cash-settled to equity-settled.

After debating the issues in earlier meetings, the IASB decided in April 2014 to address them together in one narrow-scope project, which has now been completed.


Classification and Measurement of Share-based Payment Transactions (Amendments to IFRS 2) contains the following clarifications and amendments:

Accounting for cash-settled share-based payment transactions that include a performance condition

Until now, IFRS 2 contained no guidance on how vesting conditions affect the fair value of liabilities for cash-settled share-based payments. IASB has now added guidance that introduces accounting requirements for cash-settled share-based payments that follows the same approach as used for equity-settled share-based payments.

Classification of share-based payment transactions with net settlement features

IASB has introduced an exception into IFRS 2 so that a share-based payment where the entity settles the share-based payment arrangement net is classified as equity-settled in its entirety provided the share-based payment would have been classified as equity-settled had it not included the net settlement feature.

Accounting for modifications of share-based payment transactions from cash-settled to equity-settled

Until now, IFRS 2 did not specifically address situations where a cash-settled share-based payment changes to an equity-settled share-based payment because of modifications of the terms and conditions. The IASB has intoduced the following clarifications:

  • On such modifications, the original liability recognised in respect of the cash-settled share-based payment is derecognised and the equity-settled share-based payment is recognised at the modification date fair value to the extent services have been rendered up to the modification date.
  • Any difference between the carrying amount of the liability as at the modification date and the amount recognised in equity at the same date would be recognised in profit and loss immediately.

Effective date and transition requirements

The amendments are effective for annual periods beginning on or after 1 January 2018. Earlier application is permitted. The amendments are to be applied prospectively. However, retrospective application if allowed if this is possible without the use of hindsight. If an entitity applies the amendments retrospectively, it imust do so for all of the amendments described above.

Additional information

Please click for:

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ANC joins debate on how cultural background and translation influence the interpretation of IFRSs

18 Jun 2016

As reported earlier, the Australian Accounting Standards Board (AASB) and the Korea Accounting Standards Board (KASB) are conducting a joint research project that explores how cultural background and translation affect the interpretation of the terms that are used in IFRS. The French Autorité des Normes Comptables (ANC) has now joined the debate and contributes some general thoughts on the translation process.

The AASB/KASB project uses the different terms of 'likelihood' that are used in IFRSs to trace the influences of cultural background and translation. The key findings arrived at so far are that translation aspects can influence accounting judgment and that the IASB should give considerable attention to how terms might be interpreted and translated in different jurisdictions when developing a standard.

In its Contribution of the ANC to the questions raised by KASB and AASB on their joint research project, the French standard-setter agrees with the findings and adds that the process of translation does not only refer to translation between languages but also to the understanding of expressions in different cultures that seemingly use the same language. The ANC also extends this comment to countries using IFRSs in English (for example if funds/processes for translation are not available or if it is thought easier to work with the pronouncements issued in the language they were set in) and notes that this would hold true even if IFRS were written in relatively simple English.

In a more general and philosophical observation at the end of its contribution, which cites a range from resources from Herodotus over Wilhelm von Humboldt to the UN Charter, the ANC turns to cultural identities that are determined not only by language but also by race, colour, sex, religion, political or other opinion, national or social origin, property, birth or other status and notes that not only do these aspects determine how a language is understood but also that individuals’ thoughts and thinking are in some ways structured by the language used.

The ANC expresses the firm belief that one of the key question IFRSs will have to face is how to deal with the intercultural differences in order to ensure IFRS are consistently applied worldwide and concludes:

In a context where the IASB and the IFRS Foundation are developing a single set of IFRS standards to be applied around the world, ANC considers that the main difficulty is to issue principles and standards homogeneously understood and implemented. To reach this objective, IASB should rely on a process acknowledging and taking into account the underlying requirements and limits of cultural identities. In our view and in practice, the bias resulting from cultural diversity between the IFRS Foundation constituent should anticipated and integrated [... and ...] be considered from inception and all levels such as: At research level, at staff level (when preparing agenda papers, exposure drafts and standards ), at Board ’s or IFRS IC’s meetings.

Please click to download the contribution from the ANC website.

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Pre-meeting summaries for the June IASB meeting

17 Jun 2016

The International Accounting Standards Board (IASB) will meet at its offices in London on 20 and 22 June 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 20 June the IASB will be joined by video by the FASB for a joint education session, their first joint meeting since September 2015. The focus of the sessions is their work on business combinations, following on from their respective post-implementation reviews of their converged standards. Both boards have projects focusing on the goodwill and intangible assets recognised in a business combination.

On Wednesday 22 June the IASB will discuss three topics. They will continue their consideration of comments on the Conceptual Framework exposure draft, focusing on profit or loss and other comprehensive income (OCI). They will also consider some matters that have emerged during the drafting of the new insurance contracts standard. Because they are being brought back after the staff were given permission to prepare the draft for review by the Board they are called sweep issues. And finally, they will consider a recommendation from the IFRS Interpretations Committee to make a minor amendment to IAS 12 Income Taxes.

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

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