Responses released on July 1, 2016 include thoughts on the following question:

In areas of accountancy, what new policies will follow? Will [the UK] be inclined or persuaded to depart from International Financial Reporting Standards (IFRS) and re-establish UK Generally Accepted Accounting Practice (UK GAAP)?

The ICAS staff argue that if the UK intends to remain a global player, "then one would expect that it would need to require listed entities to comply with global standards in the area of financial reporting". They state:

IFRS is now seen as the global benchmark in terms of financial reporting standards and therefore their use, or the use of standards substantively based on the IFRS framework (adopted standards), would appear to be the primary option.

However, the ICAS staff points out that following its exit, the UK would have the ability to sadopt IFRS standards as issued by the IASB without them firstly having to be adopted by the EU. They also explain that the UK could establish its own adoption mechanism, possibly via the Financial Reporting Council (FRC).

Please click for the following information on the ICAS' Web site:

• List of 20 questions
• Answers on business and trade
• Answers on bridging the policy gap
• Answers on taxation and accounting

Mr Hoogervorst said:

Valuable information gets drowned out by ‘tick the box’ disclosures and voluminous, but poorly organized and presented, financial data. For the investor, it is often difficult to see the woods through the multitude of information trees. We will take a fresh look at how financial information is presented, how it is grouped together, and in what form it is made available.

"Better Communication" will bring together a number of work streams, including:

• Primary Financial Statements—improving the organisation and structure of the ‘face of financial statements’ (statements of financial position, financial performance and cash flows);
• Disclosure Initiative—improving the quality and usefulness of financial disclosures through amendments;
• Financial Instruments with the Characteristics of Equity (FICE)—clarifying the definition, presentation and disclosure requirements for such instruments;
• Digital reporting—further developing the IFRS Taxonomy to ensure it meets electronic reporting needs and remains fit for purpose; and
• Non-financial reporting—assessing strategic challenges and exploring any potential future role that the Board may play in this area.

"Better Communication" as a theme for the Board's work responds to much of the feedback received through the 2015 Agenda Consultation, and should deliver material improvements to users’ ability to make economic decisions from financial information.

Mr Hoogervorst also announced that the Board will be playing a more active role in supporting jurisdictions in the implementation of new and existing IFRS Standards.

Read the full speech on the IASB's Web site.

In the webcast, the IASB staff discuss:

• measurement of lease liabilities
  • lease term
  • variable lease payments
  • in-substance fixed lease payments
  • discount rate
• measurement of right-of-use assets

The new webcast and all previous webcasts of the series are available on the IFRS 16 implementation page on the IASB’s website.

The proposed amendments provide:

• clearer application guidance to help distinguish between a business and a group of assets when applying IFRS 3; and
• clarification on how a company should account for previously held interest in a business, if acquiring control, or joint control, of that business.

The proposed amended application guidance on the definition of a business in IFRS 3 arises from the Board’s Post-implementation Review (PIR) process, which is conducted on each Standard and major amendment approximately two years after their effective dates. The IFRS 3 PIR shows general support for the accounting requirements in the Standard but identifies some areas where further research will be undertaken.

The proposed amendment to accounting for previously held interests was developed through the IFRS Interpretations Committee.

Further information about the Exposure Draft—Definition of a Business and Accounting for Previously Held Interests (Proposed Amendments to IFRS 3 and IFRS 11)—can be accessed on the IASB's Web site. The deadline for comments is October 31, 2016.

Additional information

Please click for:

• IASB press release (link to IASB website)
• Access to the exposure draft on the IASB website
• Our project page on IFRS 3 — Definition of a business
• Our project page on IFRS 3/IFRS 11 — Remeasurement of previously held interests

This issue of Investor Perspective features:

• An examination of capitalization tables;
• A closer look at the IASB's projects on Conceptual Framework and financial instruments with characteristics of equity;
• A solicitation for ideas on "more efficient and effective way for investors and lenders to obtain a comprehensive picture of the rights and obligations created by a company’s liability and equity claims"; and
• Recent resources related to disclosure effectiveness.

For more information, see the June 2016 edition of the Investor Perspectives newsletter on the IASB’s website.

Over the coming months and years, there will be significant changes to the political landscape. In the short term, the government is likely to set up a cross-departmental task force in order to negotiate Britain’s exit from the EU.

To counteract the immediate negative shock to the economy, it is likely that a number of policy measures will be announced. The government could introduce some pro-business measures in an emergency budget, ease fiscal deficit cuts and temporarily suspend its fiscal rules and the Bank of England’s inflation target.

The medium-term impact on the economy is harder to assess and will depend largely on the pace and success of the government’s negotiations with the EU and on future access to the single market.

In the longer term, economic activity will be determined by a combination of the nature of the UK’s post-exit trade relationship with the EU and its ability to exploit its newfound freedom to forge individual trade deals with emerging markets outside the EU.

Review our Initial Response to the EU Referendum released by our UK firm: Explore the effects of Brexit on business and the economy.

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.

Changes to the work plan include:

Major projects

• No changes made to major projects.

Im­ple­men­ta­tion projects

• Annual Improvements (2015-2017): A decision on the direction of the project is now expected within 3 months.
• Remeasurement at a Plan Amendment, Curtailment or Settlement / Availability of a Refund of a Surplus from a Defined Benefit Plan: A decision on the direction of the project is now expected within 3 months.
• Draft IFRIC Interpretation — Uncertainty over Income Tax Treatment: A decision on the direction of the project is now expected within 3 months.
• Draft IFRIC In­ter­pre­ta­tion — Foreign Currency Trans­ac­tions and Advance Con­sid­er­a­tion: A final interpretation is now expected within 6 months.

In addition, the work plan indicates that the exposure drafts on the definition of a business and on the remeasurement of previously held interests are expected to be released next week.

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

Visit the CFO’s corner in Deloitte’s Centre for Financial Reporting to read this editorial as well as any previous articles that you may have missed.

The guideline also incorporates a number of OSFI’s existing accounting and disclosure guidelines related to financial instruments.

Review the press release and Guideline on the OSFI's Web site.

The debate over which accounting standards philosophy is better—principles or rules—has persisted for decades with no end in sight. It’s a healthy debate. Principles written at too high a level result in issues with comparability and other challenges but excessive rules result in unnecessary complexity and invite structuring.

Having spent 40 years in this space as a US auditor and preparer and for several years as an IASB member, I have the benefit of seeing this issue from several perspectives, and I have no doubt that a principle-based approach to establishing accounting standards is, without question, the better way to go.

However a principle-based approach is only successful when several pre-conditions are present—some technical, some mindset—which is the focus of this article.

Read the editorial on the IASB's Web site.