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HMRC publishes paper on the tax implications of FRS 105

21 Jul 2017

HM Revenue and Customs has published a paper which provides an overview of the key accounting changes and the key tax considerations of moving from the Financial Reporting Standard for Smaller Entities (FRSSE) or ‘old’ UK GAAP to FRS 105 ‘The Financial Reporting Standard applicable to the Micro-entities Regime’.

The FRS 105 paper follows similar papers prepared by HMRC for companies transitioning from ‘old’ UK GAAP to either FRS 101 Reduced Disclosure Framework or FRS 102 The financial reporting standard applicable in the UK and the Republic of Ireland.  HMRC, in December 2016, also published an additional overview paper on key income tax considerations of moving from ‘old’ UK GAAP to FRS 102.

The paper is split into two sections:

  • The first section provides a comparison of the accounting and tax differences between ‘old’ UK GAAP, the FRSSE and FRS 105.
  • The second section provides a summary of the key accounting and tax considerations upon transition from ‘old UK GAAP’ or the FRSSE to FRS 105.

The papers include the requirements of the law as they stood at the date of the publication.  HMRC intend to update the papers “as further information is available and as new accounting standards and tax law develop”.

For accounting periods beginning on or after 1 January 2016 smaller and micro companies can no longer follow the FRSSE.  Such entities will either have to follow the recognition and measurement requirements of FRS 102 and the presentation and disclosure requirements within Section 1A Small Entities or apply FRS 105.

The FRS 105 overview paper is available on the HMRC website. 

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Updated IASB work plan — Analysis

21 Jul 2017

Following the IASB's July 2017 meeting, we have analysed the IASB work plan to see what changes have resulted from the meeting and other developments in the month of July. Changes are minor and the main message is that the IASB does currently not intend to issue any pronouncements until September 2017.

General remarks

The IASB continues to not date its work plans any longer, but has re-introduced the possibility of creating a PDF version of the work plan at any given time for personal use. To achieve this, use the "Print this tab" link near the top of the page and then choose creating a PDF.

Below is an analysis of all changes made to the work plan since our last analysis on 28 June 2017.

Standard-setting projects

  • No changes

Maintenance projects

Research projects

Other projects

  • No changes

The above is a faithful comparison of the IASB work plan at 28 June 2017 and at 21 July 2017. For access to the current IASB work plan at any time, please click here.

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IASB appoints new Executive Technical Director

21 Jul 2017

The International Accounting Standards Board (IASB) has appointed Nili Shah as Executive Technical Director. She follows Hugh Shields in the role of leading the IASB's technical staff and being responsible for the efficient delivery of all technical activities.

Ms Shah, who will take office in October 2017, is currently Deputy Chief Accountant of the Division of Corporation Finance of the US Securities and Exchange Commission (SEC). In that capacity she has supported the SEC staff’s discussions on IFRSss within the International Organization of Securities Commission’s (IOSCO) accounting technical committee.

Please click for more information in the press release on the IASB website.

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IFRS 17 webinar for investors

21 Jul 2017

The IASB has made available a recording of a webinar held jointly by the IFRS Foundation and the Canadian Accounting Standards Board on IFRS 17 in July 2017.

The webinar was tailored to investors and covered the following questions:

  • Why IFRS 17 was developed?
  • How does IFRS 17 work?
  • What are the benefits of IFRS 17?

There is also a section with answers to questions submitted by investors during the webinar.

Please click to access the webinar through the press release on the IASB website.

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July 2017 IASB meeting notes posted

20 Jul 2017

The IASB met at its offices in London on 18 and 19 July 2017. We have posted our comprehensive Deloitte observer notes for all projects discussed during the meeting.

On Tuesday, the meeting started with positive feedback on outreach the IASB staff have undertaken with investors and analysts in relation to the recently issued IFRS 17 Insurance Contracts. The Board decided to proceed towards finalisation of two of the proposed amendments included in the Annual Improvements to IFRS Standards 2015–2017 Cycle related to IAS 12 Income Taxes and IAS 23 Borrowing Costs. The Board asked the staff to undertake more research on a possible amendment to IFRIC 14 IAS 19—The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction.

The day finished with a session on Disclosure Initiative: Materiality Practice Statement. The Board decided to remove two paragraphs and an example relating to the impact of covenants on the materiality of other information.

On Wednesday, The Board decided to finalise the amendments the proposed amendment to IFRS 9 on prepayment features with negative compensation and, as part of that package, to highlight in the Basis for Conclusions the relevant accounting requirements for a modification of financial liabilities that does not result in derecognition. The amendments will have an effective date of 1 January 2019, rather than the originally proposed 1 January 2018, with earlier application permitted.

The remaining sessions were educational in nature. The Board continued its discussions on rate-regulated activities, focusing on control and matching; and recognition and uncertainty. It also discussed possible revisions to the assessment of goodwill impairment, mainly focusing on feedback from outreach. No decisions were made in these education sessions.

It was Stephen Cooper’s final Board meeting.

Please click to access the detailed notes taken by Deloitte observers for the entire meeting.

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FRC publishes annual report 2016/17

20 Jul 2017

The Financial Reporting Council (FRC) has published its 2016/17 annual report (“the annual report”).

The annual report outlines the FRC’s financial position, highlights achievements and challenges in 2016/17 and also identifies areas that it will focus on in 2017/18. The annual report also outlines the progress made in the FRC’s strategy for 2016-19.

In 2017/18 the FRC will aim for “further improvements in governance, reporting, auditing and actuarial work, which will contribute to increased trust and confidence in business”. 

Specifically the FRC’s priorities for 2017/18 include:

  • Driving further improvements in the quality of audit, including through a thematic review of audit firm culture
  • A comprehensive review of the UK Corporate Governance Code and promotion of its work on corporate culture. Also a review of the UK Stewardship Code.
  • Promotion of Clear and concise reporting by companies, including through a Financial Reporting Lab project on reporting of principal risks and viability statements.
  • Enhancing the speed and effectiveness of its enforcement role, including a review of its sanctions.

Click for (all links to FRC website):

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EFRAG TEG meeting July 2017

20 Jul 2017

The European Financial Reporting Advisory Group (EFRAG) will hold a TEG meeting on 26 and 27 July 2017 in Brussels.

An agenda and details on how to register for the meeting can be found on the EFRAG website.

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Illustrative tagging for IFRS 17

19 Jul 2017

The IFRS Foundation has published illustrative tagging for the proposed IFRS Taxonomy update regarding IFRS 17 'Insurance Contracts'.

The illustrative tagging shows how selected information from the Illustrative Examples accompanying IFRS 17 could be tagged using the IFRS Taxonomy Update that was proposed together with the issuance of IFRS 17 on 18 May 2017 and is currently expected to be published in the fourth quarter of 2017.

The illustrative tagging is available through the IASB's supporting material section of the Taxonomy Update project page.

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HLEG questionnaire on interim report

19 Jul 2017

In mid-July, the High-Level Expert Group (HLEG) on Sustainable Finance, established by the European Commission, published a first report setting out concrete steps to create a financial system that supports sustainable investments. The HLEG has now launched a questionnaire aimed at gathering targeted feedback on the analysis and reflections in the interim report and informing the preparation of the final report.

This questionnaire on the report is open from 18 July 2017 through 20 September 2017. It can be accessed here.

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ESMA sees room for improvement in the supervision of the enforcement of financial information

19 Jul 2017

The European Securities and Markets Authority (ESMA) has published the results of a review of the supervision of the enforcement of financial information (IFRS) according to the ESMA Guidelines on enforcement of financial information in the EU member states.

The report identifies that further improvements are needed in relation to:

  • how issuers are selected to examine their financial information;
  • the depth of inquiries into financial statements going beyond correcting disclosure; and
  • the financial and human resources allocated to the enforcement of financial information.

The report also notes that five of the jurisdictions – Malta, Portugal, Romania, Sweden, and UK – do not fully comply with the fifth of the final guidelines, which requires that use selection models in which all issuers are eligible to be selected for scrutiny.

Please click for additional information on the ESMA website:

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