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News

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Recordings from the September 2019 IFRS Advisory Council meeting

23 Sep 2019

Recordings have been released of the individual sessions of the meeting of the IFRS Advisory Council held in London on 18–19 September 2019.

The participants discussed:

  • Welcome and Chair's preview
  • Effect of technology on the investment process
  • Consistent adoption and application of IFRSs
  • Effective risk management
  • Update on Trustees and Foundation activities
  • Update on the Board’s activities
  • Digital experience for customers and stakeholders
  • 2020 Agenda Consultation — Proposed approach
  • Summing up of the meeting

The recordings from the meeting are available on the IASB website.

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Final changes to IBOR reform expected next week; EFRAG suggests positive draft endorsement advice

20 Sep 2019

The European Financial Reporting Advisory Group (EFRAG) has announced that it will issue a positive draft endorsement advice consultation once final changes have been published by the IASB related to IBOR reform. EFRAG has announced that date to be 26 September 2019.

EFRAG has published a press release with a corresponding announcement and a draft of the draft endorsement advice to allow for prompt comments by European target groups.

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Presentations for the World Standard-setters meeting in September available

20 Sep 2019

The presentations and a slightly updated programme have been released for the World Standard-setters meeting, which is being held in London on 30 September and 1 October 2019.

Participants will discuss:

Monday, 30 September 2019 (09:00 - 18:20)

  • Opening remarks
  • Welcome address
  • IASB technical programme update
  • Primary financial statements — Overview of the consultation and how it aligns with discussions at previous World Standard-setters conferences
  • Goodwill and impairment – Q&A on the project proposals
  • Breakout sessions
    • Project overview — Disclosure initiative
    • 2019 Comprehensive review of the IFRS for SMEs
    • Financial instruments — what next?
    • Hot topics: IFRS Interpretation Committee
    • Business combinations under common control
    • Electronic reporting — Why everyone should care about the IFRS Taxonomy
  • Breakout sessions
    • Project overview — Disclosure initiative
    • 2019 Comprehensive review of the IFRS for SMEs
    • Financial Instruments — what next?
    • Hot topics: IFRS Interpretation Committee
    • Business combinations under common control
    • Islamic finance

Tuesday, 1 October 2018 (09:00 - 13:00)

  • Working together
  • Q&A and breakout sessions
  • Rate-regulated activities — preview of forthcoming consultative document

The presentations for the WSS meeting are available on the IASB website.

The meeting will be immediately followed by a meeting of the International Forum of Accounting Standard Setters (IFASS).

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HM Treasury consults on amendments to the financial reporting manual (FReM)

19 Sep 2019

HM Treasury has issued a consultation proposing revisions to the government financial reporting manual (FReM) (2020-2021).

The Government Financial Reporting Manual (FReM) is the technical accounting guide to the preparation of financial statements. It complements guidance on the handling of public funds published separately by the relevant authorities in England and Wales (HM Treasury and the Welsh Government respectively), Scotland (the Scottish Government) and Northern Ireland (the Executive Committee of the Northern Ireland Assembly). The FReM is prepared following consultation with the Financial Reporting Advisory Board (FRAB) and is issued by the relevant authorities.

The revisions have been proposed in light of the Government financial reporting review and a thematic review of the Statement of Parliamentary Supply (SoPS). The proposals include a new four-part structure of the FReM as well as proposals for new and updated chapters.

The full consultation is available on the HM Treasury website.  Comments are requested until 25 October 2019.

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IFRS Interpretations Committee holds September 2019 meeting

18 Sep 2019

The IFRS Interpretations Committee met in London on 17 September 2019 to discuss nine issues, including three new interpretation requests. We have posted Deloitte observer notes for the technical issues discussed during this meeting.

New Issues

The discussed three new issues.

IFRS 15 Revenue from Contracts with Customers—Training costs to fulfil a contract (Agenda Paper 2). Should training costs that are incurred by a supplier, that are necessary to be able to deliver a service to a customer and that are recoverable from the customer, be recognised as a contract asset?

IFRS 16 Leases—Definition of a lease—Shipping contract (Agenda Paper 3). Does a particular type of shipping contract contain a lease? 

IAS 21 The Effects of Changes in Foreign Exchange Rates and IAS 29 Financial Reporting in Hyperinflationary Economies—Translation of a hyperinflationary foreign operation (Agenda Paper 4) How does an entity, with a non-hyperinflationary presentation currency, present the information required by IAS 21 and IAS 29 for its interest in a foreign operation which is hyperinflationary?

The Committee decided not develop any Interpretations or amendments but instead publish tentative agenda decisions. 

Agenda decisions to finalise

The Committee finalised six tentative agenda decisions.

IFRS 15 Revenue from Contracts with Customers—Compensation for delays or cancellations (Agenda Paper 5). Should an obligation to compensate customers for delayed or cancelled flights (as set out in legislation) be recognised as part of the transaction price or as an obligation in accordance with IAS 37?

IAS 41 Agriculture—Subsequent expenditure (Agenda Paper 6). Should an entity capitalise or expense the costs related to the biological transformation of biological assets?

IAS 7 Statement of Cash Flows—Changes in liabilities arising from financing activities (Agenda Paper 7). Some investors have expressed concerns about the quality and consistency of disclosures about changes in liabilities arising from financing activities required by IAS 7.

IFRS 16 Leases—Incremental borrowing rate (Agenda Paper 8). Does the incremental borrowing rate need to reflect the interest rate in a loan with both a similar maturity to the lease and a similar payment profile to the lease payments?

IFRS 9 Financial Instruments—Fair value hedge of foreign currency risk on non-financial assets (Agenda Paper 9). Can foreign currency risk be a separately identifiable and reliably measurable risk component of a non-financial asset held for consumption (for example, property, plant and equipment and inventory denominated in a foreign currency) that an entity can designate as the hedged item in a fair value hedge accounting relationship?

IAS 1 Presentation of Financial Statements—Presentation of liabilities or assets related to an uncertain tax position (Agenda Paper 10). Should an entity present a liability related to uncertain tax treatments as a current (or deferred) tax liability or as a provision?

Work in progress (Agenda Paper 11)

There are no new matters that have not yet been presented to the Committee. The staff will present the analysis of comments of the tentative agenda decision 'Lease Term and Useful Life of Leasehold Improvements (IFRS 16 Leases and IAS 16 Property, Plant and Equipment)' at a future meeting.

More information

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

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Pre-meeting summaries for the September IASB meeting

18 Sep 2019

The IASB will meet in London on 24–26 September 2019 to discuss 15 topics. 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.

Onerous Contracts: After considering the comment letters received, the staff recommend that the Board finalise its amendments to IAS 37, to clarify that it is the costs that relate directly to the contract which are included in determining the ‘cost of fulfilling’ a contract for the purpose of assessing whether the contract is onerous.

Classification of Liabilities as Current or Non-current (Amendments to IAS 1): The staff recommend that the Board prepare the final amendments to IAS 1, with an effective date of 1 January 2022.

Business Combinations under Common Control: The staff recommend that the forthcoming Discussion Paper propose that an acquiring entity be required to account for a business combination under common control by applying either a current value approach based on the acquisition method or a predecessor approach. The current value approach would be required for transactions affecting non-controlling shareholders of the acquirer, with two exceptions, and the predecessor approach would apply for all other transactions.

Rate-regulated Activities: The Board will discuss the regulatory agreement boundary, whether any additional amendments to other IFRS Standards are necessary and the proposed transition requirements. 

Management Commentary: The staff recommend that the revised Practice Statement discuss faithful representation using three qualities of information—completeness, neutrality and freedom from error.

Disclosure Initiative: The Board is using IFRS 13 as one of the Standards to test the draft guidance on developing and drafting disclosure objectives and requirements and will discuss how the disclosure requirements could be improved.

Primary Financial Statements: The staff are recommending that the ED propose replacing IAS 1 with a new IFRS, rather than amending it, with fewer illustrative examples than previously envisaged.

SME standard review and update: The discussions will focus on the scope of the IFRS for SMEs Standard, IAS 19, IAS 23, IFRS 11, accounting for cryptocurrencies and accounting for financial guarantee contracts of the IFRS for SMEs Standard.

Extractive Activities: The staff will provide an overview of how changes to IFRS Standards and other documents, and other developments since the DP was published may affect the issues and conclusions in the DP. There are no staff recommendations.

Financial Instruments with Characteristics of Equity: After considering the feedback on the Discussion Paper the staff recommend that the Board develop amendments to IAS 32 to address practice, clarifying the underlying principles in IAS 32.

The Board will be given updates on the 2020 Agenda Consultation (the approach being proposed to developing the Request for Information), the planned Post-implementation review of IFRS 10, 11 and 12, the second phase of the project on IBOR Reform and the Effects on Financial Reporting, Subsidiaries that are SMEs and the Research Programme.

More information

Our pre-meeting summaries are available on our September meeting notes page and will be supplemented with our popular meeting notes after the meeting.

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Agenda for the October 2019 IFASS meeting

18 Sep 2019

The International Forum of Accounting Standard Setters (IFASS) will meet in London on 1–2 October 2019. This will be the first meeting under the new IFASS Chair Mr Yasunobu Kawanishi, Board member of the Accounting Standards Board of Japan (ASBJ).

The full agenda for the meeting is summarised below.

Tuesday, 1 October 2019 (14:00–18:00)

  • Welcome and opening remarks
  • Extractive activities (panel discussion)
  • International financial reporting for non-profit organisations
  • IPSASB update
  • UK developments:
    • Replacement of the FRC by ARGA
    • Proposals for endorsing IFRSs for the UK post-Brexit

Wednesday, 2 October 2019 (08:30-16:45)

  • Government grant receivables and government grant income under IAS 40 (optional)
  • ESG and intangibles (roundtable discussion)
    • KASB research
    • IASB proposals related to ESG and intangibles in the project on management commentary
  • Connecting with stakeholders through use of technology (presentation and roundtable discussion)
  • Goodwill (roundtable discussion)
    • FASB invitation to comment on identifiable intangible assets and subsequent accounting for goodwill
    • Issues identified during KASB and ASBJ research
  • Application of IFRS 16 — Italian experiences
  • Call for volunteers to assist in academic research
  • Closing remarks
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New Charities SORP development process announced

17 Sep 2019

The Charities SORP-making body has announced a new process for developing the next Charities SORP.

The SORP-making body, which comprises the Charity Commission for England and Wales, the Office of the Scottish Charity Regulator and the Charity Commission for Northern Ireland, plans to engage with stakeholders earlier in the process of developing the SORP to ensure that any changes best meet user needs. As part of this focus on increased engagement, seven stakeholder groups will be convened as 'engagement partners', to include trustees, preparers, professional advisers, major donors, academics, government and public interest proxies. 

A new, smaller SORP committee will also be formed, comprising 12 members rather than the previous 16 and including a greater weighting of members from smaller charities. 

A summary of the process can be found on the Charity SORP website.

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IASB (International Accounting Standards Board) (blue) Image

IASB announces seventh research forum

17 Sep 2019

The International Accounting Standards Board (IASB) will host its seventh Research Forum on 2–3 November 2020 in Oxford.

The Forum will be held in conjunction with the journal Accounting and Business Research (ABR). The call for papers inviting submissions that can provide evidence to inform the standard-setting activities of the IASB notes the following areas of particular interest:

  • Performance measures, including alternative (management) performance measures
  • Wider financial reporting and management commentary
  • Better disclosure
  • Comparability of financial information
  • Intangibles
  • Goodwill and impairment
  • Equity accounting
  • Financial Instruments, especially effects analyses
  • Revenue from Contracts with Customers, especially effects analyses
  • Leases, especially effects analyses
  • Any other topics on the IASB research agenda or research pipeline

Please click for more information on the IASB website.

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September 2019 IASB meeting agenda posted

13 Sep 2019

The IASB has posted the agenda for its next meeting, which will be held at its offices in London on 24–26 September 2019. There are 15 topics on the agenda.

The Board will discuss the following:

  • Agenda consultation — Proposed approach to developing the request for information
  • Research programme — Research update
  • Implementation matters — Onerous contracts: Costs that relate directly to the contract
  • Classification of liabilities as current or non-current (amendments to IAS 1) — Completion of due process and permission to begin balloting process
  • Business combinations under common control — When to apply which measurement approach
  • Financial instruments with characteristics of equity — Project direction
  • IBOR reform and the effects on financial reporting (Phase 2) — Project plan and preliminary timing
  • Rate-regulated activities
  • Management commentary — Faithful representation
  • Disclosure initiative — IFRS 13 disclosure objectives
  • Primary financial statements
  • SME standard review and update
  • Subsidiaries that are SMEs — research results
  • Extractive activities
  • Post implementation review of IFRS 10–12 — Project update

The full agenda for the meeting can be found here. We will post any updates to the agenda, our comprehensive pre-meeting summaries as well as observer notes from the meeting on this page as they become available.

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