2010

FRC Image

Concerns about implementation of IFRS 8

05 Jan, 2010

The United Kingdom Financial Reporting Review Panel (FRRP) has issued a Statement FRRP Highlights the Challenge of Implementing New Segmental Reporting Requirements expressing concern about how companies are reporting the performance of key parts of their business in the light of the introduction of IFRS 8 Operating Segments.

IFRS 8 requires companies to provide an analysis of profit, assets, and liabilities so that investors can see the performance of the principal operations or 'segments'. The FRRP reviewed a sample of 2009 interim accounts and 2008 annual accounts and has asked a number of questions about the implementation of IFRS 8, in particular, where:
  • only one operating segment is reported, but the group appears to be diverse with different businesses or with significant operations in different countries;
  • the operating analysis set out in the narrative report differs from the operating segments in the financial statements;
  • the titles and responsibilities of the directors or executive management team imply an organisational structure which is not reflected in the operating segments; or
  • the commentary in the narrative report focuses on non-IFRS measures whereas the segmental disclosures are based on IFRS amounts.
In its statement, the Panel encourages Boards of Directors to test their initial conclusions about their segmental reporting by considering the following questions:
  1. What are the key operating decisions made in running the business?
  2. Who makes these key operating decisions?
  3. Who are the segment managers (as defined in the standard) and who do they report to?
  4. How are the group's activities reported in the information used by management to review performance and make resource allocation decisions between segments?
  5. Is any proposed aggregation of operating segments into one reportable segment supported by the aggregation criteria in the standard, including consistency with the core principle?
  6. Is the information about reportable segments based on IFRS measures or on an alternative basis?
  7. Have the reported segment amounts been reconciled to the IFRS aggregate amounts?
  8. Do the accounts describe the factors used to identify the reportable segments including the basis on which the company is organised?
Click for Statement FRRP Highlights the Challenge of Implementing New Segmental Reporting Requirements (PDF 36k).

 

IFRIC (International Financial Reporting Interpretations Committee) (blue) Image

Agenda for 7-8 January 2010 IFRIC meeting

05 Jan, 2010

The International Financial Reporting Interpretations Committee (IFRIC) will meet at the IASB's offices in London on Thursday and Friday 7 and 8 January 2010 (morning only on 8 January).

The meeting is open to the public and will be webcast. The tentative agenda is shown below.

Agenda for the IFRIC MeetingThursday and Friday, 7 and 8 January 2010

Thursday 7 January 2010 (10:00-18:15h)

  • Introduction
  • IAS 16 Property, Plant and Equipment – Accounting for production phase stripping costs in the mining industry
  • IFRS 2 Share-based Payment – Vesting and non-vesting conditions
  • Review of Tentative Agenda Decisions published in November 2009 IFRIC Update
    • IAS 38 Intangible Assets – Amortisation method
    • IFRS 2 Share-based Payment – Contingent manner of settlement
    • IAS 27 Consolidated and Separate Financial Statements – Presentation of comparatives when applying the 'pooling of interests' method
    • IAS 27 Consolidated and Separate Financial Statements – Combined Financial Statements and Redefined Reporting Entities
    • IAS 18 Revenue – Receipt of a dividend of treasury shares
    • IFRS 4 Insurance Contracts and IAS 32 Financial Instruments Presentation – Scope issue for investments in REITs
    • IAS 32 Financial Instruments: Presentation – 'Fixed for fixed' condition
  • Annual Improvements – Deliberation of Comments Received
    • IFRS 1 First-time Adoption of IFRSs – Revaluation basis as deemed cost
    • IAS 27 – Impairment of investments in subsidiaries, jointly controlled entities and associates in the separate financial statements of the investor
    • IFRS 3 Business Combinations – Measurement of non-controlling interests
    • IFRS 3 – Transition requirements for contingent consideration from a business combination that occurred before the effective date of the revised IFRS
    • IFRS 7 Financial Instruments: Disclosures – Disclosures about the nature and extent of risks arising from financial instruments
    • IAS 28 Investments in Associates – Partial use of fair value for measurement of associates
    • IAS 39 Financial Instruments: Recognition and Measurement – Bifurcation of embedded foreign currency derivative
    • IAS 39 – Application of the fair value option
    • IAS 34 Interim Financial Reporting – Significant events and transactions
Friday 8 January 2010 (09:00-12:30h)
  • Staff Recommendations for Tentative Agenda Decision
    • IFRS 8 Operating Segments and IAS 36 Impairment of Assets – Transition provisions for IFRS 8 amendment
    • IAS 21 The Effects of changes in Foreign Exchange Rates – Determination of functional currency of investment holding company
    • IAS 32 Financial Instruments: Presentation – Debt/equity classification of instruments with obligation to deliver cash at the discretion of shareholders
    • IFRS 1 First-time adoption of International Financial Reporting Standards – Accounting for costs included in self-constructed assets on transition
    • IAS 39 Financial Instruments Recognition and Measurement – Unit of account for forward contracts with volumetric optionality
  • Administrative Session – IFRIC work in progress

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