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2011

Notes from the December IASB meeting

14 Dec 2011

The IASB's regular monthly meeting is being held on 13-16 December 2011 in London, part of it a joint meeting with the FASB. We have posted Deloitte observer notes from most of the sessions held on the first day of the meeting.

Click through for direct access to the notes:

Tuesday, 13 December 2011

Notes from the session on Leases will be posted soon.

Click here to go to the preliminary and unofficial notes taken by Deloitte observers for the entire meeting.

IASB publishes an interview with Wayne Upton

14 Dec 2011

The IASB has posted on its website an interview with Wayne Upton, Chairman of the IFRS Interpretations Committee and the Director for International Affairs of the IASB.

Mr Upton has been with the IASB since 2001, and previously worked at the FASB for almost 20 years. In an interview with financial journalist Robert Bruce, who is also the resident commentator for IAS Plus, Mr Upton compares his United States and global roles, the challenges of global standard setting such as consistency in application across jurisdictions and the needs of emerging economies, and his plans as Chairman of the IFRS Interpretations Committee.

Click for access to the interview (link to IASB website).

EFRAG Update with summaries for the late November conference call and the December EFRAG TEG meeting

14 Dec 2011

The European Financial Reporting Advisory Group (EFRAG) has released the December 2011 issue of its EFRAG Update newsletter.

On 18 November 2011, EFRAG held a meeting via public conference call. The EFRAG TEG meeting was held 7 to 9 December 2011. Highlights of the meetings were a draft endorsement advice on the amendments of IFRS 1 and the draft comment letters to the IASB's draft on government loans.

Click for the EFRAG Update (PDF 347k, link to EFRAG website). Links to earlier issues are available here.

Deloitte comment letters on the IIRC's integrated reporting discussion paper and IASB's amendments to IFRS 1 exposure draft

14 Dec 2011

Deloitte's IFRS Global Office has submitted letters of comment to the International Integrated Reporting Council (IIRC) on its Discussion Paper, Towards Integrated Reporting — Communicating Value in the 21st Century, and to the International Accounting Standards Board (IASB) on its Exposure Draft ED 2011/5, Government Loans — Proposed amendments to IFRS 1.

In regards to the IIRC discussion paper, we acknowledge the purpose of the discussion paper is to create dialogue on the direction and framework for corporate reporting. We agree on improving the current corporate reporting model and that the principle of stewardship should encompass value creation and the costs incurred to create that value. We also provided what we feel are necessary steps in the process of developing a new (integrated) business reporting model. The following is an excerpt from the letter:

We think the following steps are necessary to further the IIRC’s goal: research into and development of a ‘conceptual framework’ for integrated reporting which not only identifies but defines the building blocks of integrated reporting with accompanying rationales. Relevant building blocks would include amongst others:

  • the objective of integrated reporting
  • the primary user group
  • the principle of stewardship of the capitals and resources used by the entity in the context of integrated reporting (which should be a Guiding Principle)
  • the elements of integrated reporting including an assessment of performance or relevant performance metrics in respect of those elements
  • the reporting entity
  • the defining characteristics or attributes of information for inclusion in an integrated report, which would consider relevance, materiality and quality, amongst others, and
  • the standards for disclosing the integrated report in a digital format (e.g., XBRL).

For the integrated reporting model to be successful and capable of practical and consistent application we believe a clear definition of and consensus on these fundamental concepts will be necessary.

In regards to the IASB exposure draft, we agree that first-time adopters should have the same transitional relief as existing preparers in applying the 2008 IAS 20 amendments. However, we suggest that draft paragraph B10 should be amended to make it clear that the proposed exemption applies only to the requirements of IFRS 9 and IAS 20 insofar as they relate to the grant element of government loans at below market rate.

Click for:

EPRA publishes Best Practices Recommendations on Sustainability Reporting

12 Dec 2011

The European Public Real Estate (EPRA) Association has today published the first edition of its Best Practices Recommendations on Sustainability Reporting for real estate companies. This guidance builds upon relevant mandatory reporting requirements and voluntary initiatives, in particular the Global Reporting Initiative’s Construction and Real Estate Sector Supplement.

The EPRA Sustainability BPR have been developed to prepare companies for the likely introduction of more stringent mandatory sustainability reporting regulations across Europe. 

The document sets out core recommendations for sustainability reporting which EPRA expects all of its members to report on, alongside additional recommendations which are based on observations of good practice.  The expectation is that companies should, as a minimum, include a summary table of EPRA Sustainability Performance Measures in their annual financial report, with a detailed report in their annual sustainability or corporate responsibility report.

The BPR sets out a number of performance measures, both in terms of absolute values and intensity measures.  The metrics set out cover the following key areas of sustainability:

  • Energy
  • Greenhouse Gas Emissions
  • Waste
  • Water

It also sets out some overarching recommendations which cover the following principles, which should apply to the reporting of EPRA Sustainability Performance Measures:

  • Organisational boundaries
  • Landlord and tenant consumption arrangements
  • Intensity normalisation
  • Year-on-year like-for-like comparison
  • Segmental analysis (by property type and geography)
  • Narrative on performance

To encourage knowledge sharing and reward best practice, EPRA will be introducing an annual Sustainability BPR Award in 2012 to recognise the efforts of those companies who adopt the BPR and innovate in their measurement and reporting of performance.

Click here for a copy of the BPR document (link to EPRA website).

The Bruce Column — Prada takes the Chair

12 Dec 2011

Robert Bruce, our resident, regular columnist, provides the background to the news that Michel Prada has been appointed Chairman of the Trustees of the IFRS Foundation.

Michel Prada has taken the helm as the new Chairman of the Trustees of the IFRS Foundation. To be the guiding hand at the top of the organisational pyramid which oversees the IASB and international standard setting is a complex role. But it is a role which has shown its worth in the past. Both Paul Volcker and Tommaso Padoa-Schioppa, have amongst others, added the necessary strength and intelligent sense of mission to the task in the past.

Now it is up to Prada to help steer the organisation forward in times which continue to be uncertain. There is still a decision due from the US regulatory body, the SEC, on whether IFRS can become the norm for major US corporates. Decisions have to be made following the consultations on the IASB’s future agenda. These are not quiet times. The whole organisation will be the better for more solidity at the centre.

And Prada has the skills. And he knows the landscape intimately. He is a onetime head of the executive and technical committees of IOSCO, the international stock exchange body. He was a founding member of the Financial Stability Board. He was a member of the Financial Crisis Advisory Group which produced rigorous work on the role of accounting standards in the financial crisis. He played a leading role in the idea of European adoption of IFRSs in 2005. He chairs the International Valuation Standards Council. And he chaired the main French regulatory body, first the COB, then the AMF, for twelve years.

As Prada put it himself a few years ago: ‘The task of the IASB will be complete only if, and when, IFRS will be accepted on every financial market without local additional requirements. I also recognize that the world will continue to change and that the existing accounting standards are not etched in stone forever. But setting accounting standards is not, let me say it again, an academic exercise. It should take into account the practical aspects and realities of this world’.

Robert Bruce
December 2011

Related links

  • Our article on the announcement of Michel Prada as Chairman of the Trustees of the IFRS Foundation.

Michel Prada appointed as Chairman to the Trustee of the IFRS Foundation

12 Dec 2011

The Trustees of the IFRS Foundation have announced the appointment of Michel Prada as Chairman of the Trustee of the IFRS Foundation.

Michel Prada is the former Chairman of the Executive and Technical Committees of the International Organization of Securities Commissions (IOSCO) and currently serves as the Chairman of the International Valuation Standards Council, co-Chairman of the Council on Global Financial Regulation and is a non-executive Director of the International Centre for Financial Regulation. His initial term begins 1 January 2012 and will expire in three years. Please click for IASB press release (link to IASB website) and our overview of Trustees working currently for the IFRS Foundation.

EFRAG calls for deferral of consolidation and joint arrangement standards

12 Dec 2011

The European Financial Reporting Advisory Group (EFRAG) has publicly released a letter it is has written to the IASB calling for the deferral of the effective date of the 'suite of standards' on consolidation, joint ventures and disclosures.

In the letter, EFRAG requests a deferral of the effective date of IFRS 10 Consolidated Financial Statements, IFRS 11 Joint Arrangements, IFRS 12 Disclosure of Interests in Other Entities, IAS 27 Separate Financial Statements and IAS 28 Investments in Associates and Joint Ventures.

EFRAG's reasons for requesting a deferral include:

  • during EFRAG field-tests of IFRS 10 and IFRS 11, some participants noted that they have concerns that the mandatory effective date of 1 January 2013 would not allow them sufficient time to implement the new requirements and make the required assessments. Concerns about implementing IFRS 10 are concentrated in the financial services and insurance industries, whereas concerns about IFRS 11 relate to the need to access detailed information regarding joint arrangements
  • the IASB is currently undertaking its project on investment entities and is also considering possible amendments to the transitional requirements around IFRS 10 (including at the December IASB meeting this week), both projects affect the application of IFRS 10 and create uncertainty for constituents
  • although the above concerns relate to IFRS 10 and IFRS 11, EFRAG notes that given the considerable interaction between the requirements of the standards in the package, all standards must continue to have the same effective date, requiring a deferral for all five standards.

The standards are currently effective for annual periods beginning on or after 1 January 2013.  EFRAG believes that the effective date of the Standards should be deferred to the later of (a) 1 January 2014 or (b) 12 months after the amendments to IFRS 10 and the standard on investment entities have both been published.

Click for access to the EFRAG letter (link to EFRAG website).

IASB announces public roundtable meetings on its agenda consultation

09 Dec 2011

The IASB plans to hold a series of public roundtable meetings for its Request for Views Agenda Consultation 2011.

You can access the meeting details on our upcoming events page.

Updated EFRAG 'endorsement status report'

08 Dec 2011

The European Financial Reporting Advisory Group (EFRAG) has updated its report showing the status of endorsement, under the EU Accounting Regulation, of each IFRS, including standards, interpretations, and amendments.

Click to view the Endorsement Status Report as of 8 December 2011. Currently, the following twelve IASB pronouncements await endorsement action:

  • IFRS 9 Financial Instruments
  • IFRS 10 Consolidated Financial Statements
  • IFRS 11 Joint Arrangements
  • IFRS 12 Disclosures of Interests in Other Entities
  • IFRS 13 Fair Value Measurement
  • IAS 27 Separate Financial Statements (2011)
  • IAS 28 Investments in Associates and Joint Ventures (2011)
  • Amendments to IAS 12 Deferred tax: Recovery of Underlying Assets
  • Amendments to IFRS 1 Severe Hyperinflation and Removal of Fixed Dates for First-Time Adopters
  • Amendments to IAS 1 Presentation of Items of Other Comprehensive Income
  • Amendments to IAS 19 Employee Benefits
  • IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine

 

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