July

SMEIG members reappointed by IFRS Foundation

25 Jul, 2012

Members of the SME Implementation Group (SMEIG) have been reappointed by the Trustees of the IFRS Foundation for an additional two-year term ending 30 June 2014.

The SMEIG first task as part of their second term will be to analyse the feedback from the Request for Information (part of the IASB's initial comprehensive review of the IFRS for SMEs) and to make recommendations to the IASB for possible enhancements to IFRS for SMEs.

Click to view IASB press release (link to IASB website).

IASB webcast on financial instruments projects

25 Jul, 2012

On 30 and 31 July 2012 IASB staff will give a web update on the Financial Instruments Projects including a question and answer session.

Details of the web updates are provided below:

Topic: Update on the Financial Instruments Projects
Date and time: Monday, 30 July 2012 15:00 GMT+1 and
Tuesday, 31 July 2012 09:00 GMT+1
More information: Click here

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Separation of the role of Chairman of the IASB and Chief Executive Officer of the IFRS Foundation reflected in new Constitution

25 Jul, 2012

The Trustees of the IFRS Foundation have published a drafting review of the IFRS Foundation Constitution. The document reflects changes to the Constitution regarding the separation of the role of Chairman of the IASB and Chief Executive Officer of the IFRS Foundation.

The changes are one of the results of the Monitoring Boards governance review 2010-2011. They have already been implemented by appointing Yael Almog as Executive Director of the IFRS Foundation earlier this year.

The Trustees have announced that further changes to the IFRS Foundation Constitution may be considered in the future, however, they felt that the reality of this change should be reflected in the Constitution as soon as possible.

Comments on the drafting review are requested by 23 October 2012.

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New report calls for integrated reporting in light of global financial crisis

24 Jul, 2012

A joint report by the United Nations Environment Programme Finance Initiative (UNEP-FI), the International Institute for Sustainable Development (IISD), and the Blended Capital Group explores lessons learned from the global financial crises, and outlines a number of recommendations, including a global integrated reporting standard.

The report, entitled Lenses and Clocks: Financial stability and systemic risks, provides an overview of the developments during the financial and economic crisis of 2007–2012 and the ongoing response to that crisis, and then highlights a number of areas related to the "re-engineering" of the global financial system, relating sustainable finance and investment thinking to these areas.

The report laments the focus on 'short-term' outcomes and analyses some of the initiatives and policy responses to issues identified from the global financial crisis.  In critiquing the global convergence of accounting standards, the report notes:

It appears... that international efforts to bring about convergence around one standard, the International Financial Reporting Standards, have faltered and the accounting community has to a large degree accepted that, at this stage, an integrated global accounting system is beyond its reach, with many of the key unresolved issues still on the table in 2012. Agreement over the valuation and pricing of banking assets, notably the complex financial products such as derivatives that sat at the heart of the initial sub-prime crisis in the United States, as well as loans and loan-like instruments, appear to be, once again, at the epicentre of the schism across the accounting world.

The recommendations of the report are outlined as a series of four 'propositions':

  • Proposition 1: Build a deeper understanding of how policy-makers, market regulators and international financing institutions can support the growth and main-streaming of responsible investment and inclusive finance approaches.
  • Proposition 2: Establish a monitoring body, which ensures that  global financial architecture is managed on sustainable fiduciary principles.
  • Proposition 3: Investigate why long-term pension investment has not resulted in a financial system that more obviously serves the interests of savers and supports global sustainability.
  • Proposition 4: Build on the work of the Integrated Reporting Committee and others to promote transparency in the operations of financial and commercial organisations.

The recommendations on proposition 4 include a call for a new protocol on integrated reporting which would cover at least all listed entities on the 50-plus major stock exchanges of the world:

The international community should agree to the adoption by stock exchange authorities and market regulators worldwide of a United Nations protocol that requires listed entities to abide by an integrated reporting standard covering sustainability issues promoting transparency in the operations of financial and commercial organizations. Such a protocol would build on the work of the International Integrated Reporting Committee and would embed a requirement to include a vote on the quality of the integrated report at the annual general meetings of listed corporations.

 

Click for access to the full report (link to the UNEP-FI website)

Final notes from the July IASB meeting

23 Jul, 2012

The IASB's July meeting was held in London on 16-20 July 2012, some of it a joint meeting with the FASB. We have posted Deloitte observer notes from the sessions on financial instruments: impairment and financial instruments: classification and measurement.

Click through for direct access to the notes:

Friday, 20 July 2012

You can also access the preliminary and unofficial notes taken by Deloitte observers for the entire meeting.

Further notes from the July IASB meeting

20 Jul, 2012

The IASB's July meeting was held in London on 16-20 July 2012, some of it a joint meeting with the FASB. We have posted Deloitte observer notes from the sessions on insurance contracts, investment entities and revenue recognition.

Click through for direct access to the notes:

Monday, 16 July 2012

Thursday, 19 July 2012

You can also access the preliminary and unofficial notes taken by Deloitte observers for the entire meeting.

IASB and FASB webcast on Leases

20 Jul, 2012

The International Accounting Standards Board (IASB) and Financial Accounting Standards Board (FASB) held a live webcast on 19 July 2012 to provide an update on proposals relating to the joint Leases project. This webcast is now available on the IASB's website.

During the webcast, the Boards' discussed the following:

  • why there is a need for a leases project
  • updates on proposed leases models
    • Right-of-use model
    • Lessee accounting model
    • Lessor accounting model
  • classification of leases, and
  • the current state of the leases project.

Click here to view the IASB-FASB webcast.

Further notes from the July IASB meeting

19 Jul, 2012

The IASB's July meeting was held in London on 16-20 July 2012, some of it a joint meeting with the FASB. We have posted Deloitte observer notes from the sessions on financial instruments: classification and measurements and financial instruments: impairment.

Click through for direct access to the notes:

Wednesday, 18 July 2012

You can also access the preliminary and unofficial notes taken by Deloitte observers for the entire meeting.

IASB begins public consultation phase of the IFRS 8 post-implementation review

19 Jul, 2012

The International Accounting Standards Board (IASB) has initiated the public consultation phase of IFRS 8 'Operating Segments' post-implementation review (PIR) process. As part of the public consultation phase, the IASB has published for comment a Request for Information (RFI) on the effect of implementing the standard.

The purpose of the review is to gather "feedback on whether the standard is functioning as intended, as well as more practical information on the challenges and costs associated with implementing the standard." In addition to the RFI, the IASB will be holding outreach activities internationally to gather more feedback on the effect of implementing IFRS 8.

The IFRS 8 standard marks the first instance the IASB has conducted a PIR of a major standard since PIR was introduced by the Trustees in 2007.

Comments on the RFI are due by 16 November 2012.

A live web presentation on the RFI will be available on 26 July 2012 by the IASB staff. Presentation details are available on the IASB website.

Click for (links to IASB website):

EFRAG draft comment letter on the proposed IFRS Foundation Due Process Handbook

19 Jul, 2012

The European Financial Reporting Advisory Group (EFRAG) has issued a draft comment letter on the proposed IFRS Foundation Due Process Handbook that was published for public comment in May 2012. EFRAG emphasises that the overarching principle of bringing improvement to financial reporting at an acceptable cost should be the sole driver for new or changed standards and interpretations.

In order to achieve this overarching aim, EFRAG formulates eight comments and recommendations for the standard setting process and two for the due process oversight.

Standard setting process:

  • EFRAG welcomes the introduction of a research programme into the IASB due process as this will allow for evidence based agenda setting. EFRAG also suggests concluding the research programme phase by a public consultation phase on the issue and the possible approaches before deciding to add a project to the agenda.
  • EFRAG promotes a shared due process between the IASB and regional and national accounting standards bodies as an effective way to improve transparency and efficiency.
  • EFRAG believes that the Due Process Handbook should contain guiding principles for identifying and analysing users’ needs to establish the link with the objective as defined in the IASB’s Conceptual Framework.
  • EFRAG believes that results of public fatal flaw reviews should be assessed, in a public meeting, by the IASB and only by the staff as they are essential in the identification of potential implementation difficulties or undue costs.
  • EFRAG warns that the IASB staff should support the IASB, never try to guide it. The staff should be allowed to make recommendations, but only after having prepared a fair and balanced representation of various views.
  • As EFRAG observes that no discussion arises at the IASB level when an interpretation is presented for approval, EFRAG recommends that IFRS Interpretations Committee members' dissenting views should be explained publicly.
  • EFRAG urges the Trustees to clearly stipulate that the IFRS Interpretations Committee should not issue any rejection notice that would be akin to an interpretation as some preparers and regulators operate in the expectation that rejection notices are part of the IFRS literature to which preparers should refer.
  • EFRAG believes that every decision made in the standard setting process should be subject to the super majority required for the whole standard.

Due process oversight:

  • EFRAG believes that the focus of the due process oversight should be on substance, and not on form to ensure that the objectives set for the IASB’s due process are indeed met.
  • EFRAG warns of adding too much detail into the Due Process Handbook as that would undermine the principles based character of the standard setting process and leave no room for any flexibility in the due process.

Comments on EFRAG's draft comment letter are invited by 5 September 2012.

Please click for:

  • EFRAG press release with link to the draft comment letter (link to EFRAG website)
  • A summary of the main suggestions of the updated IFRS Foundation Due Process Handbook in our earlier story on the publication of the Trustees' proposals.

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