May

ESMA Chairman Steven Maijoor urges US to decide on IFRS adoption soon

11 May, 2012

In a keynote speech delivered to the 35th Annual Congress of the European Accounting Association in Ljubljana on 9 May, Steven Maijoor, chairman of the European Securities and Markets Authority (ESMA) urged his counterparts at the US Securities and Exchange Commission (SEC) to send a clear message about the adoption of IFRS in the US soon.

Mr Maijoor began his speech describing his understanding of ESMA's role and the key objectives he sees for ESMA in the context of the broader regulatory reform of financial markets across the main regions of the world. He touched upon the proposals for reforming audit in the EU, the combination of audit and consulting, and the strengthening supervision. He also pointed out ESMA's own standard setting activities and its interaction with the IASB.

Moving then on to the topic of financial reporting, Mr Maijoor spoke about two issues in-depth: International Public Accounting Standards (IPSAS) and IFRS as global accounting standards.

He countered the possible surprise at a financial market regulator addressing the issue of public sector accounting by pointing out the fact that due to the current crisis governments have become important and active capital markets participants and the difference between corporate debt and sovereign debt has become more and more obsolete. Mr Maijoor strongly supported a current consultation of stakeholders on the suitability of introducing IPSAS for EU Member States: "There is currently a wide gap in the transparency obligations for sovereign debt issuers compared with corporate debt issuers. [...] We all know that a high level of transparency is needed for effective market discipline and good governance, and good governance is now especially needed in the Euro-zone."

On the topic of global accounting standards, he expressed respect regarding the on-going debates in the US on the implications of IFRS adoption and listed the goals that have already been achieved. However, he also pointed out that the G20 are getting impatient and are increasing the pressure on the IASB and FASB to achieve a single set of high quality, global accounting standards while the US still seemed to hesitate to come to a conclusion. "However, the absence of a clear US SEC position, and even more regrettably, the lack of clarity on the timetable for their decision have not been to the advantage of the IASB." Mr Maijoor concluded his speech on a hopeful note: "I know that my American counterparts at the SEC believe in international co-operation, and I hope they will send a positive message to the market soon by having the courage to adopt IFRS."

Please click for the full text of Mr Maijoor's speech on the ESMA website.

Summary of the April 2012 Trustees’ meeting

10 May, 2012

The IASB has posted to its website a summary of meeting of the Trustees of the IFRS Foundation that took place in London on 13 April 2012.

The Trustees of the IFRS Foundation, the body responsible for the governance and oversight of the International Accounting Standards Board (IASB), discussed the following topics:

  • Trustees’ Strategy Review and the efforts to co-ordinate the report of the Trustees’ Strategy Review with that of the Monitoring Board
  • Regional outreach activities and meetings with key UK and European stakeholders to discuss IFRSs, their application and other matters of significance
  • Report of the Nominating Committee concerning the appointments of the Trustees Ronald Arculli, C. B. Bhave and James Quigley and the appointment of Chungwoo Suh as a member of the IASB
  • Update on the opening of the Asia-Oceania office in Tokyo, which is scheduled for October 2012
  • Trustee meetings for 2013
  • Report of the Chairman of the IASB concerning the major convergence projects and the agenda consultation
  • Report of the Due Process Oversight Committee regarding the development of the Due Process Handbook, the review of the effectiveness of the IFRS Interpretations Committee and the post implementation reviews
  • Report of the Education & Content Services Committee

Please click for the full summary on the IASB's website. The next meeting of the Trustees of the IFRS Foundation is scheduled for 12 July 2012.

Trustees issue proposed IFRS Due Process Handbook update

08 May, 2012

The Trustees of the IFRS Foundation have issued an updated IFRS Foundation Due Process Handbook for public comment.

The updated Handbook includes due process enhancements recommended by the recent Monitoring Board Governance Review and Trustees' Strategy Review. It also includes recommendations from the Trustees' Review of the Efficiency and Effectiveness of the IFRS Interpretations Committee (IFRIC).

The proposals are aimed to:

  • consolidate due process requirements of the IASB and IFRIC to a single document
  • provide an in-depth discussion of the process of evaluating the effects of an IFRS
  • describe a more detailed process when developing post-implementation reviews
  • allow the Monitoring Board to refer issues of consideration by the IASB
  • include consideration to the due process requirements during outreach activities conducted by the IASB
  • integrate other enhancements resulting from conversations with the Trustees' Due Process Oversight Committee.

The updated Handbook is a significant rewrite of existing requirements, introducing many new policy level objectives and formalising current practice.

Comments on Invitation to Comment IASB and IFRS Interpretations Committee Due Process Handbook are due by 5 September 2012.

 

Summary of significant changes
  • The handbook no longer refers to the liaison roles that the IASB had with individual standard-setters when it was first set up. The section is now broader and anticipates the likely steps that the IASB will take to develop a more formal network of standard-setters and others
  • The handbook includes a more extensive discussion of the process of assessing the likely effects of an IFRS. More importantly, the handbook reflects the fact that the IASB has begun the process of embedding this assessment throughout the development of an IFRS rather than simply having an assessment document at the end of the process
  • The handbook now describes the three-yearly consultation on the IASB technical work programme and clarifies that the focus of the review is strategic and is not designed to add individual projects to the IASB’s technical work programme
  • A research programme is described and is expected to become the development base from which potential standards-level projects will be identified. The use of a Discussion Paper as the first external due process document has been moved into this research programme phase and would precede a proposal to add a standards-level project to the IASB technical work programme.
  • A new section has also been added that describes the oversight of the Conceptual Framework as a standing activity of the IASB
  • A new section on maintenance has been added, which formalises the practice that the IASB and the Interpretations Committee have been following for addressing matters that are narrow in scope
  • Two changes to comment periods are proposed: (1) to increase the minimum comment period for exposing the draft of a rejection notice for an Interpretation from 30 days to 60 days (2) allow the IASB to have a reduced comment period for documents it plans to re-expose (minimum comment period of 60 days)
  • The sections explaining post-implementation reviews have been expanded and now describe in more detail how the IASB expects to develop each review

 

Click for (links to IASB website):

IFAC responds to Monitoring Group consultation

08 May, 2012

The International Federation of Accountants (IFAC) has publicly released its response to the Monitoring Group public consultation on the governance of the Monitoring Group, the Public Interest Oversight Board (PIOB), and the standard-setting boards and compliance advisory panel operating under the auspices of IFAC.

The Monitoring Group (MG) and the PIOB released their consultation papers in March 2012.  The closing date for submissions is 28 June 2012.

Some of the key points noted in the IFAC submission include:

  • IFAC strongly supports the notion of private sector/public sector shared arrangements for international standard setting and believes there are risks associated with any change to a set of arrangements that has no private sector input
  • IFAC does not consider that the development of auditing and assurance, ethical, and education standards is done “for the accountancy profession” (as asserted in the MG consultation document), rather IFAC believes that standards are developed with a broad group of stakeholders and interested parties in mind, in a manner consistent with current arrangements which were agreed between IFAC and the international regulatory community
  • IFAC considers it critical to ensure that the legitimacy and acceptance of IPSASs is further enhanced through the existence of public oversight. As such, IFAC strongly supports, and encourages, public oversight of the IPSASB through bringing it under the purview of the PIOB.

More information is available on the IFAC website.

Agenda for May 2012 IFRS Interpretations Committee meeting

07 May, 2012

The IFRS Interpretations Committee will meet at the IASB's offices in London on Tuesday and Wednesday 15 and 16 May 2012. The meeting is open to the public and will be webcast.

The tentative agenda is available on our meeting page for the meeting.

AAOIFI publishes work plan for Islamic accounting and governance standards

04 May, 2012

The Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) has published an overview of the current status of its work on accounting and governance standards.

In a response to media reports about its activities (link to AAOIFI website) the AAOIFI has provided the following current status and expected dates:

 

TopicConsultation NoteExposure Draft(s)Final Standard(s)
Review of accounting standard on Investments in Real Estate released in January 2012 expected second half of 2012
Review of accounting standards on Investment Accounts released in January 2012 expected second half of 2012 expected first half of 2013
Review of accounting standards on Takaful expected second half of 2012 from first half of 2013 from second half of 2013
Development of new Governance Standard for Shari’a Supervisory Board expected second half of 2012 expected first half of 2013 expected second half of 2013

More information on developments in Islamic accounting is available on our dedicated IAS Plus resource page.

IASB publishes proposals for amendments under its annual improvements project

03 May, 2012

The International Accounting Standards Board (IASB) has published to its website an exposure draft (ED) of proposed amendments to eleven International Financial Reporting Standards (IFRSs) under its annual improvements project.

The IASB uses the annual improvements project to make necessary, but non-urgent, amendments to IFRSs that will not be included as part of another major project.

The ED proposes the following amendments:

IFRS Subject of amendment
IFRS 2 Share-based Payment To clarify the definition of 'vesting conditions'
IFRS 3 Business Combinations
(Consequential amendments proposed to IFRS 9)
Accounting for contingent consideration in a business combination
IFRS 8 Operating Segments

Aggregation of operating segments

Reconciliation of the total of the reportable segments' assets to the entity's assets

IFRS 13 Fair Value Measurement
Short-term receivables and payables
IAS 1 Presentation of Financial Statements Current/non-current classification of liabilities
IAS 7 Statement of Cash Flows Interest paid that is capitalised
IAS 12 Income Taxes Recognition of deferred tax assets for unrealised losses
IAS 16 Property, Plan and Equipment and IAS 38 Intangible Assets Revaluation method—proportionate restatement of accumulated depreciation
IAS 24 Related Party Disclosures Key management personnel
IAS 36 Impairment of Assets Harmonisation of disclosures for value in use and fair value less costs of disposal

The ED proposes that all of the amendments will be effective for annual periods beginning on or after 1 January 2014, except for amendments to IFRS 3 and the proposed consequential amendments to IFRS 9, which will be effective for annual periods beginning on or after 1 January 2015. Entities are permitted to early adopt all the proposed amendments. Click for IASB Press Release (link to IASB website).

You can access the ED via the the 'Comment on a proposal' page on the IASB's website. The IASB requests comments on the ED by 5 September 2012.

IFRS Trustees complete their review of the IFRS Interpretations Committee

02 May, 2012

The Trustees of the IFRS Foundation have published the conclusions from their review of the IFRS Interpretations Committee.

The Trustees began the review in October 2010 by publishing a questionnaire designed to help the Trustees assess the effectiveness of the Interpretations Committee. The review was also intended to help alleviate concerns that the Interpretations Committee rejected too many requests for assistance and did not communicate clearly enough why certain issues were either rejected or taken onto the agenda. In that connection the agenda criteria of the Interpretations Committee were also reviewed.

The following conclusions from the review were published today:

  • The Interpretations Committee should be provided with a greater set of 'tools' for responding to issues brought to their attention including also the provision of non-mandatory guidance.
  • The agenda criteria of the Interpretations Committee should be revised and consistently applied to all requests. Proposed criteria are 'Prevalence and significance', 'Diversity in practice', 'Feasibility and efficiency', and 'Timeliness'.
  • The rejection notices should be improved by offering helpful guidance in cases where the Interpretations Committee has reached a view, by being capable of being read without reference to other documents and by being exposed for comment for 60 days.
  • The Interpretations Committee should make greater use of outreach and communicate better with the stakeholders when assessing whether to add an issue to their agenda.

The Trustees hope that the recommendations will enable the Interpretations Committee to deal with a wider range of requests and will result in fewer instances of items being rejected from the agenda in future.

Please click for the Trustees' press release and the full report (both links to the IASB's website).

IFRS Foundation translations update

01 May, 2012

The IFRS Foundation has announced the publication of the following translations:

  • Hebrew translation of IFRS for SMEs. The translation of the Basis for Conclusions, Illustrative Financial Statements, Presentation and Disclosure Checklist is in process.
  • Spanish translation of Government Loans (amendments to IFRS 1).

These documents can be accessed on the eIFRS site (eIFRS subscribers only).

IASB tweaks its work plan

01 May, 2012

The IASB has released an updated work plan, dated 23 April 2012, which updates the expected timing of various projects. There is only one change, deferring the timing of the post-implementation review of IFRS 3. However, there are a number of milestones expected the coming months.

The post-implementation review of IFRS 3 Business Combinations will now not be initiated before the third quarter of 2012 (previously expected in the second quarter).

The following are the milestones expected to be reached  by the end of June 2012:

Click for IASB work plan as of 23 April 2012 (link to IASB website). We have updated our project pages to reflect the updated work plan and other known developments.

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