Summary of changes

The following is a summary of the changes in the revised work plan, which is dated 1 October 2012:

• Agenda consultation - the timing for the issuance of the feedback statement from the consultation has been pushed back to the fourth quarter of 2012 (previously third quarter) and development of a strategy introduced during the first half of 2013 (this was previously indicated for the second half of 2012 but was removed in the July update to the work plan)
• Financial instruments - macro hedge accounting - a discussion paper on accounting for macro hedges is now expected in the first half of 2013 (previously second half of 2012)
• Leases - a revised exposure draft is now expected in the first quarter of 2013 (previously fourth quarter of 2012)
• Consolidation - Investment entities - finalisation of the amendments is now expected by the end of 2012 (previously third or fourth quarter of 2012) to accommodate the changes agreed at the September IASB meeting
• Insurance contracts - consistent with the IASB's previously announced decision, a 'targeted' exposure draft is the next due process document to be issued, and is expected in the first half of 2013 (previously a review draft or revised exposure draft was expected in the second half of 2012)
• Annual improvements - the expected timing of due process documents has been pushed out by a quarter, meaning finalised amendments from the 2010-2012 cycle are now expected in the second quarter of 2013 (previously first quarter) and an exposure draft from the 2011-2013 cycle is expected by the end of 2012 (previously third quarter of 2012)
• IAS 8 amendments - an exposure draft remains expected by the end of 2012 (previously third or fourth quarter 2012), but it is expected the staff will recommend to the IASB at its October meeting that publication of the ED should be suspended pending the broader conceptual framework project
• Interpretations - finalised Interpretations are expected on levies to operate in a specific market in the first half of 2013, and on put options over non-controlling interests in the second half of 2013
• New amendments - exposure drafts are expected by the end of 2012 in relation to IFRS 10/IAS 28 (sales or contributions of assets between an investor and its associate/joint venture), IAS 28 (reflecting other net asset changes when applying the equity method of accounting) and IFRS 11 (acquisition of an interest in a joint operation)
• New/reactivated research projects - the IASB expects to issue discussion papers on rate-regulated activities (second half of 2013) and the conceptual framework (first half of 2013), and an exposure draft on bearer biological assets under IAS 41 in the first half of 2013
• Post-implementation reviews - the initiation of the review of IFRS 3 Business Combinations will now not commence before the first quarter of 2013 (previously not before fourth quarter of 2012).

Due process documents expected before the end of 2012

The following due process documents are expected to be issued by the end of 2012 (this includes those items already noted above in some cases):

• Finalised standards, amendments or other pronouncements
  • Financial instruments - General hedge accounting
  • Consolidation - Investment entities
• Exposure drafts
  • Financial instruments - Limited reconsideration of IFRS 9
  • Financial instruments - Impairment
  • Annual improvements - 2011-2013 cycle
  • IAS 8 amendments (possibly to be suspended as noted above)
  • IFRS 10/IAS 28 - Sales or contributions of assets between an investor and its associate/joint venture
  • IAS 28 - Reflecting other net asset changes when applying the equity method of accounting
  • IFRS 11 - Acquisition of an interest in a joint operation.
• Other documents
  • Agenda consultation feedback statement.

Click for IASB work plan as of 1 October 2012 (link to IASB website). We have updated our project pages to reflect the updated work plan and other known developments.

The announcement of the prototype framework follows on an earlier draft outline and links to comments made by Paul Druckman (IIRC CEO) at the recent conference, where he noted the importance of the pilot programme in developing the framework:

... I am so pleased that the Pilot Programme will be extended for two further reporting cycles, so that this year’s innovation can be continued and tested, and shared with others.  We are seeking to encourage a process of continuous improvement in the quality of corporate reporting.  The Framework will be so much more valuable with the benefit of this extensive testing, providing the intellectual underpinning to the evolution in corporate reporting we are seeking to bring about.

In his speech, Mr Druckman also called on governments and organisations to prepare for the introduction of integrated reporting:

... in the coming year we plan to use the collateral we have gained from the experiences of Pilot Programme businesses and investors to increase our profile and influence.  To begin this process, we will be asking each of [the Pilot Programme] organizations to sign up to a public statement which will be published in early October.  The statement will outline the broad benefits of our market-led approach and will call on Governments, regulators and standard setters to sit up and take notice of our movement.  We need to encourage them to think about, and prepare for, Integrated Reporting, in advance of the Framework being published at the end of next year.

A Consultation Draft of the Framework is expected to be released in April 2013 followed by a final “version 1.0” in December 2013.   The IIRC is also planning to release subsidiary papers on a range of topics during late 2012 and 2013.

Click for (links to IIRC website):

• IIRC Prototype framework (note: this is the finalised version released 26 November 2012)
• Full text of Paul Druckman's speech
• IIRC press release

The forum included discussions on changes implemented by  IFRS 10 Consolidated Financial Statements, IFRS 11 Joint Arrangements, IFRS 12 Disclosure of Interests in Other Entities, IFRS 13 Fair Value Measurement; IFRS 9 Financial Instruments and the financial instruments project; and the exposure drafts on leases and revenue recognition. The modifications to these standards are expected to “change the international financial reporting landscape in a dramatic manner.”

Additionally, Deloitte IFRS experts, Veronica Poole (Global IFRS Leader Technical) and Andrew Spooner (Partner, IFRS Centre of Excellence, UK) discussed IASB and FASB convergence issues such as those regarding financial instruments project, the implications of the US SEC Staff report, and the IASB unfinished agenda under the “MoU” with the FASB.

This forum is part of a series of Deloitte IFRS seminars in the Middle East to address these ongoing changes to IFRS.

The press release is available on Deloitte.com.