February

ACCA outlines policy positions on public sector reporting

14 Feb, 2013

The Association of Chartered Certified Accountants (ACCA) has released an updated paper outlining its policy positions on a range of themes for public services. In addition to a number of other themes, the paper supports the use of accrual accounting and sustainability reporting in the public sector, and puts forward policies and recommendations in these areas.

The paper, Setting high professional standards for public services around the world, sets out ACCA’s policies for members, employers and a wide range of external stakeholders with an interest in public services. It includes objectives such as setting out criteria for achieving strong public financial management, good governance and a strong ethical culture in the public sector.

Financial reporting

In relation to financial reporting, the paper notes that transparent financial reporting is imperative from a public accountability perspective. It takes that view that governments should aim "to provide financial information based on international accounting standards to improve both transparency and accountability and to get a tighter grip on fiscal management".

On the question of which standards should be applied by governments, the paper takes the view that the development of global accounting standards is the main responsibility of the IASB.  It however also supports the development of International Public Sector Accounting Standards (IPSAS) by the International Public Sector Accounting Standards Board (IPSASB), but does so in the context of the IPSASB interpreting IFRS accounting standards for the public sector.

The paper makes the following observation:

In our view there should not be any conflict between IFRS and IPSAS standards for use in the public sector. IPSAS standards have an important role to play in dealing with specific public sector issues for which there is no IFRS, such as service concessions: grantors, revenue and non-exchange transactions, presentation of budget information in financial statements and disclosure of financial information about the general government sector.

The paper outlines the approach taken by governments in various jurisdictions, and notes that there is a cash-based IPSAS that is followed by some countries, but that "in the long term the accruals basis of accounting is the right way forward for accounting for public funds as it increases transparency and accountability."

Furthermore, the paper expresses the view that the audit of financial statements is essentially the same in the private and public sectors, and accordingly supports the adoption and implementation of International Standards on Auditing (ISAs) for public bodies.

Sustainability reporting

On the topic of sustainability reporting and corporate social responsibility (CSR), the paper puts forward the view of a need to be aware of the differences between the private and public sectors for sustainability reporting.  The paper goes on to note the rationale for government sustainability reporting can be driven by many different factors, such a requirement imposed by donor organisations, or that the existing frameworks such as that produced by the Global Reporting Initiative (GRI) provide incentives to "embrace sustainability reporting ... to act as an example for the private sector" .

However, on the latter point, the paper sounds a note of caution:

Although lessons from private sector sustainability reporting and CSR are valuable, an understanding of the importance of sustainability action and reporting in public services should take account of the nature of the purpose, motivations and responsibilities of public services, rather than attempting to adopt wholesale an approach to reporting that may be more appropriate to the private sector.

Click for access to these items on the ACCA website:

Summary of the January 2013 Trustees' meeting

13 Feb, 2013

The IFRS Foundation Trustees' have announced the summary of the conclusions for their meeting held in Hong Kong on Thursday 24 January 2013.

The summary of the meeting consists of the following reports:

  • Trustees' Executive session
    Some of the topics discussed during this session revolved around the Trustees' international strategy, the challenges occurring by the lack of a decision by the US Securities and Exchange Commission in regards to the adoption of IFRSs in the United States, the G20's objective, funding of the organisation, feedback on the November 2012 proposal to create the Accounting Standards Advisory Forum, and the strategy proposals for developing XBRL for the IASB.
  • IASB Chairman
    Hans Hoogervorst provided an update on the IASB's current activities. Some of the report discussed the current state of the convergence projects with the FASB. A final standard on revenue recognition is expected to be issued mid-2013. Exposure drafts on leases and insurance contracts are expected in the first half of 2013. On the impairment project, an exposure draft on the IASB 'three-bucket' model is expected as soon as possible, with the aim to finalise impairment requirements in 2013.
  • Due Process Oversight Committee Chairman
    Scott Evans discussed the events from the January 2013 DPOC meeting which had topics covering the revisions to the Due Process handbook, the Feedback statement and Due Process Protocol. The Trustees have approved all three items for publication. Other items reported on were reviews of (1) process regarding educational materials, (2) IASB's current technical activities, (3) web site improvements, (4) approval of Darrel Scott as chair of the SMEIG, and (5) correspondence.
  • Korean experience of IFRS adoption
    A presentation and report was provided detailing the efforts Korea went through during their adoption to IFRSs.
  • Monitoring Board representatives meeting
    An update was provided on the progress made in following up the recommendations of the review of the governance of the organisation.
  • Regional outreach activity
    The Trustees hosted jointly with the Hong Kong Institute of CPAs a panel discussion on the future of financial reporting. A video of the discussions is available on the IASB website.

The full summary of conclusion of the IFRS Foundation Trustees' meeting is available on the IASB website.


Deloitte IAAER Scholarship Programme launched

13 Feb, 2013

Deloitte (DTTL) and the International Association for Accounting Education and Research (IAAER) today announced the Deloitte IAAER Scholarship Programme, naming five associate professors from Brazil, Indonesia, Poland, Romania and South Africa as the programme’s inaugural scholars.

Mentors will be assigned to each scholar to support them as they increase their exposure to internationally recognised accounting scholars, best practices in accounting and business education and research, and a global peer network.

Ongoing mentorship is a critical element of the Deloitte IAAER Scholarship Programme and some well-known and highly accomplished accounting experts have volunteered their support. These include former member of the Financial Accounting Standards Board, Katherine Schipper (Duke University); former member of the International Accounting Standards Board, Mary Barth (Stanford University); Chika Saka (Kwansei Gakuin University); Sidney Gray (University of Sydney); and Ann Tarca (University of Western Australia).

The scholars, who must be a sitting lecturer, assistant, or associate professor holding a PhD (or comparable degree) in a faculty that teaches accounting, auditing, or financial reporting, are chosen for three years and attend IAAER co-sponsored conferences, workshops, and consortia as well as the IAAER World Congress.

In the long term, the programme aims at supporting better accounting education and improving the quality of financial reporting and auditing. The next round of scholarships will open in 2016, with applications considered in 2015.

Please click for more information on the Deloitte Global website.

Agenda for the upcoming Capital Markets Advisory Committee (CMAC) meeting

13 Feb, 2013

The Capital Markets Advisory Committee (CMAC) is meeting in London on 7 March 2013. The tentative agenda for the meeting (as of 12 February 2012) is now available.

 

Agenda for the meeting

Thursday, 7 March 2013

  • Welcome
  • IASB and IFRS Interpretations Committee activities (work plan update)
  • overview of the ASAF’s role in the standard setting process
  • Conceptual Framework
    • Elements of financial statements
    • Reporting entity
    • Measurement
    • Presentation
    • Disclosure
  • Insurance contracts
  • Financial instruments: Classification and measurement (Limited reconsideration of IFRS 9)

New IAS Plus page on Research and Education

12 Feb, 2013

We have created a new page on IAS Plus that is tailored to help users easily locate academic accounting material and resources relevant for educational research that is available on IAS Plus and other useful sites.

Primarily, our new page is aimed at offering easy access to material already on our site. However, we also aim at broadening our horizon with and contributing to, to a certain degree and over time, research focused contributions to the international accounting debate supporting the IFRS Foundation’s objective of developing a single set of high quality global accounting standards and our endeavour to reinforce it.

Researchers have often pointed out how standard-setting can benefit from academic research:

  • Academic research is generally grounded in theory which prevents it from being biased
  • Researchers are guided by their research results and not by the wish to transport a certain opinion as their main incentive is to build their own reputation and that of their institution
  • Peer review ensures that researchers are judged by the quality and rigour of their research, not by the results of it
  • Research is always innovative – researchers are constantly looking for relevant and interesting new research questions.

It is for the same reasons that we believe that not only standard-setting will benefit from academic research but also our IAS Plus readership: Supplementing our daily news with information about research will offer our users an additional base of neutral, independent material that will fit well with our aim of providing readers with up-to-date unbiased information about international financial reporting.

At the same time we are well aware that IAS Plus is a page many students and researchers turn to as they value the wealth of our repository of comprehensive accounting information offering a library of news, developments and publications going back to December 2000 and summaries of standards and corresponding e-learning.

The new education and research page aims at being a new central landing page for education-related information on IAS Plus. From a single page it offers access to our standard summaries, our e-learning, our webcasts and podcasts, the library of accounting research papers we are in the process of building up and will continue to add to, and a list of useful links including IASB educational material and free IFRS resources on the European Commission website.

Access to our new site is available through the link below and through the Resources menu item at the top of each IAS Plus page.

Agenda for February 2013 IASB meeting

08 Feb, 2013

The International Accounting Standards Board has released the agenda for its meeting to be held on 18-22 February 2013, which includes education sessions and a joint meeting with the FASB. Topics to be discussed include unit of account for fair value measurements, an IFRIC update, the annual improvements 2010-2012 project in regards to IFRS 2, IFRS 8, and IFRS 13, novation of derivatives, bearer biological assets (IAS 41), guide for micro entities in applying the IFRS for SMEs, matters arising from the IFRIC, and education sessions and continuing discussion on many major projects (conceptual framework, revenue recognition, leases and insurance contracts).

The full agenda for the meeting, as of 8 February 2013, can be found here.  We will post any updates to the agenda, and our Deloitte observer notes from the meeting, on this page as they are available.

EFRAG and FRC publish feedback statement on income tax discussion paper

08 Feb, 2013

The European Financial Reporting Advisory Group (EFRAG) and the United Kingdom Financial Reporting Council (FRC) have posted a feedback statement on Discussion Paper (DP) ‘Improving the Financial Reporting of Income Tax’. The feedback statement provides a summary of the main issues received from respondents along with the EFRAG’s and FRC’s responses to those issues.

Issued in December 2011, the DP’s objective was to stimulate debate on the accounting for income tax. The EFRAG and FRC received 29 comment letters regarding the DP, primarily from accounting organisations, national standard setters, preparers and business associations. The most supported proposals in the DP were (a) effective tax reconciliation; (b) improved disclosure on deferred tax assets and tax losses; and (c) recognition and measurement of uncertain tax positions. The least supported proposals by respondents were (a) reconciliation of the tax paid with the current tax expense; (b) discounting of deferred tax assets and liabilities; (c) disclosure on uncertain tax positions; and (d) disclosure that involves forward-looking and ‘entity-sensitive’ information.

The feedback provided will be used by the EFRAG and the FRC when meeting with the IASB on discussions for the improvement to IAS 12.

The press release and the feedback statement are both available on the EFRAG website.

Summary of the January 2013 DPOC meeting

08 Feb, 2013

The IASB has posted to its website a summary of the 22 January 2013 Due Process Oversight Committee (DPOC) meeting.

Topics discussed during the DPOC meeting were:

    1. Revisions of the Due Process Handbook — Consideration were made for the proposed revised version of the Due Process Handbook (DPH), a feedback statement on the results of the consultation on the draft of the DPH that had been issued for comment, and proposed revised Due Process Protocol (DPP) tables for publication on the website.
    2. IFRS Education Initiative: due process issues — An update on the planned due process that the Education Initiative staff intended to follow for each of the education products scheduled for 2013.
    3. Update on technical activities — Discussion were held on the current state of impairment, hedge accounting, insurance, and revenue recognition projects.
    4. Website project pages and DPOC web pages
    5. Small and Medium-sized Entities Implementation Group — Approval of the proposed changes to the terminology used in the Terms of Reference and Operating Procedures for the SME Implementation Group. The DPOC also supported the nomination of Darrel Scott as the new chair of the SMEIG, replacing the retiring Paul Pacter.
    6. Review of correspondence
    7. Any other business

The DPOC is responsible for approving due process and overseeing the IASB’s compliance with due process, and reviewing the Trustees’ fulfilment of their oversight function in accordance with the Constitution of the IFRS Foundation.

A summary of the meeting is available on the IASB website.

IFRS Foundation seeks to fill vacancies

07 Feb, 2013

The IFRS Foundation is calling for candidates to fill vacancies in the IFRS Trustees and IFRS Interpretations Committee.

The IFRS Foundation is seeking candidates from Asia-Oceania, South America and an “At Large” position to fill IFRS Trustees vacancies that will become available in July 2013 and January 2014.   Under the IFRS Foundation Constitution, there are 22 IFRS Trustees, which are required to broadly reflect the world’s capital markets and have a diversity of geographical and professional backgrounds.  Trustees are appointed for a three year term (with one possible renewal) and oversee the IFRS Foundation and the International Accounting Standards Board (IASB).

The IFRS Trustees are also inviting applications from suitable candidates to fill up to four vacancies on the IFRS Interpretations Committee.  After the appointments, the Committee will comprise 14 members and a non-voting Chairman.

Those interested in applying for the positions are asked to respond by 8 March 2013.

Click for the following information on the IASB website:

IASB and IIRC announce cooperative agreement

07 Feb, 2013

The International Accounting Standards Board (IASB) and International Integrated Reporting Council (IIRC) have announced a Memorandum of Understanding (MoU), where both organisations will strengthen their cooperation on the development of the IIRC's integrated corporate reporting framework.

The purpose of the MoU is to create the basis for cooperation, coordination, and alignment in areas the two organisations share mutual interests, in particular:

Efforts to promoting the global harmonisation and clarity of corporate reporting frameworks, standards and requirements in ways that drive coherence, consistency and comparability, leading to improved efficiency and effectiveness in corporate reporting practices;

the development of their respective reporting frameworks, guidelines and standards; and

the related transparency and sharing of relevant and significant information between them.

In October 2012, the IIRC established a similar MoU with the International Federation of Accountants (IFAC).

The IIRC expects to issue a consultation draft on the International Integrated Corporate Reporting Framework on 16 April 2013. A final version is expected in December 2013.

The press release and the MoU are both available on the IASB website.

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.