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Summary of the April 2014 DPOC meeting

  • IFRS Foundation (blue) Image

30 Apr 2014

The IFRS Foundation has published a summary of the 8 April 2014 Due Process Oversight Committee (DPOC) meeting that was held in Sydney during the Trustees' meeting.

Topics discussed during the DPOC meeting were:

 

Update on technical activities

Updates were given on the progress of the major projects as well as implementation and maintenance projects on the IASB's work plan.

  • Regarding macro hedge accounting, the DPOC was informed that the IASB would shortly publish a Discussion Paper.
  • On insurance contracts the DPOC was updated on progress following the responses, outreach and fieldwork that had been undertaken on the proposals in the IASB's revised Exposure Draft. The DPOC was told that while there was broad support for the proposals, there remain some significant areas of concern, in particular around complexity and accounting mismatches. The DPOC was also informed that in February 2014, the FASB decided that it would not pursue convergence in this area, but instead would make limited, targeted improvements to its existing standards on insurance.
  • The DPOC noted that discussions were continuing on leases. While there was praise for the Boards' efforts to respond to concerns regarding the proposals issued in the original ED (issued in 2010), there remained considerable concern about the cost and complexity of the proposals in the second ED.
  • On rate-regulated activities, the DPOC was updated on the progress of the comprehensive project. At its meeting in April 2014, the IASB would consider the due process steps taken so far on the research project and the staff would be seeking permission to start balloting the DP.
  • On revenue recognition, the DPOC was informed that balloting was complete on the proposed new standard and was expected to be issued in the second quarter of 2014. Good progress was being made in working to establish the revenue implementation group.
  • On the conceptual framework project, it was noted that many respondents to the discussion paper had expressed the view that the IASB should reconsider a number of aspects of the Framework that had been published in 2010, in particular the treatment of prudence, reliability and stewardship.

The implementation and maintenance projects the DPOC was updated on were the disclosure initiativebearer plants, and equity method in separate financial statements. The DPOC noted that the timelines for a number of projects had slipped. This was in part attributed to the priority given to the macro hedging project.

 

IFRS 9 Financial Instruments

The DPOC received a report on the lifecycle of the due process to date on the development of the final version of IFRS 9. The DPOC was informed that the IASB's plan was to publish the final version of IFRS 9 by the end of the second quarter or early in the third quarter of 2014. The DPOC was informed that the IASB had decided on a mandatory effective date for IFRS 9 of 1 January 2018, which balanced the desire to have the new model effective, the timeline for entities to put the necessary systems changes into place, and the desire to allow time to progress the insurance contracts project.

On impairment, the DPOC received a report summarising the due process to date on the project. The DPOC was reminded that, at its meeting in January 2014, the IASB representatives had confirmed that the FSB now accepted that there would not be convergence on impairment, but wanted to see the impairment proposals in place as soon as possible. The DPOC was also informed that the IASB was considering to establish an Impairment Implementation Group, similar in concept to the Revenue Implementation Group that was being set up.

The DPOC also received a report summarising the due process to date on the project on classification and measurement. While originally it was hoped the project would bring the requirements in IFRSs and US GAAP closer together, the DPOC was informed that the FASB had made a number of tentative decisions since December 2013 that indicated that it would abandon convergence.

 

Effects Analysis Consultative Group

The DPOC received a progress report on the work of the Effects Analysis Consultative Group (EACG), which had been set up to advise the IASB in developing an agreed methodology for field testing and effects analyses. The DPOC was content with the general direction of the draft report, but did have some specific questions and requests. The plan is for the EACG to finalise its report by the middle of June 2014 and, after consulting the IASB and the Advisory Council, to submit a final report to the DPOC in July 2014.

 

XBRL

The DPOC received a progress report on the IASB's proposals to revise the due process for updating the IFRS Taxonomy. The DPOC questioned the proposal for IFRS Taxonomy consultation documents to have only 60-day comment periods but was otherwise content with the proposals as outlined.

 

Reporting of Outreach and Fieldwork and review of correspondence

The DPOC received an update on the staffs continuing efforts to improve the transparency of the reporting of feedback from outreach with investors and other users of financial statements and the reporting of the results of fieldwork undertaken on particular projects. The DPOC also noted that no new correspondence cases had been submitted since the January 2014 meeting.

 

Update on consultative groups

The DPOC considered an update on the proposed memberships of a number of consultative groups: The size of the SMEIG will be increased to a maximum of 30 members as from July 2014 with a number of places kept vacant in case suitable candidates were identified at a later date; a new consultative group, the IFRS Taxonomy Consultative Group, will be set up; and the membership of the revenue implementation group that is being set up in conjunction with the FASB will be announced around the time the standard is issued.

 

Education materials

The DPOC received an update report on the material that the IFRS Education Initiative was developing in 2014 and the level of review that the staff planned should take place in each case. The DPOC was satisfied with the level of planned review for each product.

Please click for the full summary of the meeting on the IASB's website.

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