Highlights from the meeting included:

IASB and IFRIC developments

• Participants discussed the status of the projects on the IASB's work plan:
  • The IASB plans to resolve all the major issues related to insurance contracts by June 2014;
  • both the IASB and FASB are hoping to finalise their standards on leases by the end of 2014;
  • good progress is being made on producing a discussion paper on rate regulation;
  • the revenue recognition project is close to being finalised;
  • the goal of the comprehensive review of the IFRS for SMEs is not to have too many changes;
  • the post-implementation reviews of IFRS have not disclosed any major failings so far; and
  • the conceptual framework discussion paper received 220 comment letters so far.
  General comments included that regulators should be reminded that the insurance contracts, and other, standards are meant for general purpose financial statements and not necessarily for regulatory purposes. The opinion was also voiced that that post-implementation reviews are done too soon after the implementation of a standard, with little empirical evidence.
• Participants then discussed the criteria used by IFRIC to place issues on its agenda. Representatives' comments included the following:
  • IFRIC is not dealing with enough issues and is reluctant to issue interpretations.
  • Leaving issues to the exercise of judgement could result in differing interpretations.
  • There is the danger of jurisdictions writing their own guidance if authoritative interpretations are not issued by IFRIC.
  • Items rejected by IFRIC on the grounds that it will not reach a consensus, should not be treated as non-issues and should automatically be referred to the IASB.
  • Questions to stakeholders should be clear and unambiguous; efforts should be made to ascertain if an issue is widespread and if there is diversity in its treatment; proportionality should be kept in mind.

Report back on IFASS member projects

Participants discussed two projects run by IFASS members: 'Role of the Business Model in financial reporting' (EFRAG) and 'Goodwill impairment and amortisation' (OCI, EFRAG, ASBJ).

IPSASB matters

Participants received a high-level comparison of the IPSASB's and the IASB's conceptual frameworks and discussed user groups and elements of financial statements. The IASB Vice-Chairman said that the IASB was very interested in the IPSASB's work and stated that he thought that both organisations were not that far apart in their views on measurement. Participants also received an update on lastest IPSASB activities.

Conceptual Framework project

Participants received and discussed a presentation on the role and purpose of conceptual frameworks. Also, they reviewed a paper proposing a revised financial performance reporting model and exploring its potential implications for measurement. Finally they discussed the IASB's disclosure initiative and the questions of what factors are influential/ what are pitfalls when considering materiality and how far the IASB should take this project.

Charter

Participants discussed the draft of the new statement outlining relationship of IASB and NSSs and the new IFASS Charter. In both cases participants reached a consensus to express their support for the draft documents.

Topical Issues

Participants then discussed several topical issues:

• Discount rate issues,
• Application issues related to IFRS 11 Joint Arrangements,
• Macro hedging,
• Accounting for foreign currency embedded derivatives under international competitive bidding,
• The equity method: A measurement basis or one-line consolidation.

Reports from regional groups

Reports were received from the AOSSG, EFRAG, GLASS, and PAFA representatives.

New IFASS member projects

Participants discussed three new projects taken up by IFASS members: 'The statement of cash flows' (FRC), 'Complexity of the annual report' (EFRAG), and 'The use of information by capital providers' (EFRAG in co-operation with ICAS).

Contribution of accounting standards to economic development

As last point of the technical debate participants received a presentation the opportunities and threats posed by accounting standards in the proper functioning of the capital markets. Matters covered by the presenter included the following:

• Standards setters are in the information business, but there are increasingly gaps in the information provided. This results in macro-economic, micro-economic, macro-environmental threats and opportunities to the information market.
• The threats and opportunities are driven by social values and practices with systemic feedbacks across entities and economies.
• There is a danger that the accounting profession is focused on micro matters.
• There could be an increasing crisis of confidence in the work of standard setters.

The presenter was encouraged to develop his paper further. It was suggested that the issue of whether financial reporting could affect financial stability might be a topic for consideration.

Administrative matters

The next IFASS meeting will be held in London on 30 September and 1 October 2014. The IFASS meeting in the first half of 2015 will be held in Jordan (23-24 March).

Please click for the full report (link to the website of the Australian Accounting Standards Board).