May

Public conference call of the EFRAG Planning and Resource Committee (EFRAG PRC)

27 May, 2014

On June 5, 2014, the Planning and Resource Committee of the European Financial Reporting Advisory Group, (EFRAG) will hold a public conference call.

In order to register for the conference please follow details within the press release on the EFRAG website.  The full agenda can also be obtained from the EFRAG website.

Agenda for the inaugural meeting of the IFRS Taxonomy Consultative Group

27 May, 2014

The agenda is available for the inaugural meeting of the IFRS Taxonomy Consultative Group (ITCG), which be held in London on 29 May 2014. The two major discussion blocks will focus on governance questions and a first batch of content questions.

The agenda is summarised below:

Thursday 29 May 2014 (09:00-17:00)

  • Welcome and introduction of members
  • IFRS Taxonomy Overview - current and future activities
  • Adoption - review of a IFRS Taxonomy jurisdictional survey
  • Governance
    • The IFRS Taxonomy Due Process
    • ITCG working practices
    • Content Transparency – IFRS Taxonomy update document
  • Content
    • Review of proposed common practice additions
      • Pharmaceuticals & Biotechnology
      • Transport
    • Review of revenue recognition and other issues
  • Technology - Data Modelling IFRSs
  • ITCG member updates
  • Wrap-up and administrative matters

Agenda papers for this meeting are available on the IASB's website.

GRI proposes governance reform

27 May, 2014

The Global Reporting Initiative (GRI) has announced a series of proposed governance changes which are designed to strengthen its role as a standard setter for sustainability reporting and enhance global acceptance of its role. The proposed changes include the creation of a separate standard setting side of GRI, including a new Sustainability Reporting Standards Board (SRSB), reforms to due process including a new Due Process Oversight Committee (DPOC), and the creation of an independent appointment process through an Independent Appointments Committee (IAC).

The overall governance structure proposed by the GRI includes the new standard setting arrangements, new protocols for due process and transparency, and the establishment of an independent public funding base for the standard setting activities.

Some of the key features of the proposed standard setting arrangements are set out below:

Sustainability Reporting Standards Board (SRSB)
  • An independent operating entity under the auspices of GRI (and solely funded by it) with sole responsibility for setting globally accepted standards for sustainability reporting, including complete responsibility for all SRSB technical matters
  • Creates Sustainability Reporting Standards (SRSs), related interpretations and guidance, and frequently asked questions (FAQs) which are considered authoritative pronouncements
  • Creates authoritative pronouncements in the public interest, and is sole judge of whether such pronouncements are in the public interest
  • Comprised of 15 members drawn from various identified stakeholder constituencies and appointed for three year terms (renewable once) by the Independent Appointments Committee (IAC)
  • Required to follow due process under a Due Process Protocol (also subject to consultation), including setting its technical agenda, publishing and considering feedback on exposure drafts, considering project working groups, public hearings and field tests (as considered necessary), publishing basis for conclusions with SRSs, and ensuring meetings are open to the public (including making agenda papers and other documents available in advance of meetings)
Due Process Oversight Committee (DPOC)
  • An independent committee under the auspices of GRI (and funded by it) with primary responsibility for ensuring that the standard setting activities of the SRSB are conducted in accordance with its due process
  • Comprised of four ordinary members, plus a Chair, appointed by the Independent Appointments Committee (IAC) for three year terms (renewable once)
  • Confirms due process has been followed before an authoritative pronouncements can be issued, but does not consider any technical assessment of proposed SRSs when forming an opinion on due process
Independent Appointments Committee (IAC)
  • An independent committee under the auspices of GRI (and solely funded by it) with primary responsibility for appointing qualified, competent, disinterested persons, of independent mind, to the Sustainability Reporting Standards Board (SRSB) and the Due Process Oversight Committee (DPOC)
  • Comprised of five members (one elected as a Chair), appointed by the GRI Board on recommendation of the GRI Global Nominations Committee
  • Meets annually or as necessary to fill vacancies in accordance with outlined criteria and other requirements

The GRI governance proposals are open for comment until 9 July 2014. Click for GRI announcement and access to the detailed proposals on the GRI website.

ASBJ begins publishing discussion paper series

26 May, 2014

The Accounting Standards Board of Japan (ASBJ) has published the first issue of a new series of short discussion papers intended to contribute to the global discussion around financial reporting standards. Issue No.1 is entitled 'Is OCI Unnecessary?'.

The paper explores the possibility of abolishing or minimising the use of other comprehensive income (OCI) in the financial statements. It does so by considering the usefulness of financial information if the same measurement basis must be used for measuring an asset or a liability both from the perspective of the entity's financial performance and its financial position (abolishing the use of OCI would mean that it would be impossible to use two measurement bases to measure the same asset or liability).

The paper comes to the conclusion that always using the same measurement basis would be unrealistic as users have increasingly called for more information to measured at current value on the face of the balance sheet. Moreover, the ASBJ points out that the Conceptual Framework itself indicates that the purposes of balance sheets and income statements are not necessarily congruent with each other, and that the use of two different measurement bases could increase the usefulness of the financial information presented. Overall, the paper concludes setting the goal of abolishing or minimising the use of OCI "would be inappropriate or unfeasible", and that on the contrary the continued use of OCI is necessary to maintain the usefulness of financial information.

Please click for access to the paper on the ASBJ's website.

Agenda for May 2014 Emerging Economies Group meeting

26 May, 2014

The agenda is available for the meeting of the Emerging Economies Group (EEG) and International Accounting Standards Board (IASB), which is being held in Moscow on 28-29 May 2014. The meeting will focus on the equity method of accounting (including a paper prepared by the Korean Accounting Standards Board (KASB)), the definition of "close members of the family of a person” in IAS 24 'Related Party Disclosures', and the recognition of elements of financial statements. The meeting will also discuss a number of the IASB's current projects and consider a number of other topics.

The full agenda is summarised below:

Wednesday 28 May 2014 (09:30-21:00)

  • Address by hosting country (Russia)
  • Address by the EEG Chair and Vice-Chair
  • Presentations on the equity method:
    • Korean Accounting Standards Board
    • International Accounting Standards Board
  • Group photo
  • Discussion on equity method
  • Administration issue - topics for next meeting
  • Welcome dinner

Thursday 29 May 2014 (09:30-14:30)

  • IASB updates - including agriculture accounting and rate-regulated activities
  • IAS 24 Related Party Disclosures - definition of "close members of the family of a person”
    • Group discussion of an issue raised by The Saudi Organization for Certified Public Accountants
  • Recognition in the Conceptual Framework
    • Consideration of an issues paper prepared by the National Organization for Financial Accounting and Reporting Standards, Russia
  • Discussion and approval of Communiqué
  • Meeting summary
  • Working lunch

 

Agenda papers from this meeting are available on the IASB's website.

Deloitte comment letter on IFAC supplementary financial measures proposals calls for global coordination

25 May, 2014

Deloitte Touche Tohmatsu Limited has responded to the Professional Accountants in Business Committee (PAIB) of the International Federation of Accountants (IFAC) on its exposure draft for an International Good Practice Guidance (IGPG) on 'Developing and Reporting Supplementary Financial Measures—Definition, Principles, and Disclosures'. We support the objective of developing guidelines on supplementary financial measures, but call for greater global coordination between the various global and other initiatives in this area.

We support the objective of achieving a set of commonly shared guidelines on the presentation of, and information about, supplementary financial measures (SFMs), whose objective would be ensuring the quality, transparency and usefulness of the financial information provided to users, regardless of whether such supplementary financial measures are included within or outside of financial statements. We believe this objective is important given the widespread use of such measures and existing diversity in presentation and explanation of such measures around the world.

However, we note that there are various initiatives in the area of supplementary financial measures in addition to the IFAC PAIB proposals, including:

  • Existing guidance in some jurisdictions, e.g. Australia, New Zealand and Canada
  • Separate proposals on this topic from the European Securities and Markets Authority (ESMA)
  • Expected guidelines from the International Organization of Securities Commissions (IOSCO)
  • The International Accounting Standards Board's (IASB) indicated intention to research the presentation and disclosure of non-IFRS financial information as part of its disclosure initiative project.

In light of the above, our comment letter makes the following observations:

Therefore, due to the global nature of the subject and the varied placement of SFMs (i.e. inside/outside financial statements), care should be taken that actions or guidance targeted at a global audience do not conflict with global initiatives undertaken by global accounting standard-setters and regulators. We therefore strongly suggest that the IFAC PAIB liaises in particular with the IASB and IOSCO so as to coordinate its actions, as well as obtain input from them on any proposed IGPG on SFMs. In this way, we believe that the IFAC PAIB can most effectively contribute to the aim of high quality financial reporting applied without regional variation.

The full comment letter can be downloaded here.

May 2014 IASB meeting notes — Part 2

23 May, 2014

The IASB's meeting was held on 20–22 May 2014, some of it a joint meeting with the FASB. We have posted Deloitte observer notes from the IASB's sessions on equity method of accounting (research project and other net asset changes) and insurance contracts.

Click through for direct access to the notes:

Wednesday, 21 May 2014

You can also access the preliminary and unofficial notes taken by Deloitte observers for the entire meeting. Notes from the remaining sessions will be posted in due course.

EFRAG extends the comment letter deadline on disclosure initiative

23 May, 2014

The European Financial Reporting Advisory Group (EFRAG) has extended the comment deadline for its draft comment letter on the International Accounting Standard Boards’ (IASB’s) Exposure Draft ED/2014/01 ‘Disclosure Initiative (Amendments to IAS 1)’ that was issued by the IASB on 25 March 2014.

EFRAG’s draft comment letter was issued on 11 April 2014 with a comment period until 12 May 2014.  The comment deadline has been extended to 20 June 2014 “to allow all interested stakeholders more time to respond”.

The press release can be accessed on the EFRAG website.

IASB to host live web presentation on the disclosure initiative ED

23 May, 2014

On 10 June 2014, the staff of the International Accounting Standards Board (IASB) will give a live web presentation on the IASB's Exposure Draft (ED) of proposed amendments to IAS 1 'Presentation of Financial Statements'.

The presentation will include an overview of the proposed amendments and a question and answer session. It will start at 11:30 UK time and will last approximately 30 minutes. Please click for more information and for registering on the IASB's website.

FRC calls for comments on the IAASB’s Exposure Draft on an auditor's responsibilities relating to 'other information'

23 May, 2014

The Financial Reporting Council (FRC) has requested comments from interested parties on the International Auditing and Assurance Standards Board’s (IAASB’s) recently issued revised Exposure Draft of a revised International Standard on Auditing 720 (ISA 720) dealing with an auditor's responsibilities relating to 'other information'. The FRC intends to use comments received to assist it in developing its response to the IAASB and to assist it in developing proposals for the adoption into the UK equivalent ISA (UK and Ireland) 720 Section A (Revised October 2012).

The IAASB issued an Exposure Draft for a revised International Standard on Auditing, ISA 720 ‘The auditor’s responsibilities relating to other information in documents containing or accompanying audited financial statements and the auditor’s report thereon’ in November 2012.  The revised Exposure Draft responds to significant concerns raised in response to the IAASB's original proposals.

The FRC’s equivalent ISAs (UK and Ireland) are largely developed from the ISAs published by the IAASB.  The FRC consider that some of the IAASB proposals are consistent with revisions made to ISA (UK and Ireland) 720 (Revised October 2012) Section A – 'The auditor’s responsibilities relating to other information in documents containing audited financial statements' (link to FRC website).  The FRC also comments that a number of the IAASB proposals would be new in the UK.

The invitation to comment seeks to:

describe and distinguish the proposed changes that the FRC has already incorporated into ISA (UK and Ireland) 720 Section A (Revised October 2012) and the proposed changes that would be required to be made to ISA (UK and Ireland) 720 Section A, if the revised ISA were to be adopted for application in the UK and Ireland.

The FRC are keen to understand from respondents whether, and if so how, the proposed changes should be adopted in the UK through amendments to ISA (UK and Ireland) 720 (Revised October 2012) Section A “having regard to the inter-relationship between the IAASB’s proposals and the changes previously made by the FRC”. 

Comments are invited by the FRC until 18 June 2014.

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