Report on the June 2014 IFRS Advisory Council meeting

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01 Jul, 2014

A report on the IFRS Advisory Council meeting held in London on 9-10 June 2014 has been posted to the IASB's website. The meeting included the updates on the activities of the Council, IFRS Foundation, International Accounting Standards Board (IASB) and Effect Analysis Consultative Group, as well as discussions focused on the role of judgement in financial reporting, the preliminary feedback on the post-implementation review of IFRS 3, the Conceptual Framework project, and the proposed approach to implementation support groups. A number of other topics were also discussed.

Highlights from the meeting include:

  • Role of judgement.  There was strong support for principles-based accounting. The most members also felt that the use of judgement should be expected and that the IASB should consider this when developing its principles. Also, many members believed that the IASB should not include anti-abuse precautions in its Standards.  
  • Conceptual framework.  There was support by the members for the decisions made on the scope, purpose and status this project, included its the proposed time line; however, some noted that significant issues should not be rushed for the sake of meeting this time line. The members also noted that the IASB should carefully examine the relationship between the Conceptual Framework and its Standards. In addition, the members expressed concerns with the reintroduction of prudence and warned against it conflicting with neutrality.
  • Implementation support groups. There was support for the use of implementation groups; however, certain provisions should be considered. These provisions included: (1) any future group should be considered on a case by case basis and whether it is necessary at all, and (2) transparency is needed on the group's activities. In addition, the members asked for an evaluation of the implementation groups for revenue and impairments to occur in order to determine their effectiveness.
  • Terms of reference. There were recommendations to revise the Council’s secondary objective in order to clear up any misconceptions regarding its independence and objectivity.

The next meeting of the IFRS Advisory Council is scheduled for 13-14 October 2014 in London.

The full report on the IFRS Advisory Council meeting is available on the IASB website.

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