Current status

The revised time table for the major projects is now as follows:

* In­di­cates a change since the previous work plan update on 28 October 2014.

Click for the IASB work plan dated 24 November 2014 (link to IASB website). We have updated our project pages to reflect the updated work plan and other known de­vel­op­ments.

The first comment letter refers to the IFRS IC’s tentative agenda decision on IFRS 12 Disclosure of Interests in Other Entities.   The IFRS IC took the tentative decision not to add to its agenda the request for clarification in respect of the requirements in paragraphs 12(e)-(g) of IFRS 12 which concern the disclosure of information about a subsidiary that has non-controlling interest that is material to the reporting entity.

ESMA agrees that neither an Interpretation nor an amendment to the Standard is necessary as “in the light of the existing IFRS requirements sufficient guidance exists”.  ESMA also “particularly welcomes” the reasoning in the tentative agenda decision that the approach chosen to present the required disclosures should reflect the disclosure objective of a Standard. 

The second comment letter refers to the IFRS IC’s tentative agenda decision on IFRIC 21 Levies.  The IFRS IC took the tentative agenda decision not to add to its agenda the requests to clarify accounting for the costs arising from recognising a levy.  ESMA has “serious concerns that the wording of the tentative agenda decision could have unintended consequences”.  ESMA comments that the tentative agenda decision “fails to clearly address the question whether a fixed production overhead can be recognised as part of the cost of a service provider’s inventory” and calls on the IFRS IC to clarify this point in its agenda decision.

Both the IFRS 12 and IFRIC 21 comment letters can be found on the ESMA website.

Click through for direct access to the notes:

Wednesday, 19 November 2014

• IFRS for SMEs

Thursday, 20 November 2014

• Leases

You can also access the preliminary and unofficial notes taken by Deloitte observers for the entire meeting.

As part of the IASB’s Research Programme, the Research Centre was created to raise awareness with the research community of the work the IASB has done. It contains internal and external intellectual resources, including engagements with the academic community, as well as other resources related to the 2014 IASB Research Forum.

For more information, see the press release on IASB’s website.

In its response to the consultation, the FRC agrees with IOSCO's overall view that NGFMs should be clear and not misleading. They support the fact that the proposed Statement encourages a focus on clear communication rather than setting out prescriptive rules. They are also pleased that the scope of the Statement excludes financial statement disclosures and GAAP measures provided in other documents.

The FRC's main concern regarding the proposals relates to ESMA's intention to issue guidelines in this area following their recent consultation and the desirability of a consistent approach between ESMA and IOSCO. With this in mind, they recommend that ESMA and IOSCO work together to produce a single set of guidelines, or at least to ensure that both sets of guidelines are consistent.

Some of the FRC's detailed comments include:

• A recommendation that all NGFMs required to be presented by law or regulation should be outside the scope of the Statement, rather than just those required by securities regulators.
• A concern that the scope of the proposed Statement is very broad, in particular that it covers prospectuses which often contain a significant amount of non-GAAP information.
• The lack of a reference to materiality in the proposed Statement.
• The fact that, for some NGFMs, it may not be possible to provide a comparable GAAP measure and a reconciliation to it, as required by the proposed Statement.

The full response can be downloaded from the FRC's website.

As well as the proposed ESMA and IOSCO guidelines, other recent pronouncements regarding NGFMs include the FRC's own statement on the reporting of exceptional items and the recent Guidance on Supplementary Financial Measures from the International Federation of Accountants (IFAC).

The topics dis­cussed were as follows (click through to access detailed Deloitte observer notes for each topic):

TUESDAY, 11 NOVEMBER 2014

Items for continuing consideration

• IAS 2 — Should interest be accreted on prepayments in long-term supply contracts?

Finalisation of tentative agenda decisions

• IFRS 12 — Disclosure of summarised financial information about material joint ventures and associates
• IAS 16 and IAS 2 — Accounting for core inventories
• IAS 16 — Accounting for net proceeds and costs of testing on PPE
• IAS 21 — Foreign exchange restrictions and hyperinflation
• IAS 39 — Holder’s accounting for exchange of equity instruments

New issues

• IFRS 10 — Control of a structured entity by an operating lease
• IFRS 10 — Control of a structured entity by a lender

You can also access the pre­lim­i­nary and un­of­fi­cial notes taken by Deloitte ob­servers for the entire meeting.

In 2013 the Competition Commission recommended that the FRC should require audit committees to publish the grade given to the audits inspected by its AQR team.  The FRC announced in April 2014 that it will consult on this recommendation in time for updates to the UK Corporate Governance Code to be made in 2016.  However, some Audit Committees have indicated that they may wish to implement aspects of the CMA’s recommendation in advance of these Code changes and so today's statement includes advice from the FRC on how to go about doing this.  The FRC advises that:

• In considering how to report on an inspection it is important that companies do not give false assurance to investors or raise unnecessary concerns.
• It is supportive of investors having additional and better information about the quality of an audit. However, the AQRs’ work is focussed on the audit and is not designed to comment on the contents of the report and accounts.  It also generally covers only selected aspects of the audit and is not designed to confirm the audit opinion.
• Where a company’s audit has been reviewed by the AQR, the Audit Committee should consider whether any of the findings are significant for the purposes of putting together their report on how they have assessed the effectiveness of the audit process (as required by the Code) and, if so, make appropriate disclosures.  The FRC would expect audit committees to discuss the findings with their auditors as part of this process.
• In making their report, Audit Committees should not disclose the inspection grade.  The FRC is concerned that the publication of this could be misleading, as the current grading system was designed to help audit committees understand the significance of the issues identified and not intended to provide an assessment of the reliability of the financial statements as a whole or the audit opinion.

In line with this advice, the FRC has stated that it will waive its confidentiality rights to the information, other than the grade awarded to the audit, contained in the AQR reports for the sole purpose of allowing the company and its auditor (who also has confidentiality rights) to determine how and what information arising from the inspection is reported to shareholders.

The full statement can be obtained from the FRC website.

Topics discussed were:

• Overview of current and future activities
  Activities in the next six months will mainly focus on taxonomy updates for new standards, additional common practice and translations of element labels, trials of the IFRS Taxonomy due process, review of the licensing terms, continued work on the IFRS Taxonomy jurisdictional profiles, and additional education material.
• Use of the IFRS Taxonomy
  The staff plans to publish a new set of materials covering how to best use the IFRS Taxonomy.
• Management of entity-specific disclosures
  The staff is assessing whether amendments to the IFRS Taxonomy or supporting materials can be made that would result in better handling of entity specific disclosures.
• Content review
  The ITCG reviewed proposed amendments to the IFRS Taxonomy in connection with the disclosure initative exposure draft expected to tbe published soon as well as changes to the IFRS Taxonomy resulting from amendments to IFRS 9 and related amendments to IFRS 7.
• Common practice
  The ITCG members discussed the 2014 Common Practice project, especially common elements that do not fit into the IFRS Taxonomy structure and general or specific elements and undefined terms.
• Use of the Versioning 1.0 Specification
  The staff reported that specific Versioning 1.0 Specification functionalities such as ‘assignment categories’ and ‘versioning dimensions’ are currently not being used within the IFRS Taxonomy and asked members of the ITCG for their views on the costs and benefits of new functionalities.
• Updates from ITCG members and observers
  There were reports from ESMA, the SEC, the FASB and on developments in South America, China and Indonesia.

Please click for access to the meeting notes on the IASB website.

There will be a presentation of tips for the coming reporting season based on the FRC's recently published Corporate Reporting Review Annual Report 2014.