In particular, the outreach event will focus on the following questions:

• “Is there a need for a special standard for rate-regulated activities?
• Should balances arising out of rate-regulated activities be included in the balance sheet or is note disclosure a better way forward?
• How is the performance of rate-regulated activities best reflected?
• What corrections/adjustments are analysts making to the financial statements of companies with rate-regulated activities?”

Registration for this event is requested by 12 December 2014.

For more information, see the press release on the EFRAG website.

As stated in the Terms of Reference, “[a]ll aspects of ASAF and its operations shall be reviewed by the IFRS Foundation two years after the establishment of the group (as from the date of signing the Memorandum of Understanding (MOU)).” The questionnaire is the first step in assessing how the ASAF has performed in relation to its Terms of Reference and Memorandum of Understanding.

The IFRSF expects to publish a feedback statement detailing the findings and actions from the review after the Trustees and IASB have had time to consider the findings. It is expected to be issued mid-2015. Participants are requested to complete the questionnaire by 9 January 2015.

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

In July, the FCA consulted on proposals to remove mandatory quarterly reporting for companies covered by the DTR. The majority of respondents to the consultation were in favour of the FCA's proposals and so the FCA has now implemented this change through the publication of PS14/15.  At the moment the removal of the requirement for IMSs is only effective for issuers of shares admitted to trading on a regulated market where the UK acts as home Member State and the FCA’s DTRs apply.  Other issuers will have to wait until November 2015 when the revised EU transparency directive, which is the enabling legislation for this change, will be fully implemented on a pan-European basis.

At a detailed level, the amendments to the DTR:

• Remove the requirements in DTR 4.3 completely
• Remove DTR 4.4.6R and DTR 6.3.5R(3)(C) which will become obsolete
• Make consequential amendments to other rules in the DTR that refer to IMSs.

The press release and full policy statement can be downloaded from the FCA website.

In the response to the European Commission's questionnaire, ESMA agrees with most respondents that the adoption of IFRSs has made companies' financial statements in the EU significantly more transparent and comparable and was over all beneficial. ESMA states that continuous commitment to the use of IFRS is the most appropriate approach in the context of global markets and a growing use of IFRS around the world.

However, ESMA remains critical of the EFRAG reform and maintains that the responsibility for giving endorsement advice to the European Commission "can only be entrusted to a public body that has the duty to protect the public interest". The Maystadt report had originally recommended that the new EFRAG Board should consist of three pillars with one of them being European public institutions (ESMA, EBA, EIOPA and ECB). However, given that they believe that endorsement advice should entirely rest with public institutions, the European Supervisory Authorities and the ECB have declined full membership and will only be observers on the new Board.

ESMA also disagrees with many respondents in believing that two new endorsement criteria (that any accounting standards adopted should not jeopardise the EU's financial stability and that they must not hinder the EU's economic development) should be added to the IAS Regulation. Again, ESMA argues from a public interest and public good perspective. ESMA also adds that in pre-consultation with national enforcers, some proposed a specific consideration of transparency as part of the endorsement criteria.

Please click to download the full response (link to ESMA website). The endorsement mechanism and criteria are subject of questions 21 and 22.

The newsletter “Setting the Standard” covers the following key areas: 

• A review of recent European developments, including an overview of the process for EU adoption of IFRSs, the transformation of EFRAG and the European Commission's current review of the IAS Regulation.
• Current activity around the 'Clear and concise' initiative. The newsletter highlights the recently published guidance on the preparation of a Strategic Report ‘Guidance on the Strategic Report’ and discusses some of the barriers in this area, such as disclosure requirements introduced through regulation.
• The FRC’s contribution to the International Accounting Standard Board’s (IASB’s) work to develop improvements to IAS 7 Statement of Cash Flows, the new leasing standard and the IASB Disclosure Initiative.
• Recent activity of the Financial Reporting Lab including the publication of the report 'Towards Clear and Concise Reporting' and of the annual reminders for the 2014 reporting season.
• The issuance of the consultation document Accounting standards for small entities: Implementation of the EU Accounting Directive. The newsletter highlights that, under the new regime, which is expected to be effective for accounting periods beginning on or after 1 January 2016, small entities will be included within the scope of FRS 102, with a new Section 1A Small Entities setting out the presentation and disclosure requirements that apply to them.
• The release of XBRL Accounts Taxonomies for FRS 101, FRS 102 and full EU-adopted IFRS. 
• The publication of the findings of the Conduct Committee's Corporate Reporting Review. The newsletter highlights that generally, and particularly for larger public companies, the quality of reporting is good, but a number of areas for improvement have been identified.
• A brief biography of two of the current members of the Accounting Council.

Please click here for the full newsletter on the FRC website.

The reform of the GRI structure, which will be implemented by 31 January 2015, has six main objectives:

• Standard-setting activities and all other organisational activities are to be strictly separated.
• The global multi-stakeholder principle is to be kept.
• The due process for standards development is to be strengthened.
• An independent public funding base for GRI's standard-setting activities is to be established (separate from the funding of other organisational activities).
• All meeting agendas, papers and minutes are to be made available on the website.
• A separate governance structure for standard-setting is to be implemented.

The separate governance structure to be implemeted will include three new bodies. The Global Sustainability Standards Board (GSSB) will develop and approve the Sustainability Reporting Standards; the Due Process Oversight Committee (DPOC) will safeguard the application of the due process protocol; the Independent Appointments Committee (IAC) will appoint qualified, independent individuals to the GSSB and DPOC.

Please click for more information in the press release on the GRI website.

Among the proposals are:

• Restructuring the code to more clearly distinguish requirements from guidance;
• reorganising the content of the code, including rebranding the code, or parts thereof, as international standards;
• identifying responsibility for compliance with the code in particular circumstances; and
• simplifying the wording of the Code so that it can be more readily understood.

The proposals are open for comment until 4 February 2015. The consultation paper can be accessed through the press release on the IFAC website.

In comparison with earlier surveys of research into the effects of IFRS adoption, the new report expressly addresses the objectives of the IAS Regulation, its scope is restricted, as far as possible, to evidence from the EU, and it excludes, as far as possible, the literature on the effects of voluntary IFRS adoption in the EU. It reviews the research for evidence in respect of transparency, comparability, the cost of capital, market liquidity, corporate investment efficiency, cross-border investment, other benefits, costs, and the financial crisis.

The report finds that there is evidence of benefits following IFRS adoption in relation to financial reporting transparency and comparability, the cost of capital, market liquidity, corporate investment efficiency and cross-border capital flows. However, the report also states that the evidence on some of these matters is disputed and it is unclear how far the benefits identified are attributable to the adoption of IFRS or to other concurrent institutional changes, particularly in enforcement. The report also notes that the benefits found are uneven, varying with the institutions and incentives that apply for different companies in different countries.

The report also identifies a number of challenges to IFRS. Among the challenges that apply to any set of financial reporting standards are the importance of surrounding institutions and preparers' incentives, the role of options in standards, the effects of principles-based standards, and the one-size-fits-all problem. Challenges that apply specifically to IFRS are identified as the role of fair value accounting and the priority given to the valuation role of accounting.

As the report was drawn up in response to the European Commission's consultation on the impact IFRSs in the EU, it also contains a conclusion for policy makers and the way forward:

For policy makers, the research findings summarised in this report will not end controversy on the effects of IFRS adoption in the EU, but they should help to form views on what has been achieved to date and what needs to be done in the future. Perhaps the most significant point to emerge from the research is the importance of institutions and incentives. The balance of evidence suggests that the objectives of Regulation 1606/2002 have been achieved to some extent. But differing institutions and incentives mean that its effects vary from firm to firm and from country to country. [...] If the EU wishes to achieve further progress in financial reporting and to reap the benefit of these improvements, it may make most sense to look at the incentives for those involved in the financial reporting process and at the institutions that surround it [...].

The report detailing the research results is available on the ICAEW website. It can be accessed in a seven page executive summary or in the 164 page full report.

The key points made in the ICAEW's response to the EC consultation, which is also available from their website, are:

• The ICAEW believe that the current goals of the IAS regulation continue to be appropriate.  However, they believe there is a strong case that the scope of the IAS regulation should be amended to mandate application of IFRSs by listed companies that are not required to prepare consolidated accounts, in order to aid further achievement of these goals.
• They believe that the adoption of IFRSs has had a positive impact on EU capital markets.
• They believe that the current endorsement process is broadly appropriate, although it should be possible to expedite the process through earlier and more engagement between key European stakeholders and the IASB.  They strongly oppose the introduction of proposed new endorsement criteria that accounting standards should not hinder economic development or endanger financial stability, as they believe that (to the extent relevant) this falls within the current requirement to consider the 'European public interest'.  They also believe that the risks of giving the European Commission more leeway to modify standards as part of the endorsement process far outweigh any potential benefits.
• They believe that the current EU enforcement model is appropriate and that it would not be desirable to enhance the role or powers of the European Securities and Markets Authority (ESMA) at the expense of member states.  They also believe that the EU should leave the provision of guidance on the application of IFRS to the IFRS Foundation.

In their response the ICAEW also welcome the UK Financial Reporting Council's recently announced initiative to address the causes of variable quality in IFRS reporting by smaller UK listed companies.

In an opening statement before commenting directly on the IOSCO proposals, FEE expresses support for improvements in corporate reporting and stresses that non-GAAP measures play an important role as they can improve the communication between the entity and its stakeholders as long as they are reported in a transparent and unbiased manner. Nevertheless, FEE "identifies that there is a lack of coordination between market oversight bodies and regulators on one hand and the IASB on the other hand, which leads to a high degree of divergence in practice. FEE expressly references the ESMA consultation on alternative performance measures, but recently also the IFAC has issued guidance on supplementary financial measures. FEE states:

We believe that the International Accounting Standards Board (“IASB”) should also be involved in the reporting of Non-GAAP Measures in the context of financial reporting. Some IFRSs currently include guidance on how an entity can present Non-GAAP Measures within its financial statements. Therefore, [...] FEE suggests all the market oversight bodies and regulators (international, regional and national) to work with the IASB in order to develop a common comprehensive framework on Alternative Performance Measures/Non-GAAP measures.

The IASB has a disclosure initiative on its agenda that is split into several smaller projects. The project on principles of disclosure considers information that should be included in a complete set of financial statements and the presentation of non-IFRS information and comparative information. A discussion paper is currently expected in the second quarter of 2015. 

Please click for the FEE comment letter, which also contains detailed comments on the IOSCO proposals, on the FEE website.