This site uses cookies to provide you with a more responsive and personalised service. By using this site you agree to our use of cookies. Please read our cookie notice for more information on the cookies we use and how to delete or block them.
The full functionality of our site is not supported on your browser version, or you may have 'compatibility mode' selected. Please turn off compatibility mode, upgrade your browser to at least Internet Explorer 9, or try using another browser such as Google Chrome or Mozilla Firefox.


IESBA proposes update to ethics code for professional accountants in business

26 Nov 2014

The International Ethics Standards Board for Accountants (IESBA) has issued an exposure draft of proposed changes to the 'Code of Ethics for Professional Accountants' (the Code). The proposals focus on the requirements of professional accountants in business involved in the presentation of financial and non-financial information, and also provide guidance on dealing with pressure from superiors and other to engage in unethical or illegal acts.

The exposure draft, Proposed Changes to Part C of the Code Addressing Presentation of Information and Pressure to Breach the Fundamental Principles, is focused on accountants who work on their own or in organisations other than public accounting practices, such as in commerce, industry, education, and the public and not-for-profit sectors. The exposure draft addresses key priorities for such accountants contained in Part C of the Code, which were identified through a consultation process involving working groups, the International Federation of Accountants (IFAC) Professional Accountants in Business Committee (PAIB), IFAC member bodies and the IESBA Consultative Advisory Group (CAG).

The key proposals include:

  • Widening the scope of the existing requirements around the preparation and reporting of information to reduce the emphasis on external financial information, and instead focus on both financial and non-financial information for both internal and external purposes. This would mean that the requirements of the Code for information to be prepared "fairly and honestly" would apply consistently to all information produced by a PAIB. Examples provided in the exposure draft of information captured include operating and performance reports, budged and forecasts, information provided to internal and external auditors, risk analyses, general and special purpose financial statements, tax returns and regulatory reports
  • Providing additional guidance around the "fair and honest" principle when preparing financial and non-financial information, including:
    • Preparing or presenting information in a manner that is intended neither to mislead nor influence contractual or regulatory outcomes inappropriately
    • Not omitting information with the intention of rendering the information misleading
    • Presenting the information in accordance with a relevant reporting framework where applicable (this is currently a separate requirement of the Code, but is proposed to be repurposed as guidance on applying the "fair and honest" principle)
  • In relation to the "fair and honest" preparation and presentation of financial information, to introduce additional guidance that a PAIB should not exercise judgements and discretion available under the applicable financial reporting framework in a manner that is intended to mislead, including when determining estimates, selecting a particular accounting method among two or more alternatives, determining the structuring of transactions and determining disclosures
  • Proposing a new section of the Code to provide more robust and practical guidance on how a PAIB should respond when facing pressure from a superior or others that may result in a breach of the fundamental principles of the Code. The new section would introduce a explicit requirements for a PAIB not to allow pressure to result in a breach of the fundamental principles, and to prohibit a PAIB from placing pressure on others that would result in such a breach.

The exposure draft is open for comment until 15 April 2015. Click for IESBA press release (link to IFAC website).

November 2014 IASB meeting notes — Part 2

25 Nov 2014

The International Accounting Standards Board (IASB) met at its offices in London on 19-20 November 2014. We have now posted the Deloitte observer notes from Wednesday's session on insurance contracts. Additional notes will be posted in due course.

Click through for direct access to the notes:

Wednes­day, 19 November 2014

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

We comment on a number of tentative agenda decisions of the IFRS Interpretations Committee

25 Nov 2014

We have published our comment letters on IFRS Interpretations Committee agenda decisions on IAS 28, IAS 39, IFRS 12, IFRS 13, and IFRIC 21, as published in the September IFRIC Update.

More in­for­ma­tion about the issues is set out below:

IssueMore information

IAS 28 Investments in Associates and Joint Ventures — Fund manager’s significant influence over a fund

IAS 39 Financial Instruments: Recognition and Measurement — Accounting for embedded foreign currency derivatives in host contracts

IFRS 12 Disclosure of Interests in Other Entities — Disclosures for a subsidiary with a material non-controlling interest and for a material joint venture or associate

IFRS 13 Fair Value Measurement — The fair value hierarchy when third-party consensus prices are used

IFRIC 21 Levies — Levies raised on production property, plant and equipment

You can access all our comment letters to the IASB, IFRS Foun­da­tion, and IFRS In­ter­pre­ta­tions Com­mit­tee here.

BIS consults on draft guidance for country-by-country reporting by extractive industries

25 Nov 2014

The Department for Business, Innovation and Skills (BIS) has today published draft guidance to help extractive industries meet the requirements for country-by-country reporting introduced by Chapter 10 of the EU Accounting Directive (Directive 2013/34/EU) and changes made by Directive 2013/50/EU to the Transparency Directive (2004/109/EC) (“the draft guidance”).

Chapter 10 of the EU Accounting Directive (Directive 2013/34/EU (link to European Commission website)) (and changes made by Directive 2013/50/EU (link to the European Commission website) to the Transparency Directive (2004/109/EC)) require extractive companies – those in mining, oil and gas sectors, as well as those who log primary forests – to prepare a report on a project-by-project basis of all payments to governments (including, but not restricted to, licence fees, taxes and royalties). Parent companies must prepare a report for the group which they head; subsidiaries are exempt if they are part of a larger EEA incorporated group which publishes a consolidated report including their payments. 

In the UK, BIS confirmed in August 2014 that Regulations (‘The Reports on Payments to Governments Regulations 2014’) will be laid before parliament detailing how the country-by-country reporting requirements will be implemented in the UK.  The Regulations will require extractives companies to prepare and file country-by-country reporting for financial years commencing on or after 1 January 2015, a year in advance of the EU deadline.

The draft guidance, which has been developed by industry associations, is intended to “help companies engaged in oil and gas, mining and logging of primary forest activities meet the requirements of the UK Regulations”.  It is not intended to be a binding set of rules.

The draft guidance will assist with answering the following:

Which entities are under an obligation to prepare and deliver a report?

Does every entity have to prepare a report or can a consolidated report be prepared for a group?

Are any entities exempted from preparing reports under the UK Regulations?

What are the reporting requirements for entities that are subject to equivalent disclosure regimes?

Do the reports only cover payments made by the entities that have to prepare reports or do the reports cover payments made by other group entities?

Which business activities are within the scope of the UK Regulations?

Which types of payment have to be included in the report?

Who has the obligation to include payment information in a report in situations where a payment is made on behalf of multiple parties?

Which government entities that receive payments have to be covered in the reports?

How should payments be attributed to projects?

When and how should reports be delivered?

Comments are invited on the draft guidance until 17 December 2014.

Please click for:

IASB proposes amendments to IFRS 2 to clarify the classification and measurement of share-based payment transactions

25 Nov 2014

The International Accounting Standards Board (IASB) has published an Exposure Draft (ED) of proposed amendments to IFRS 2 'Share-based Payment' that would clarify the classification and measurement of share-based payment transactions. The ED addresses several requests the IASB and the IFRS Interpretations Committee received and the IASB decided to deal with in one combined narrow-scope project. Comments are requested by 25 March 2015.


The IASB and the IFRS Interpretations Committee received a number of requests related to IFRS 2 Share-based Payment. Respondents asked for clarification on:

  • the accounting for cash-settled share-based payment transactions that include a performance condition;
  • the classification of share-based payment transactions with net settlement features; and
  • the accounting for modifications of share-based payment transactions from cash-settled to equity-settled.

After debating the issues in earlier meetings, the IASB decided in April 2014 to address them together in one narrow-scope project.

Suggested changes

ED/2014/5 Classification and measurement of share-based payment transactions proposes the following clarifications and amendments regarding the issues:

Accounting for cash-settled share-based payment transactions that include a performance condition

IFRS 2 currently contains no guidance on how vesting conditions affect the fair value of liabilities for cash-settled share-based payments. The IASB proposes to clarify that the accounting in the case of cash-settled share-based payments should follow the same approach as used for equity-settled share-based payments.

Classification of share-based payment transactions with net settlement features

The IASB proposes to include an exception into IFRS 2 so that a share-based payment where the entity settles the share-based payment arrangement net whould be classified as equity-settled in its entirety provided the share-based payment would have been classified as equity-settled had it not included the net settlement feature.

Accounting for modifications of share-based payment transactions from cash-settled to equity-settled

IFRS 2 currently does not specifically address situations where a cash-settled share-based payment changes to an equity-settled share-based payment because of modifications of the terms and conditions. The IASB proposes the following amendments:

  • On such modifications, the original liability recognised in respect of the cash-settled share-based payment is derecognised and the equity-settled share-based payment is recognised at the modification date fair value to the extent services have been rendered up to the modification date.
  • Any difference between the carrying amount of the liability as at the modification date and the amount recognised in equity at the same date would be recognised in profit and loss immediately.

Effective date and transition requirements

The ED does not contain a proposed effective date but states that earlier application would be permitted. The amendments would be applied prospectively. However, retrospective application would also be permitted if an entity has all necessary information and if the information is available without the use of hindsight.

Additional information

ED/2014/5 is open for comment until 25 March 2015. Please click for:

IASB issues work plan update for November 2014

24 Nov 2014

Following its November meeting, the International Accounting Standards Board (IASB) has updated its work plan. The revised plan adds a target date for amendments to IFRS for SMEs (Q1 2015) and a timeframe for the comment letter analysis (Q1 2015) on the discussion paper on macro hedging. Further, the IASB now expects to issue an exposure draft on the elimination of gains or losses arising from transactions between an entity and its associate or joint venture in Q1 2015 (previously Q4 2014). Lastly, it includes updates to the expected timing of board discussions for the short-term research projects on business combinations under common control (Q1 2015), discount rate (Q1 2015), emissions trading scheme (Q4 2014 through Q1 2015), equity method (Q4 2014 through Q2 2015), and financial instruments with characteristics of equity (Q4 2014), as well as, long-term research project on post-employment benefits (Q1 and Q2 2015).

Current status

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

Project Current status Next project step Expected timing

Con­cep­tual Frame­work — Com­pre­hen­sive IASB project


Exposure draft

Q1 2015

Fi­nan­cial in­stru­ments — Macro hedge accounting

Dis­cus­sion paper

Comment letter analysis

Q1 2015*

In­sur­ance con­tracts



Q4 2014



Target IFRS

H2 2015

Dis­clo­sure ini­tia­tive — Prin­ci­ples of dis­clo­sure

Board dis­cus­sion

Targeted Dis­cus­sion Paper

Q2 2015

Dis­clo­sure ini­tia­tive — Amend­ments to IAS 1

Exposure draft

Target IFRS

Q4 2014

Dis­clo­sure ini­tia­tive — Rec­on­cil­i­a­tion of li­a­bil­i­ties from fi­nanc­ing ac­tiv­i­ties


Exposure draft

Q4 2014

IFRS for SMEs — Com­pre­hen­sive review


Target IFRS

Q1 2015*

Rate-reg­u­lated ac­tiv­i­ties

Dis­cus­sion paper

Public con­sul­ta­tion

Q4 2014 and Q1 2015

* 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.

November 2014 IFRS Interpretations Committee meeting notes — Part 3 (concluded)

24 Nov 2014

The IFRS Interpretations Committee met in London on 11 November 2014. We've posted the Deloitte observer notes for the sessions on IAS 12, IAS 19, IFRS 5, and IFRS 11.

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


ESMA comment letters on the IFRS Interpretations Committee tentative agenda decisions on IFRS 12 and IFRIC 21

24 Nov 2014

The European Securities and Markets Authority (ESMA) has published two comment letters referring to tentative agenda decisions taken by the IFRS Interpretations Committee (IFRS IC).

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.

November 2014 IASB meeting notes — Part 1

21 Nov 2014

The International Accounting Standards Board (IASB) met at its offices in London on 19-20 November 2014. We have now posted the Deloitte observer notes from Wednesday's session on IFRS for SMEs as well as Thursday's session on leases. Additional notes will be posted in due course.

Click through for direct access to the notes:

Wednesday, 19 November 2014

Thursday, 20 November 2014

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

IFRS Foundation updates its IFRS Research Centre site

21 Nov 2014

The IFRS Foundation has announced a revamp of its IFRS Research Centre web pages. The updates to the site include a more intuitive layout and new content for evidence-supported standard-setting, research opportunities, research impact, and news and events.

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.

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.