June

ICAEW comment letter on proposed amendments to IAS 1

16 Jun, 2015

The Institute of Chartered Accountants in England and Wales (ICAEW) has published its comment letter on the International Accounting Standards Board's (IASB’s) Exposure Draft ED/2015/1 'Classification of Liabilities: proposed amendments to IAS 1'.

The proposed amendments aim at a more general approach to the classification of liabilities under IAS 1 based on the contractual arrangements in place at the reporting date.
 
The ICAEW are supportive of the IASB’s decision to clarify the criteria for classifying a liability as either current or non-current.  However the ICAEW expresses concern that the proposals, as drafted, are not clear and might cause continued uncertainty in this area or might create further confusion.

Further comments and a full response to all questions raised in the invitation to comment are contained within the full comment letter which is available on the ICAEW website.

ESMA publishes its 2014 annual report and new strategy

15 Jun, 2015

The European Securities and Markets Authority (ESMA) has published its Annual Report for 2014, which describes key accomplishments by the ESMA in 2014. In addition, it has published its strategy for 2016-2020.

The most noted actions of the ESMA in 2014 were:

  • Financial reporting and con­ver­gence of IFRS en­force­ment ac­tiv­i­ties.
  • Review of accounting practices related to business combinations.
  • Contribution to the development of IFRS.

In its strategy for 2016-2020, the ESMA will focus on three key objectives:

  • Investor protection.
  • Orderly markets.
  • Financial stability.

To achieve these objectives, ESMA intends to increase resources to strengthen (1) its capabilities of identifying and assessing risks to investors and (2) the financial stability in the EU. ESMA will also commit more resources to promote supervisory convergence and target a number of specific areas where convergence is to be promoted. Finally, ESMA aims to continue to strengthen its role as a direct supervisor, whilst intensifying its risk-based approach in order to achieve lasting impact. Overall, the enforcement process is to become more effective and efficient.

For more information, see the 2014 Annual Report and the strategy for 2016-2020 on the ESMA’s website.

June 2015 IASB meeting agenda posted

12 Jun, 2015

The IASB will meet at its offices in London on 22-25 June 2015. Part of the meeting will be held jointly with the Financial Accounting Standards Board (FASB) to discuss revenue recognition. Additionally, the IASB will discuss insurance contracts; IFRS implementation issues; financial instruments with characteristics of equity; the disclosure initiative; equity method; dynamic risk management; provisions and contingent liabilities (IAS 37); pollutant pricing mechanisms; and revenue.

The full agenda for the meeting can be found here. We will post any updates to the agenda, as well as our De­loitte ob­server notes from the meeting, on this page as they become avail­able.

Update (16 June): The IASB has amended its agenda to remove the discussions on dynamic risk management and provisions and contingent liabilities research project. These projects have been deferred to the July meeting.

FRC issues revised illustrative auditor’s reports

12 Jun, 2015

The Financial Reporting Council (FRC) has today published eight revised illustrative auditor’s reports reflecting developments in UK financial reporting.

The illustrative reports are attached as an appendix to the FRC’s Bulletin 4: Recent Developments in Company Law, The Listing Rules and Auditing Standards that affect United Kingdom Auditor’s Reports which was published in April 2014.

Specifically the illustrative auditor’s reports reflect changes resulting from:

 The updated Bulletin is available on the FRC website.

Agenda published for the June 2015 IFRS Foundation Trustees meeting

12 Jun, 2015

The agenda for the public session of the upcoming meeting of the IFRS Foundation Trustees is now available. The Trustees will meet on 18 and 19 June 2015 in London, however, only the meeting on 19 June is open to the public.

The agenda for the public session of the meeting is summarised below:

Friday, 19 June 2015

IFRS Foundation Trustees meeting (15:15–16:15 BST)

  • Report of the Chair of the IFRS Foundation Trustees
  • Report of the IASB Chair
    • Technical work plan overview
    • Agenda Consultation
    • Engagement strategy
    • Use of IFRS globally
    • Consistency in the application of IFRS globally
    • Education Initiative
  • Report of the Due Process Oversight Committee
    • Technical Activities
    • IFRS Taxonomy
    • Annual review of consultative groups
    • Reporting Protocol
    • Correspondence

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

CDSB publishes framework for reporting environmental information and natural capital

12 Jun, 2015

The Climate Disclosures Standards Board (CDSB) has published a framework for the reporting of environmental information and natural capital in mainstream reports such as the annual report.

The framework has been published to assist companies to prepare and present environmental information in mainstream reports that links the company’s environmental performance with its overall strategy, performance and prospects and is useful to investors in making decisions in their capacity as capital providers.  It is hoped that through the provision of this environmental information it will enable and encourage investor decision making on the allocation of financial capital to activity that supports environmental protection.

Additionally the framework seeks to:

  • Standardise the way that environmental information is reported in mainstream reports ensuring that it is clear, concise and comparable across companies.
  • Add value to the existing mainstream report for the benefit of investors.
  • Support compliance with other regulatory and reporting requirements such as the EU Directive on disclosure of non-financial and diversity information

The framework contains the following areas:

  • Guiding principles.  These have been designed to ensure, among other things, the environmental information reported in the mainstream reports is useful to investors, correct and complete.  These are to be applied in preparing and presenting the environmental information.
  • Reporting requirements.  This sets out the type of environmental information that should be reported in mainstream reports.  This includes requirements around areas such as the company’s environmental policies and strategy, the company’s environmental results and performance and the way in which environmental information is prepared and presented. 

The press release and the framework are available on the CDSB website.

IASB issues 'Investor Perspectives' on prudence

11 Jun, 2015

The International Accounting Standards Board (IASB) has released a new edition in its 'Investor Perspectives' series. In this edition, IASB member Steve Cooper discusses the concept of prudence.

On 28 May 2015, the IASB issued an exposure draft on the conceptual framework, which reintroduced an explicit reference to prudence and states that the exercise of prudence supports neutrality. Mr Cooper discussed how issues with the pre-2010 definition of prudence was created uncertainty in practice and noted that the proposed definition provides more clarity into the approach intended by the IASB.

For more in­for­ma­tion, see the June 2015 edition of the Investor Per­spec­tives newslet­ter on the IASB’s website.

FRC meeting on the European endorsement of IFRS 9

11 Jun, 2015

The Financial Reporting Council (FRC) will be holding a meeting on 22 June 2015 to discuss the European endorsement of IFRS 9 'Financial Instruments'.

The objective of the event is to consider the key issues raised in the European Financial Reporting Advisory Group (EFRAG) draft endorsement advice on IFRS 9 published in May 2015.

The event will help inform the FRC response to EFRAG and the European Commission.  Participants will also be able to share their responses with the International Accounting Standards Board and representatives of EFRAG.

More information, including how to attend the event can be found on the FRC website.

Acting EFRAG Board President confirmed

11 Jun, 2015

On 8 June, the EFRAG General Assembly welcomed the continuation of Roger Marshall as acting EFRAG Board President until a permanent President is appointed.

The European Commission had originally nominated Mr Wolf Klinz as President of the Board of the European Financial Reporting Advisory Group (EFRAG), however, due to ill health Mr Klinz decided in May 2015 not to accept the EFRAG Presidency.

The EFRAG General Assembly also approved the membership of Alphonse Kugeler of CNC Luxembourg to the EFRAG Board. Please click for the press release on the EFRAG website.

European Commission releases responses to the Green Paper 'Building a Capital Markets Union'

11 Jun, 2015

In February 2015 the European Commission (EC) launched a public consultation as part of its project to boost growth in the EU with the creation of a single market for capital and break down the barriers that are blocking cross-border investments in the EU and preventing businesses from getting access to finance.

One of the questions (Question eight) had been whether there is value in developing a common EU level accounting standard for small and medium-sized entities (SMEs). From the responses made available, three options seem to emerge:

  • an IFRS-based solution, perhaps with simplification in presentation and disclosure;
  • using the IFRS for SMEs as a basis for an EU solution;
  • not making any changes as member states already have the option to permit the use of IFRSs for their SMEs.

Generally, a freestanding EU solution found little support.

In its response to the consultation, the IFRS Foundation had emphasised its willingness to work with the EC in considering the financial reporting implications of the CMU.

Please click to access all responses on the EC website (scroll to the right for responses to question eight). A summary of responses will be published at a later stage along with an action plan in September 2015.

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