The discussion paper indicates that companies report on how they make use of financial and natural capital but “in contrast, the use of human capital is minimally reported on and can only be partially found in financial statements”.

The aim of the discussion paper is to “initiate a discussion on how companies can better articulate how their human assets drive their strategy, contribute to growth and are aligned with the creation of long-term shareholder value”.

Although there are various ways that a company can report workforce matters, such as through narrative reporting, Integrated Reporting and as a result of the EU Directive on non-financial reporting, the discussion paper indicates that companies should be disclosing more with regards to human capital matters and the link to the long-term strategy of the company.

The discussion paper suggests that disclosures could be improved in four areas:

• The composition of the workforce - who constitutes the workforce? How is it composed? Is the employment model sustainable?
• The stability of the workforce - what are the turnover figures? Is talent being undesirably lost?
• The skills and capabilities of the workforce - what investment is made in training and development? Are the talents of the workforce being maximised and productivity gains being achieved?
• Employee motivation - is there a positive culture? Is the workforce motivated? Are the employees’ advocates for the business?

The NAPF invite responses from companies and investors as well as from other interested parties including policy makers and standard setters.  It intends to host a series of roundtable events later in the year and will incorporate specific principles into the latest set of its Corporate Governance Policy and Voting Guidelines.

The press release and discussion paper are available on the NAPF website.

The handbook (338 pages) contains the entire Code of Ethics for Professional Accountants. It replaces the 2014 edition of the IESBA Handbook.

You can access the mobile-optimised and fully searchable web-based version of the handbook for personal use free of charge or purchase print copies on the IFAC website.

In its response to the draft endorsement advice published in May 2015, FEE agrees with the conclusion that adoption of IFRS 9 is conducive to the European public good and states that "given the improvements in reporting mandated by IFRS 9 we would welcome its swift adoption".

The principal comment in the comment letter FEE has submitted, however, relates to the potential deferral of IFRS 9 for insurance business activities while the IASB finalises its forthcoming insurance standard. The letter states:

We agree with EFRAG that the European Commission should ask the IASB to defer the effective date of application of IFRS 9 for institutions with significant insurance activities, or alternatively identify and assess any other workable solutions to address accounting mismatches that may obscure performance reporting by those institutions. FEE stresses the importance of having an international solution for this matter. A Europe-only deferral would de facto be a carve-out from full IFRS, which in our view should generally be avoided as they do not come without consequences.

FEE also states that any deferral of IFRS 9 should be limited in duration and optional.

Please click to access the full comment letter on the FEE website.

The agenda for the meeting is sum­marised below:

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

The composition, which is effective immediately, consists of the following:

• Africa region:
  • Financial Reporting Council of South Africa.
• Asia-Oceania region:
  • Asian-Oceanian Standard-Setters Group.
  • Accounting Standards Board of Japan.
  • Australian Accounting Standards Board working with the New Zealand Accounting Standards Board.
  • China Accounting Standards Committee.
• European region:
  • European Financial Reporting Group.
  • Accounting Standards Committee of Germany.
  • Autorité des normes comptables.
  • Organismo Italiano di Contabilità.
• Americas region:
  • Group of Latin American Accounting Standard Setters.
  • Canadian Accounting Standards Board.
  • Financial Accounting Standards Board.

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

The conference will bring together investors, industry leaders, companies, asset managers, auditors and regulators to consider the opportunities and threats from a European Capital Markets Union and how corporate governance and stewardship can be enhanced in Europe to facilitate efficient capital movements.

Speakers will consider key issues including whether the Capital Markets Union has the right focus, how the City can take advantage of a deeper and more diversified financial system in Europe, the risks of a unified European capital market, how it could complement the banking system in Europe, challenges for cross border stewardship and what the UK experience in developing its capital markets has to offer Member States.

The conference will be streamed live on the FRC’s website.

*Update 30 June 2015 - the transcript of a speech by Martin Wheatley, FCA Chief Executive, highlighting priorities for policy makers on the Capital Markets Union is available on the FRC website*

The register, (a ‘Person with significant control (PSC) register’) was included within the Small Business, Enterprise and Employment Bill which received Royal Assent in April 2015. 

UK companies will be required to keep a PSC register of people with significant control over the company (those individuals who own or controls more than 25 per cent of a company’s shares or voting rights or who otherwise exercises control over a company or its management).  The PSC register will need to include details on the individuals including name, date of birth, nationality, address and details of their interest in the company.  Companies will be required to keep the PSC register up to date. 

BIS intends that all companies will hold their own PSC register from January 2016 and from April 2016 they will need to give this information to Companies House when they deliver their confirmation statement (which replaces the annual return). 

BIS previously consulted on how to implement these requirements and what guidance would be required to help companies and others understand and comply with them.  It is now consulting further on the draft secondary regulations needed to set up the register including:

• the companies that should be included in the register;
• how to classify people’s different levels of control of a company;
• the fees companies can charge for making their own registers publicly available;
• how to protect information about people if they are at serious risk of harm; and  
• issuing warning and restrictions notices to people or entities that don’t respond to the initial notice requesting information for the register. 

Comments are invited until 17 July 2015. 

BIS intend to use the responses received to help it finalise the draft regulations which it expects will be laid before Parliament in autumn 2015. 

Click for:

• Press release (link to BIS website).
• Full consultation (link to BIS website).
• Our previous UK Accounting Plus news item on the initial BIS consultation on the PSC register.

On 10 February 2015, the IASB issued ED/2015/1 Classification of Liabilities (Proposed amendments to IAS 1). The main objectives of the proposal are to (1) clarify that the classification of liabilities as current or non-current should be based on rights that are in existence at the end of the reporting period, (2) make the link clear between the settlement of a liability and the outflow of resources from an entity, and (3) reorganise the guidance in IAS 1 with respect to classification of liabilities as current or non-current.

In its comment letter, EFRAG supports the proposed amendments as they clarify the existing requirements in IAS 1 that only rights in existence as of the reporting date should be considered when determining the appropriate classification of liabilities. However, to avoid further diversity in practice, EFRAG recommends that additional guidance is provided in situations where the rights to defer settlement of a liability are subject to conditions that are assessed after the reporting period, and in situations where liabilities can settled through the issuance of shares at the option of the counterparty.

For more information, see the press release and final comment letter on the EFRAG’s website.

The guidance has been developed by a working group including representatives from the Big Four accounting firms, investors, preparers, audit committees and internal auditors.  The working group considered whether it was possible to extend the assurance provided over KPIs included within an annual report and what guidance was required in order to help audit committees and boards achieve this. 

The guidance therefore seeks to assist audit committees and boards in the selection of suitable KPIs for their company by setting out some characteristics and criteria that may be applied when considering individual KPIs.  It also provides an ‘Assurance Matrix’ which sets out five different sources of assurance that might be obtained over each KPI.

It is intended that the guidance will help audit committees and boards to:

• challenge the relevance of the company’s KPIs by ensuring that they are relevant to the company’s strategic objectives and user needs;
• compare the source of assurance obtained over each KPI against what users expect and desire;
• communicate the sources of assurance obtained over the KPIs to enhance users’ understanding of the assurance process; and
• communicate with users to ensure that the level of assurance obtained over KPIs is what the user expects and desires.

ICAS comments that “audit committees/boards should use this guidance to help them communicate to users the degree of confidence they have obtained over the relevance and reliability of the KPIs and the process undergone to acquire this confidence”.

The press release and full report are available on the ICAS website.

The key findings of the evaluation launched in August 2014 show that IFRSs were successful in creating a common accounting language for capital markets. Preparers claimed mostly positive experiences regarding their application of IFRSs and stated that in most cases benefits outweighed costs. Investors also largely supported IFRS for improving the transparency and comparability of financial statements. In addition, most stakeholders considered that the process through which IFRS become part of EU law works well; the recent reform of the European Financial Reporting Advisory Group (EFRAG) was supported.

However, the report also identifies room for improvement in some areas. Respondents feel that the collaboration in the endorsement process could be enhanced to improve timeliness and to allow for a more holistic consideration of standards with other aspects of EU law. They also stated that while an endorsement process remains necessary to ensure that the standards developed by the IASB meet EU criteria and are conducive to the European economy, procedures could be simplified.

Please click for the following information on the European Commission's website:

• Press release
• Report
• Staff working paper