September

ESMA opinion on accounting for cash contributions to a DGS

29 Sep, 2015

The European Securities and Markets Authority (ESMA) has published its opinion on the application of the IFRS requirements in relation to the recognition of cash contributions to the Deposit Guarantee Scheme (DGSs) in IFRS accounts.

ESMA’s responsibilities include promoting effective and consistent application of International Financial Reporting Standards (IFRS). Therefore, the ESMA Regulation gives ESMA competence to deliver accounting opinions.

The opinion now published is limited to the accounting treatment of ex-ante non-refundable cash contributions to the DGS for which the obligating event is identified at a single point in time. Based on the analysis of the existing IFRS requirements, ESMA concluded that as soon as the obligating event of a non-refundable cash contribution to a DGS is identified, the contribution must be recognised as an expense in full.

Please click to access the opinion on the ESMA website.

IASB issues 'Investor Perspectives' on measurement

28 Sep, 2015

The IASB has released a new edition in its 'Investor Perspectives' series. In this edition, IASB member Steve Cooper discusses the proposals on measurement in the Conceptual Framework project.

On 28 May 2015, the IASB issued an exposure draft on the conceptual framework, which includes a more extensive measurement section, describing the different measurement methods and considerations for applying these methods. In this edition, Mr Cooper discusses five "key questions" related to selecting a measurement method.

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

'IASB is not an Anglo-Saxon, self-regulatory body'

28 Sep, 2015

In his opening remarks at the 2015 Word Standard-setters (WSS) meeting that is currently taking place in London, IASB Chairman Hans Hoogervorst spoke about standard-setting in the public interest.

His remarks mostly built on the IASB and the IFRS Foundation joint publication Working in the public interest: the IFRS Foundation and the IASB and Mr Hoogervorst elaborated on the four main themes:

  • Working in the public interest;
  • The audience of IFRS;
  • The characteristics of IFRS; and
  • Institutional aspects of the IFRS Foundation and the IASB.

During his discussion of the last point, Mr Hoogervorst admitted that there is a perception that personally angers him:

Some see us as an Anglo-Saxon, self-regulatory body, which somehow privileges commercial interests. The reality is quite different.

Mr Hoogervorst explained that while it was true that the IASB's governance is very similar to that of the FASB, similar governance models can also be found in many non Anglo-Saxon countries. He also stressed that the IASB has no power to impose IFRS. As the standards need to be voluntarily adopted, the IASB knows that it needs to listen carefully to its constituents, which means that it simply cannot afford to be self-regulatory. And lastly he stressed that the notion furthest from the truth was that the IASB would somehow privilege commercial interests. Mr Hoogervorst pointed to the fact that the members of the IASB are shielded from undue influence by special interests by not being allowed to hold positions in for-profit organisations. He also stressed the transparency of the IASB's decision-making, which allows the public to watch very closely whether the IASB is unduly influenced in any way.

Please click to access the full text of the speech on the IASB's website.

FSB calls for continued efforts on convergence, considers the IASB's insurance standard a high priority

28 Sep, 2015

The Financial Stability Board (FSB) met in London on 25 September 2015 to discuss progress in its ongoing workplan.

Although overall progress was considered to be good, the plenary reiterated its support for the objective of achieving a single set of high quality global accounting standards and called on the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) to continue efforts to achieve this. On individual accounting projects, the plenary noted the importance of the IASB completing its standard for insurance contracts as a high priority.

Please click to access the report from the meeting on the FSB website.

Responses to the European Commission's consultation on corporate tax transparency

28 Sep, 2015

The European Commission (EC) has made available the responses to its public consultation on corporate tax transparency in the EU. The consultation aimed to find out whether requiring companies to disclose more information about the taxes they pay could help tackle tax avoidance and aggressive tax practices in the EU.

The consultation was launched in June 2015. The EC has now made available the responses authorised for publication. The responses have been made available as they are and are available here on the EC website. A summary of responses will be published at a later stage.

IASB issues work plan update

26 Sep, 2015

Following its September meeting, the IASB has updated its work plan. Due to the IASB's new presentation format, which now speaks of "within three months", "within six months" and "after six months", changes are difficult to trace and there is a potential slippage of two months (since the last update in July) in every project where the IASB has not made an active change. However, one of the few changes made confirms that the IASB expects that the new leases standard will be finalised before the end of the year.

On the major projects, the change in the Leases project is the only one. The move from "within six months" to "within three months" logically derives from the fact that the IASB intends to publish a final standard before the year is out. On all other major projects next project steps may or may not have been pushed back by two months since the last work plan update in July.

Updates regarding the implementation projects now include an expected exposure draft of proposed changes that would address the conflicts arising from the different effective dates of IFRS 9 and IFRS 4. As noted, these proposals would include an overlay approach and a deferral approach. The exposure draft is expected "within three months".

Finally, for the following implementation projects the status has been changed from "within six months" to "within three months":

  • Exposure draft on Clarifications Arising from the Post-implementation Review (Proposed amendments to IFRS 8);
  • Decision on project direction on Clarifications to IFRS 15 Revenue from Contracts with Customers: Issues emerging from TRG discussions; and
  • Decision on project direction on Remeasurement at a Plan Amendment, Curtailment or Settlement / Availability of a Refund of a Surplus from a Defined Benefit Plan (Proposed amendments to IAS 19 and IFRIC 14).

On all other implementation projects next project steps may also have been pushed back by two months or not.

The revised IASB work plan is available on the IASB's Web site.

September 2015 IASB meeting notes posted — part 1

24 Sep, 2015

The IASB met at its offices in London on 21–24 September 2015, some of it a joint meeting with the FASB. We have posted the Deloitte observer notes from the sessions on revenue, the research programme, and the disclosure initiative.

Please click through for direct access to the notes:

Tuesday, 22 September 2015

Wednesday, 23 September 2015

Thursday, 24 September 2015

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

ICAEW and FRC event on improving smaller company reporting

24 Sep, 2015

The Institute of Chartered Accountants in England and Wales (ICAEW) and the Financial Reporting Council (FRC) will be jointly hosting a half day event in November to discuss the FRC’s on-going project on the quality of reporting by smaller-listed and AIM quoted companies.

The event will comprise several short presentations after which attendees will be invited to join the panel to discuss some of the key issues that have emerged so far.

Further details as well as registration details are available on the ICAEW website.

Final instalment of the IASB's Conceptual Framework webcast series

24 Sep, 2015

In August 2015, the IASB launched a webcast series on the proposed changes to its Conceptual Framework. Eight pre-recorded webcasts will be posted to the IASB's website weekly. The last instalment was posted today.

The on-demand webcasts provide detailed discussions of each part of the IASB's May 2015 Exposure Draft ED/2015/3 Conceptual Framework for Financial Reporting.

The webcast on Possible implications of the proposals — with provisions and contingent liabilities case study is available today. For information about the upcoming webcasts and a complete archive, see the webcast page on the IASB's website.

NAPF publishes its 2015 AGM report

24 Sep, 2015

The National Association of Pension Funds (NAPF) has published its 2015 AGM report (“the report”). This is published in advance of the NAPF updating its Corporate Governance Policy & Voting Guidelines which “aim to assist investors, and their proxy voting agents, in their interpretation of the provisions of the Corporate Governance Code and in forming judgements on the resolutions presented to shareholders at a company’s AGM”.

The NAPF indicates that the report “reflects upon the 2015 AGM reporting season, highlighting positive developments as well as drawing to attention those instances where investors expressed discontent with certain arrangements”. 

The key findings of the report include:

  • It was notable that there has been more “purposeful” engagement between companies and investors.  However, the report indicates that there are a “relatively small number of exceptions”.
  • Executive pay “continues to attract a lot of attention”.  The report cites the report published by The Department for Business, Innovation and Skills (BIS) in March 2015 which although indicated that “most companies……complied with the majority of the requirements in the regulations”, there was a number of notable levels of non-compliance with certain requirements in the Regulations.  The report notes that “many companies have been minded” to take into account recent changes to the UK Corporate Governance Code, even though these were not in force for the 2015 AGM reporting season – especially the requirements on clawback and malus provisions.
  • In terms of disclosure within remuneration reports under the new Regulations, investors see “the issue of disclosure of bonus performance targets” as the area where most progress is needed.  The report also highlights a number of “bigger rebellions” with respect to remuneration reports.
  • There were instances where a director seeking re-election received more than 15% dissent.  The report indicates that the annual election of directors is important in providing accountability to shareholders and highlights that boards and individual directors should “reflect upon instances where these resolutions receive anything less than 90% support”
  • Shareholders consider board refreshment and succession planning as one of the most important issues for consideration.  There is an increasing desire for greater assurance to be provided in relation to succession planning via “transparent reporting and open dialogue”.

Looking ahead to 2016, the report suggests that investors are “eagerly awaiting” responses to the new requirement to publish a viability statement.  The report indicates that “there are no hard and fast rules over what the right time period is for these viability statements and therefore it is likely that, to begin with at least, investors will look across sectors to compare the number of years chosen”.  However it does point out that companies should be clear as to why the chosen period makes sense for their company and that the disclosures should be both “thoughtful and company specific”.  The report also suggests that companies should provide more transparency as to issues related to the composition and management of the workforce as indicated in the NAPF publication ‘Where is the workforce in corporate reporting?’ in June

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

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