October

IASB updates work plan

27 Oct, 2015

The IASB recently updated its work plan. The Board changed the format in July 2015, so that a direct comparison with previous work plans is not easily possible, as the attribution to quarters has been abandoned.

On major projects, the decision on the project direction on conceptual framework has moved from "after six months" to "within six months."  The disclosure initiative – materiality practice statement project is expected to be publish “after six months.” For all other major pro­jects — as far as can be told from the IASB's new ap­proach — the next project steps may or may not have been pushed back by one month since the last work plan update.

Updates re­gard­ing the im­ple­men­ta­tion pro­jects now include the addition of the annual improvements 2015–2017 and remeasurement of previously held interests — obtaining control or joint control in a joint operation that constitutes a business projects. Next, disclosure initiative – amendments to IAS 7 is now in the draft IFRS stage and a final IFRS is expected within the “next three months.” Also, remeasurement at a plan amendment, curtailment or settlement / availability of a refund of a surplus from a defined benefit plan project is no longer in public consultation stage; instead the IASB will conduct analysis and decide on the direction of this project within the “next six months.” Lastly, two recently published draft IFRIC Interpretations (uncertainty over income tax treatment and foreign currency transactions and advance consideration) are now in public consultation; further direction on the project will occur “after six months.” For all other im­ple­men­ta­tion pro­jects, the next project steps may also have been pushed back by one month or not.

In addition, two research projects (discount rates and goodwill and impairment) in the assessment phase have been updated to reflect that discussions have begun.

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

ESMA announces enforcement priorities for 2015 financial statements

27 Oct, 2015

The European Securities and Markets Authority (ESMA) has announced the priority issues that the assessment of listed companies' 2015 financial statements will focus on.

ESMA considers the following key topics to be especially relevant for the examinations of listed companies' financial statements:

  • impact of financial markets conditions on financial statements;
  • statement of cash flows and related disclosures; and
  • fair value measurement and related disclosures.

ESMA notes that these topics were chosen based on the recurrence of issues in the application of certain IFRS requirements identified when reviewing financial statements. They are also posing particular challenges in the current economic environment where some reference interest rates and the market prices of a number of commodities have decreased significantly and continue to be highly volatile while some exchange rates have fluctuated significantly.

ESMA and European national enforcers will monitor and supervise the application of the IFRS requirements outlined in the priorities, with national authorities incorporating them into their reviews and taking corrective actions where appropriate. ESMA will collect data on how European listed entities have applied the Priorities and will publish its findings in early 2017.

Please click for the following documents on the ESMA website.

ESMA issues public statement on disclosures

27 Oct, 2015

The European Securities and Markets Authority (ESMA) has published a Public Statement aimed at improving the quality of disclosures in financial statements.

The ESMA public statement is a reaction to the perceived disclosure overload and the tendency to provide boilerplate disclosures. While ESMA commends initiatives taken up by standard-setters (not least by the IASB in its Disclosure Initiative) and even enforcers (for example in Danmark), ESMA states that relatively few issuers have taken action so far. Therefore, ESMA has developed five disclosure principles issuers should consider regarding the disclosures made in annual reports:

    1. Telling the entity’s own story by focussing on entity-specific disclosures and avoiding boilerplate language.
    2. Providing relevant information that is necessary to understand the issuer’s financial performance and position in the financial statements in an easily accessible way.
    3. Thinking about materiality and applying the IFRS materiality principle.
    4. Promoting readability of the financial statements by producing information that is written in as clear and concise a way as possible.
    5. Providing consistent information within annual reports.

Please click for addition information on the ESMA website:

November 2015 meeting of the ICAEW FRDG

27 Oct, 2015

The next meeting of the Institute of Chartered Accountants in England and Wales (ICAEW) Financial Reporting Discussion Group (FRDG) will be held on 2 November 2015 in London.

The meeting will look at current hot topics among preparers and investors, including materiality and integrated reporting and will look at key findings from Deloitte's Annual Reporting Insights 2015.

Click for more information, including registration details on the ICAEW website.

ESMA publishes documents to support the entering into force of the amended Transparency Directive

26 Oct, 2015

The European Securities and Markets Authority (ESMA) has published four documents in order to support the implementation of the amended European Union Transparency Directive.

The new Transparency Directive closes an existing gap in the notification requirements by requiring disclosure of major holdings of all financial instruments that could be used to acquire economic interest in listed companies. It enters into force on 26 November 2015.

The new documents ESMA has prepared to promote the implementation and to contribute to a harmonised EU application are:

  • updated questions and answers on the Transparency Directive;
  • a new standard form for disclosing the home member state;
  • a new standard form for the notification of major holdings; and
  • the indicative list of financial instruments subject to notification requirements. 

The documents are available through the press release on the ESMA website.

ESMA publishes four documents in preparation for implementing EU-Transparency Directive requirements

26 Oct, 2015

The European Securities and Markets Authority (ESMA) has published four documents in order to promote implementation and assist application of requirements included within the amended European Union Transparency Directive.

The Transparency Directive (TD), which creates a common basis for disclosure and dissemination of regulated information to the markets on a regular and on-going basis, was amended in 2013 and enters into force on 26 November 2015.

The four documents are:

  • an updated version of questions and answers on the TD;
  • a new standard form for issuers to disclose who their home Member State is as required under the TD;
  • a new standard form for shareholders to notify major holdings of voting rights to competent authorities and issuers as required under the TD; and
  • the indicative list of financial instruments subject to notification requirements. 

The press release and further information are available on the ESMA website.

IFRS Foundation Trustees hold October 2015 meeting

26 Oct, 2015

The IFRS Foundation Trustees met in Beijing on 14–15 October 2015.

Meeting activities included the following:

  • Executive session— The Trustees discussed a number of important strategic issues:
    • Meeting with the Chinese Assistant Minister of Finance — Prior to the Trustees' meeting there had been a meeting with the Chinese Assistant Minister of Finance which discussed convergence and support for the IFRS Foundation and its work. The meeting was described as having been very encouraging.
    • Strategic overview — The Trustees discussed a proposed framework and suggested success metrics for measuring the Foundation’s performance against its strategic goals. The Trustees commended the staff for its efforts but noted that the proposals focused on seeking to develop measures of the organisation’s effectiveness. The Trustees stressed the need to also look at measures of the organisation’s efficiency, as well as looking at the resources and inputs available to the Foundation.
    • Funding — The Trustees noted that several new jurisdictions have started to fund the Foundation and that several other jurisdictions have increased their contributions. However, there are still jurisdictions that fund below the contribution that might be expected for the size of the economy or that do not fund the Foundation at all. The Trustees also acknowledged and appreciated the efforts that had been made to increase the organisation’s reserves towards the target of a full year’s expense level over the next few years.
    • Communications strategy — The Trustees discussed how the Foundation might better align its communications and stakeholder engagement activities with its strategic goals.
    • International developments — The Trustees were encouraged by the increased voluntary adoption of IFRS in Japan, noted the overall positive outcome of the European Commission’s review of the IAS Regulation and the positive EFRAG endorsement advice on IFRS 9, and discussed the on-going situation with regard to the USA.
  • IASB Chairman’s report — The Vice-Chair of the IASB provide the Trustees with an update on a number of the IASB’s technical activities, on behalf of the Chair.
    • Major projects — On insurance contracts, the IASB expects to finish redeliberations until the end of 2015, with the standard itself expected in 2016. The extension of the original timetable means that the mandatory effective date for the standard would be later than that for IFRS 9. Given stakeholders concerns about the implications of this the IASB plans to propose two approaches (the overlay approach and the deferral approach) later in 2015. On leases, the forthcoming standard is currently being drafted and is expected to be published before the end of 2015.
    • Engagement strategy — The IASB's Investors in Financial Reporting programme has received positive reactions, with support from the investment community and others, and will be reviewed at the end of 2015.
    • Use of IFRS globally and consistency of application — The Trustees noted the state of IFRS adoption around the world as evidenced in the IFRS Foundation's jurisdiction profiles. On consistent application, the Trustees were informed of the progress of the work of the transition resource groups on revenue recognition and the impairment of financial instruments. The Trustees were reminded that it is not the IASB’s intention to always establish a transition resource group when a standard is published. Rather, this would be considered on a case-by-case basis.
  • Report of the Due Process Oversight Committee (DPOC) — The Trustees received a report about the DPOC’s October 2015 meeting. For more information, see our related news item.
  • Stakeholder event — The IFRS Foundation hosted an event 'IFRS and China: Ever-changing Challenges and Opportunities' which saw several speeches and a panel discussion.

The full report on the IFRS Foundation trustees’ meeting is available on the IASB’s website.

EFRAG final comment letter on the IASB’s exposure draft proposing to defer the effective date of amendments to IFRS 10 and IAS 28

26 Oct, 2015

The European Financial Reporting Advisory Group (EFRAG) has published its final comment letter on the International Accounting Standards Board’s (IASB’s) exposure draft ED/2015/7 'Effective Date of Amendments to IFRS 10 and IAS 28'.

In August 2015, the IASB published ED/1015/7 with proposed amendments to IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures. The amendments aim at deferring the effective date of the September 2014 amendments to these standards indefinitely until the research project on the equity method has been concluded.
 
In its final comment letter, EFRAG agrees with the proposed amendments as EFRAG believes that this deferral will give the IASB the opportunity to address the application problems arising from the equity method requirements comprehensively, will give the IASB the opportunity to reconsider subsequently identified issues and challenges, and will reduce the risk of requiring successive rounds of changes to IAS 28 in a short period of time.

EFRAG, however, does not agree to early application remaining possible after the effective date of the 2014 amendments has been postponed.

The press release and full comment letter are available on the EFRAG website.

Due Process Oversight Committee holds October 2015 meeting

26 Oct, 2015

The Due Process Oversight Committee (DPOC) met in Beijing on 13 October 2015.

Meeting activities included the following:

  • Updates on technical activities — The DPOC was presented with a report that outlined the due process activities for all projects on the IASB’s current agenda and questioned the IASB representatives on the Conceptual Framework project (especially around the extended comment deadline), Dynamic risk management (divergence of views between users and preparers), Materiality (practice statement vs. standard), Discount rates (way forward), and High inflation (inactive status of the project).
  • Different effective dates of IFRS 9 and the new standard on insurance contracts — The DPOC noted in particular that the views of Board members were very split on proposing the deferral approach, but that there were sufficient votes from the Board to push ahead with the issue of the ED. The DPOC also noted the ‘sunset’ clause included in the proposed deferral approach as this would send out a strong signal that the IASB was determined to complete the insurance contracts project. Lastly, the DPOC approved of the shortened comment period for the ED.
  • Agenda consultation — The DPOC noted that the questions asked as part of the agenda consultation were relatively open, which means that considering the feedback, summarising it, and acting on it could be a challenge. The DPOC asked to be provided with a summary of the feedback received and the IASB’s intended reaction.
  • IFRS Taxonomy — The DPOC was informed that the trial of integrating proposed taxonomy updates with exposure drafts the IASB publishes had resulted in the highest ever level of response to a proposed change to the IFRS Taxonomy. However, it also showed limited support for the approach. It is now proposed to consult on taxonomy updates at the same time as but not integrated with the standard development.
  • Review of Consultative group — The DPOC reviewed various consultative groups (e.g., the TRG, the ITG, and the ITCG) to determine their effectiveness and ultimately concluded that the groups assessed were functioning well.
  • Correspondence — No new correspondence has been received since the DPOC’s previous meeting.

The full report on the DPOC meeting is available on the IASB’s website.

Agenda for the October 2015 ITCG meeting

26 Oct, 2015

The agenda is available for the next meeting of the IFRS Taxonomy Consultative Group (ITCG), which be held in London on 27 October 2015.

The agenda is summarised below:

Tuesday 27 October 2015 (09:00-17:00)

  • Welcome
  • Update on activities
  • Consultation Paper — European Single Electronic Format (ESEF)
  • IFRS Foundation's Review of Structure and Effectiveness
    • Overview
    • World standard-setters meeting discussions
  • Role of technology and the IFRS Taxonomy strategy
    • Introduction to small group discussions
    • Small group discussions
    • Report back from small group discussions
  • IFRS Taxonomy versioning control
  • IFRS Taxonomy due process update
  • IFRS Taxonomy content areas for review

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

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