October

GRI publishes second analysis on sustainability and reporting trends in 2025

08 Oct, 2015

The Global Reporting Initiative (GRI) has published a second Analysis Paper resulting from its Reporting 2025 Project that is designed to promote an international discussion about the purpose of sustainability reporting and disclosures looking ahead to 2025.

As part of the project, thought leaders in various fields are interviewed on subjects ranging from data technology to society and business development scenarios, with the aim of identifying main issues that will – or should be – at the center of companies' agendas and their public reports. The insights presented in the second paper provide result from the analysis of another 22 interviews. A first paper with the first nine interviews was published in June this year, a final report in January 2016.

The gained from the second round of interviews are:

  • The general context in which we all live and in which businesses operate and decision-makers act will be shaped by well-known challenges.
  • Businesses will need to play a larger role than they do today in the design and implementation of solutions.
  • It is in the interest of companies to engage much further by taking action to find innovative solutions to global challenges.
  • Another important change in the next decade is the development of data technology and digital communication.
  • Coherence and consistency in communications and actions will be the most important building blocks of reputation.

The report then goes on to analyse what these findings mean for companies, business leaders and decision-makers and for reporting and communication.

Please click to access the full report on the GRI website.

Agenda for the November 2015 IFRS Advisory Council meeting

08 Oct, 2015

An agenda has been released for the upcoming meeting of the IFRS Advisory Council, which is being held in London on 2-3 November 2015. Highlights of the meeting will be thorough discussions of the Review of structure and effectiveness of the IFRS Foundation and of the Agenda consultation 2015.

A summary of the agenda is set out below:

Monday 2 November 2015

Morning session (09:15-12:30)

  • Welcome and Chairman's introduction
  • Review of structure and effectiveness of the IFRS Foundation – introduction to break-out session
  • Trustee activities

Afternoon session (13:15-17:30)

  • IASB and IFRS Foundation activities
  • Review of structure and effectiveness of the IFRS Foundation – report back from break-out session and plenary discussion
  • IFRS network – exchange with the US Financial Accounting Standards Advisory Council (FASAC)

Tuesday 3 November 2015

Morning session (09:15-12:15)

  • Agenda consultation 2015 – introduction to break-out session
  • Members' communications

Afternoon session (14:00-15:45)

  • Agenda consulation 2015 – report back from break-out session and plenary discussion
  • Sum up discussions

Agenda papers for the meeting will be available in due course on the IASB website.

The Bruce Column — From reporting to thinking: what the annual survey shows

07 Oct, 2015

The evidence is in from the latest Deloitte survey of annual reports. The cultural change which stems from strategic reports, more incisive narrative reporting, and the integrated thinking brought about through integrated reporting, is accelerating. Our regular, resident columnist, Robert Bruce, reports.

Reports are undergoing a cultural change. The need for strategic reports, more incisive narrative reporting and the advent of integrated reporting, are all pointing one way. The greater information required, both financial and non-financial, means that if it is all to make sense as a whole the connections between its constituent parts have to be plain to the user and to be clearly understood.

The latest Deloitte survey of annual reports provides the picture. Accounts are now much more informative and contain much more disclosure. It is clear that they are there to communicate and to tell the company’s story. The old bugbear, the burgeoning length of the average report, a plague of the last few decades, is only marginally up on last year. But offsetting that minimal rise are the signs that companies are making a real effort to follow the advice and encouragement of the Financial Reporting Council and are producing clearer and more concise reporting and curbing the amount of overload in their reports. Companies are putting their effort into strategic reports and so improving communications and increasing a company’s ability to tell a comprehensive, consistent, and connected story. The cultural changes within company reporting are evolving fast. And at the heart of that, and at the heart of good narrative and story-telling, is linkage, the ability to connect.

This is particularly important with integrated reporting. Integrated reporting and strategic reporting sound very similar but what differentiates them is that integrated reporting is an outcome of integrated behaviours, processes and governance across the business which result in integrated thinking.

The survey shows that only seven of the companies in the survey sample made an explicit reference to integrated reporting. But there is already a significant crossover between what is needed to provide the effective reporting which will sit well within the framework of integrated reporting, and the reporting which is required for the content of a strategic report. The survey shows that many companies are already on their way to integrated reporting without necessarily acknowledging it formally in their reports. All this suggests that the route along the paths of integrated reporting which will in turn provide the benefits of integrated thinking across a company is being followed extensively.

Linkage is the most important issue at this stage in the evolution of the report into a much more comprehensive and useful document. This year's Deloitte survey shows that linkage is still, as it were, the weak link. Only 10% of companies demonstrated comprehensively how all the various elements of the report linked together, not just through the obvious way of providing cross references between them, but also by showing clear evidence of the coherent thought process by which the information has been pulled together: the linking together of the company’s objectives, business model, strategy, key performance indicators and risks.

Overall the survey shows that quality has improved and that companies are striving to tell their story and tell it better. And that can only be a positive sign.

Agenda published for the October 2015 IFRS Foundation Trustees meeting

07 Oct, 2015

The agenda for the public session of the upcoming meeting of the IFRS Foundation Trustees is now available. The Trustees will meet on 15 October 2015 in Beijing.

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

Thursday, 15 October 2015

IFRS Foundation Trustees meeting (12:15–17:15 CST)

  • 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
  • Report of the Due Process Oversight Committee
    • Technical Activities
    • Different effective dates of IFRS 9 and the new standard on insurance contracts: Approval for shortened comment period of an exposure draft
    • Agenda Consultation
    • IFRS Taxonomy: Approval of invitation to comment
    • Consultative groups: Update
    • Correspondence: Update

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

FRC launches new project on corporate culture and behaviour

06 Oct, 2015

The Financial Reporting Council (FRC) has launched a project on corporate culture and behaviour. The project will be in partnership with the Chartered Institute of Management Accountants (CIMA), the City Values Forum, the Chartered Institute of Personnel and Development (CIPD), the Institute of Business Ethics (IBE) and the Chartered Institute of Internal Auditors (IIA).

The aim of the project is to gather practical insight into corporate culture and the role of boards; to understand how boards can shape, embed and assess culture; and to identify and promote best practice.  The project will consist of four work streams:

  • Delivering Sustainable Success – the role of an effective board;
  • People issues – aligning culture, values, human resource practices and performance reward systems;
  • Stakeholder issues – relationships between culture and business models, with shareholders, customers and suppliers, and the impact on the wider community and environment; and
  • Embedding and assurance – measuring and monitoring culture, the role of internal audit, risk management and public reporting of cultural indicators.

The FRC invite all those with “expertise, experience or an interest in this area” to participate.  It is intended that the FRC’s Guidance on Board Effectiveness will be replaced with “new material that has culture at its heart, to support the application of the principles in the UK Corporate Governance Code”.  The FRC will also develop practical market-led ‘how to’ resources “to help boards across a broad range of sectors and industries take effective action on culture”.

More information on this project and how to contribute can be found on the FRC website.

HMRC consults on draft regulations on country-by-country reporting

06 Oct, 2015

HM Revenue & Customs (HMRC) has issued a consultation on draft regulations to implement country-by-country reporting in the UK for accounting periods beginning on or after 1 January 2016.

The draft regulations give effect to the Base Erosion and Profit Shifting (BEPS) Action Plan adopted by the Organisation for Economic Development (OECD) and G20 countries in respect of the provision of information concerning high-level transfer pricing and other BEPS related matters.  The ultimate aim is to improve transparency between multinational businesses and tax authorities to help identify tax avoidance.

The draft regulations will require certain multinational enterprises to report electronically via a country-by-country report annually to HMRC.  The report will need to be produced by multinational enterprises with parent entities resident in the UK and with consolidated group revenue of £586m or more in a 12 month accounting period.  The report will need to contain the following for each tax jurisdiction in which they do business:

  • the amount of revenue, profit before income tax and income tax paid and accrued; and
  • their total employment, capital, retained earnings and tangible assets.

Those multinational enterprises will also be required to identify each entity within the group doing business in a particular tax jurisdiction and to provide an indication of business activities within a selection of broad areas which each entity engages in.

Country-by-country reports will be automatically shared by relevant countries in accordance with international agreements governing the exchange of information.

The consultation which closes on 16 November 2015 is available on the HMRC website.

We comment on the proposed deferral of the effective date of amendments to IFRS 10 and IAS 28

06 Oct, 2015

We have published our comment letter on the International Accounting Standards Board's (IASB) Exposure Draft ED/2015/7 ‘Effective Date of Amendments to IFRS 10 and IAS 28’.

In our comment letter, we do not object with the proposal to defer the effective date of the amendments to IFRS 10 and IAS 28; however, we note that the issues addressed by the amendments to IFRS 10 and IAS 28 will remain unresolved and encourage the IASB to prioritise its work on the research project on equity accounting to address those issues.

Please click to access the full comment letter.

ESMA final guidelines on alternative performance measures available in all EU languages

06 Oct, 2015

The final Guidelines on Alternative Performance Measures (APMs) for listed issuers the European Securities and Markets Authority (ESMA) published in June 2015 are now available in all official languages of the European Union.

The guidelines apply to issuers with securities traded on regulated markets, and persons responsible for drawing up a prospectus. They are effective from 3 July 2016. They are now not only available in English but also in Bulgarian, Croatian, Czech, Danish, Dutch, Estonian, Finnish, French, German, Greek, Hungarian, Italian, Latvian, Lithuanian, Maltese, Polish, Portuguese,  Romanian, Slovak, Slovenian, Spanish, and Swedish. Please click to access the documents on the ESMA website (clicking on the blue "Info" button will open related documents).

EFRAG publishes September 2015 issue of 'EFRAG Update'

05 Oct, 2015

The European Financial Reporting Advisory Group (EFRAG) has published an 'EFRAG Update' summarising public technical discussions held and decisions made during September 2015.

The Update reports on the meeting of the EFRAG Board on 21 September, the meeting of the EFRAG Technical Expert Group (EFRAG TEG) on 10 - 11 September, the meeting of the EFRAG Consultative Forum of Standard Setters (EFRAG CFSS) on 24 September as well as the expected written procedures of the EFRAG Board in October.  The Update also lists EFRAG publications issued in September:

Please click to download the September EFRAG Update from the EFRAG website.

Summary of the September 2015 ITCG meeting

05 Oct, 2015

The IASB has published notes to the IFRS Taxonomy Consultative Group (ITCG) meeting held on 16 September 2015.

The ITCG discussed the use of dimensions within the tagging of the IFRS Foundation’s financial statements. Specifically, "whether a dimensional or non-dimensional approach should be used for the table note disclosure related to investments and bonds; and whether the 2014 or 2015 annual IFRS Taxonomy should be used." The ITCG members and staff agreed that two sets of XBRL files containing dimensional and non-dimensional approach should be available and that the 2015 annual IFRS Taxonomy should be used.

For more information, see the meeting notes on the IASB website.

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