In its responses to the exposure drafts, the ICAEW comments on the IASB's proposals in various areas. Their major points include the following.

• They believe that the IASB should clarify the relationship between the terms 'faithful representation' (used in the Framework), 'fair presentation' (used in IAS 1 and IAS 8) and 'true and fair view' (a concept that occurs in the laws of many jurisdictions that have adopted IFRS).
• They disagree with the way in which prudence is being reintroduced into the Framework.
• They do not agree with the ED's definition of a liability.
• They believe that the ED's description of measurement bases needs more thought, including consideration of the measurement requirements of recent standards such as IFRS 9 and IFRS 15.
• They believe that more work is needed on the subject of distinguishing profit or loss from other comprehensive income.
• They are concerned that the changes proposed by the exposure draft on updating references imply that entities should review all accounting policies adopted for transactions that are not specifically covered by an IFRS. They believe that this would be unduly onerous and the amendments should only be applied when an entity is developing a new accounting policy or reviewing an existing policy for other reasons.

The following can be obtained from the ICAEW website:

• the ICAEW press release on these responses;
• the ICAEW response to ED 2015/3 Conceptual Framework for Financial Reporting; and
• the ICAEW response to ED 2015/4 Updating References to the Conceptual Framework.

Topics covered in the webinar include:

• Scope of the draft guidance.
• Key features of the draft guidance.
• Practical considerations and next steps.

Registration details for the webinar are available on the ICAEW website. 

On 10 November 2015, EFRAG published a draft letter to the European Commission, stating that EFRAG is "not in a position to amend" its endorsement advice on IFRS 9 although the IASB has decided to propose a deferral approach and an overlay approach, both aimed at addressing the mismatch, in December this year. EFRAG argued that any final decisions in the project will be made at the earliest in six to nine months from now and that uncertainty exists as to whether the IASB will provide an appropriate remedy when it makes these final decisions.

In its letter to EFRAG, ESMA emphasises the importance of fully implementing IFRS 9 and of applying the expected loss model to financial assets in a timely manner, as the introduction of the expected loss model responds to an important G20 request following the financial crisis. Even though final amendments to IFRS 4 adressing the mismatch are not to be expected until mid-2016, ESMA highlights that the IASB responded quickly and adequately to EFRAG’s concerns about the different application dates. ESMA states:

ESMA reiterates its position that a European carve-out is not a feasible solution for insurance activities in light of their global nature. [...] In light of the solution for the insurance industry being developed by the IASB, ESMA is of the view that EFRAG should enable endorsement of IFRS 9 in the EU as soon as possible.

Please click for access to the full comment letter on the ESMA website.

The detailed agenda as well as registration details are available on the FRC website.

Please click through for direct access to the notes:

Wednesday, 18 November 2015

• Fair value measurement.
• Post-employment benefits.
• Goodwill and impairment — Identification and measurement of intangible assets acquired in a business combination.
• Insurance contracts — Comparison of the general model and the variable fee approach.

Thursday, 19 November 2015

• Research project share-based payment — Global trends in pensions, potential models that might address the issue of contribution-based promises and other hybrid plans, and the potential impact of the Agenda Consultation and other IASB projects.
• IFRS implementation issues — IFRIC update.

The pre­lim­i­nary and un­of­fi­cial notes taken by Deloitte observers for the entire meeting are also available.

The Charity Commission performed a review of this area as normally, governance costs make up only a small part of a charity’s expenditure compared with the amount spent on charitable activities and the costs of raising funds.

The Charity Commission reviewed part B of the annual returns of charities to identify those that had reported both governance costs of more than 20 per-cent of their total expenditure and also reported total expenditure that was greater than 80 per-cent of their income in their most recently filed accounts – this consisted only of those larger charities with incomes over £500,000.   

A sample of 76 charities was reviewed to determine whether the charity’s trustees’ annual report and accounts provided a reasonable explanation for the high level of governance costs.

Findings indicated:

• Only 4 per-cent of charities included a “reasonable” explanation for their high level of governance costs within their trustees’ annual report
• 9 per-cent of charities in the sample did not have an unusually high level of governance costs but had completed their annual return incorrectly.  These findings mirror those of a previous charity commission review that found errors in annual returns with respect to the classification of charitable expenditure.
• A “vast majority” of charities had allocated costs to governance costs that should have been allocated to other categories of expenditure.  The most common error was to equate governance costs with general management and administration costs.  A number of costs such as staff, office, depreciation and support costs should have been allocated to other categories of expenditure.

The Charity Commission comments that charities in the sample “appeared to be either not fully aware of the SORP’s requirements for reporting their expenditure in the SOFA or did not understand the difference between support costs and governance costs”.

The Charity Commission highlights that the findings “emphasise the importance of trustees having a good understanding of their charity’s activities and how these are reported in their annual reports, accounts and annual returns.  In particular, in emphasises the need for charities to understand their costs and how those costs relate to the activities that they are carrying out to achieve their objectives”.

 The press release and full findings are available on the Charity Commission website.