May

May 2016 IASB meeting notes posted

19 May, 2016

The IASB met at its offices in London on 17–19 May 2016. We have posted the Deloitte observer notes from all of the sessions.

Please click through for direct access to the notes:

Tuesday, 17 May 2016

Wednesday, 18 May 2016

Thursday, 19 May 2016

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

IFRS Foundation Annual Report 2015

19 May, 2016

The IFRS Foundation (IFRSF) has published its Annual Report for 2015, titled 'Focussing on the future'.

The report for 2015 sets out the organisation's strategic priorities for 2015-2017, broken down into four strategic goals:

  • develop a single set of high quality, globally enforceable accounting standards,
  • pursue the goal of global adoption of IFRS,
  • support consistent application and implementation of IFRS, and
  • ensure continued independence, stability and accountability of the IFRS Foundation

Please click to download the report from the IASB's website.

Agenda published for the May 2016 IFRS Foundation Trustees meeting

19 May, 2016

The agenda for the public session of the upcoming meeting of the IFRS Foundation Trustees is now available. The Trustees will meet on 25 and 26 May 2016 in Jakarta.

The agenda for the public session of the meeting is summarised below. It includes feedback from an earlier (25 May), non-public DPOC meeting (the Trustees will discuss whether DPOC meetings shall be public going forward).

Thursday, 26 May 2016

IFRS Foundation Trustees meeting (11:45–12:45)

  • Report of the Chair of the IFRS Foundation Trustees
  • Report of the IASB Chair
    • Technical work overview
    • Agenda consultation
    • Engagement strategy
    • Consistency in the application of IFRS globally
  • Report of the Due Process Oversight Committee
    • Technical Activities: Key issues and update
    • Insurance contracts
    • IFRS Taxonomy
    • Proposal for the DPOC to meet in public
    • Benchmarking
    • Consultative groups: Update
    • Correspondence: Update

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

Staff given permission to draft the final amendments regarding the application of IFRS 4 together with IFRS 9

17 May, 2016

The IASB voted today in favour of the staff recommendations around (i) the requirement or option to reassess eligibility criteria for the deferral approach, (ii) the fixed expiry date and transition to IFRS 9, (iii) relief for investors in associates and joint ventures, and (iv) the applicability of the overlay approach and the deferral method for first time adopters of IFRS.

In our meeting summary, we outline the topics and recommendations discussed, which partly differ from the proposals in the ED, and offer a table explaining the option to reassess eligibility criteria for the deferral approach. The Board approved the individual staff recommendations either unanimously or with great majority.

The IASB has now published a press release stating that after having voted to reconfirm the overlay and the deferral approach in April, it has now concluded deliberations on this topic and has asked staff to draft the final amendments to IFRS 4 Insurance Contracts, which the Board expects to issue in September 2016.

One Board member intends to dissent from the publication of the amendments because she considers that information would be lost as a consequence of not implementing IFRS 9.

EFRAG issues draft endorsement advice on clarifications to IFRS 15

17 May, 2016

The European Financial Reporting Advisory Group (EFRAG) has issued for comment its draft endorsement advice for the use of the clarifications to IFRS 15 'Revenue from Contracts with Customers' in the European Union (EU).

In April 2016 the International Accounting Standards Board (IASB) published Clarifications to IFRS 15 'Revenue from Contracts with Customers'.  The objective of the amendments is clarify the requirements of the standard in certain areas (identifying performance obligations, principal versus agent considerations and licensing) and provide some transition relief for modified contracts and completed contracts

EFRAG supports the adoption of the amendments and recommends their endorsement.  EFRAG’s initial assessment is that the amendments meet the technical requirements of the Regulation (EC) No 1606/2002 of the European Parliament and of the Council on the application of international accounting standards.    

EFRAG also considers that the overall benefits of the amendments are likely to outweigh the associated costs to implement them.

Comments are requested by 17 June 2016.

EFRAG has also updated its endorsement status report to reflect the issuance of the draft endorsement advice.

The EFRAG press release regarding this, including draft endorsement advice and the invitation to comment, is available on the EFRAG website.

Deregulatory changes introduced for LLPs and qualifying partnerships and related amendments made to FRS 105

17 May, 2016

The Limited Liability Partnerships, Partnerships and Groups (Accounts and Audit) Regulations 2016 SI 2016/575 (“the Regulations”) have been written into UK law, implementing deregulatory changes for LLPs and qualifying partnerships. The FRC has also made consequential amendments to FRS 105.

The EU Accounting Directive 2013/34/EU (“the EU Directive”) became part of EU law on 26 June 2013 and, following a consultation by the Department for Business, Innovation and Skills (BIS), regulations were made (the Companies, Partnerships and Groups (Accounts and Report) Regulations 2015) which implemented the EU Accounting Directive for limited companies and qualifying partnerships. Changes were also made by the Financial Reporting Council (FRC) to UK accounting standards in July 2015 to implement those changes.

Subsequently, the Government consulted separately on equivalent changes for LLPs and on extending the micro-companies regime to qualifying partnerships. Following the responses received to the consultation, the Government announced it would introduce a number of key changes for LLPs and qualifying partnerships.  Following on from this, the Regulations have now been made.

The Regulations come into force on 18 May 2016. The majority of amendments introduced apply for financial years beginning on or after 1 January 2016 with early adoption permissible for financial years beginning on or after 1 January 2015. However:

  • the increase in size limits for audit exemption purposes cannot be early adopted and only applies for financial years commencing on or after 1 January 2016; and
  • the Regulations require that a full list of subsidiaries and other related undertakings be provided in the notes to the financial statements of an LLP, replacing the previous option to include only a list of principal subsidiaries and file the full list with the annual return. This requirement applies for annual reports of an LLP approved on or after 1 July 2016. Our ‘A Closer Look’ newsletter covered the equivalent changes for companies and qualifying partnerships which applied from 1 July 2015.

As the Regulations extend the ability to prepare accounts under the micro-entities regime to qualifying partnerships and LLPs, the FRC has also amended FRS 105 to deal with such partnerships.

Click here to access the new Regulations on the BIS website.  The FRC's press release and amendments to FRS 105, as well as an impact assessment of the changes, can also be obtained from their website.  Our Need to know publication can be accessed here.

EDTF disbanded

17 May, 2016

The Financial Stability Board (FSB) has announced that its Enhanced Disclosure Task Force (EDTF) has completed its work.

The EDTF was formed in May 2012 at the initiative of the FSB as a consequence of the global financial crisis in a move to improve the risk disclosures made by banks. In October 2012, the EDTF published a report recommending key enhancements and identifying seven fundamental principles for enhancing risk disclosure. In three subsequent reports the EDTF measured the banks' progress against the recommendations in the report; the last one was published in December 2015. The FSB now believes that a further survey is unlikely to deliver significant increases and has therefore formally disbanded the task force.

Please click for the press release on the FSB website.

Pre-meeting summaries for the May IASB meeting

16 May, 2016

The International Accounting Standards Board (IASB) will meet at its offices in London on 17–19 May 2016. We have posted our pre-meeting summaries for the meeting that allow you to follow the IASB’s decision making more closely. For each topic to be discussed we summarise the agenda papers made available by the IASB staff and point out the main issues to be discussed by the IASB and the staff recommendations.

A main focus of the IASB's discussions this month will be the feedback to the Agenda Consultation. Check out the summaries for the 13 agenda consultation discussions as well as other discussions on insurance and IFRS 9, share-based payments, financial instruments with characteristics of equity, income taxes, conceptual framework, goodwill and impairment, and revenue. We have added them to our meeting note page and will supplement them with our popular meeting notes after the meeting.

The Bruce Column — Finance for the Future: spreading the word globally and enhancing best practice

16 May, 2016

This year’s Finance for the Future Awards aim to expand best practice and spread the word around the world. Robert Bruce, our regular, resident, columnist explains how ideas, insight and advice can change business thinking.

The best way to bring about change in business is to show very clearly how it can be done and then reference the examples of companies which have, successfully, achieved it.

The Prince of Wales’ Accounting for Sustainability project, A4S, has come a long way in a relatively short time. From initial discussions amongst a small number of experts in a converted bedroom in Clarence House, the Prince’s official residence, the project has progressed to become a truly global influence in spreading best practice and building understanding. And one of the ways it has done this is through the awards system it set up with ICAEW.

This autumn, for the fifth time, the annual Finance for the Future Awards, now in partnership with Deloitte, will recognise and celebrate the role of the finance function as fulcrum, catalyst and instigator in the task of encouraging business performance and sustainability. It is all about going beyond the traditional silos of knowledge and resource and creating value as a result of a much more coherent and collaborative process. The early days of the Prince’s Project of putting together initial frameworks and bringing a growing number of CFOs into the fold to share ideas have expanded into a truly global presence.

Earlier this year, for example, A4S held a Summit in New Delhi in collaboration with the Indian Institute of Cost Accountants and CIMA.  The focus of the Summit was the role of finance leadership in delivering sustainable economic outcomes, expanding the work of A4S's CFO Leadership Network within India. ‘A4S’, said Jessica Fries, its Executive Chairman, ‘works with CFOs around the world to explore the leadership role that they can play to set a sustainable trajectory for businesses and economies. We see real innovation happening in different parts of the world to integrate social and environmental risk and opportunity with the strategy and decision making, and to explore how these issues can drive value.  The Network provides an opportunity to share the best approaches being adopted globally’. Case studies ranged from Hindustan Unilever and their integrated strategy, for example, using a focus on public health and water issues to deliver positive social impact and underpin the growth of health products, to suggestions from Tata on how to measure impact. 

Prior to the Summit, A4S held a Measure What Matters workshop as part of a three year project being undertaken in partnership with a number of other organisations.  The Measure What Matters project is exploring opportunities for business, governments and other stakeholders to collaborate in order to achieve the Global Goals for Sustainable Development, in particular focused on ways to close the data gaps that all organisations face when trying to measure areas such as natural, social and human capital.  The Global Goals, also called the Sustainable Development Goals, were agreed by the United Nations in September last year, setting out a series of ambitious goals to 2030.  'Unlike the Millennium Development Goals which they replace', said Jessica Fries, 'the Global Goals are seen as universal – relevant to every country across the world,  comprehensive, and inclusive – recognising the vital role that business, finance and civil society play in their achievement'.

The Measure What Matters workshop in New Delhi brought experts, business, governments, the not-for profit sector and the accountancy profession together. It stressed the need for collaboration between the business community and governments, both in terms of the role that business and government can play to deliver the goals, and partnership opportunities to measure progress.

One of the most important ways to share ideas globally is the Finance for the Future Awards. ‘This year we are raising awareness globally’, said Fries. ‘We will use the awards to showcase the leadership that will inspire other people to act on their example’. 

The strength of the Finance for the Future awards has been cumulative. Each year has seen the growing bank of case studies of best practice amongst the winners become an ever-larger and invaluable source of ideas, insights and simple how-to-do-it advice. In partnership with Deloitte the awards are now aiming for a global reach as A4S sets its sights on a global influence and networks.

It is all about spreading the word and sharing the experience. After all in such a field there are no borders. But at the same time, as the Prince of Wales continues to remind us, the world is still a small place with natural resources which are limited. And we all need to work within that conundrum, which is why a bank of best practice created through the awards process is so important and so is the work of organisations like A4S.

Click here for further information on the Finance for the Future Awards.

ICAEW responds to BIS proposals regarding implementation of the EU Non-Financial Reporting Directive

16 May, 2016

The Institute of Chartered Accountants in England and Wales (ICAEW) has issued its comment letter to the Department for Business Innovation and Skills’ (BIS) call for views on effective reporting alongside proposals to implement EU requirements relating to the Non-Financial Reporting Directive (NFR Directive).

BIS’ consultation document, ‘Call for views on effective reporting alongside proposals to implement EU requirements’, was issued in February 2016. In its comment letter, the ICAEW “commend BIS’s work in this area” however caution that “unnecessary or overly-frequent change is unhelpful for users and preparers, who prefer a strong degree of continuity and consistency in reporting.” The ICAEW’s principal recommendation is “the adoption of an approach to disclosure based consistently on an ‘to the extent necessary’ formulation” in order to avoid the inclusion of boilerplate information on non-financial reporting matters in the annual report. The ICAEW believe that there are no major obstacles preventing UK implentation of the Directive and favour an implementation approach “which maintains and builds on the existing UK narrative reporting regime.” In achieving the latter objective, the ICAEW suggest the following:

  • amending the existing strategic report requirements for quoted companies to comply with the requirements of the NFR Directive; and
  • extending those amended strategic report requirements to any entities that, while not quoted, are large undertakings and public-interest entities (PIEs) that have an average of more than 500 employees.

The ICAEW expresses concerns about the use of NFR Directive terminology in the BIS consultation document as this is likely to result in confusion within the UK, e.g. the reference to a ‘non-financial statement’. It also highlights that currently the Directive only applies to certain PIEs and recommend that BIS clarify the type of companies within the scope of the revised regime when it publishes its proposed amendments.

The full comment letter is available on the ICAEW website.

Correction list for hyphenation

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