May

FRC comment letter on the Phase 1 Report of the TCFD into reporting of climate related risks

04 May, 2016

The Financial Reporting Council (FRC) has published a comment letter on the Task Force on Climate-Related Disclosures (TCFD)’s Phase 1 Report into the reporting of climate related risks by companies.

The FRC welcome the steps taken by the TCFD to ensure that adequate consideration is given to the assessment of and reporting on the impacts of climate change. The FRC believes that the disclosure recommendations should apply to both financial and non-financial companies and stress that any disclosure recommendations made should be flexible to enable a company “to tell its story”. In order to not detract from the key messages in the annual report, the FRC encourage the TCFD to consider the placement of information outside the annual report when recommending disclosures that “might go beyond the needs of the annual report’s intended audience.”

Despite welcoming the steps taken by the TCFD, the FRC expresses concerns about the length of the consultation period and the ability of stakeholders to respond in a “considered and meaningful way”. This is particularly important given the fact that consideration of climate risks is still at the stage of breaking into mainstream business dialogue with few examples of good practice to date.

 The full comment letter is available on the FRC website.

EFRAG publishes April 2016 issue of 'EFRAG Update'

03 May, 2016

The European Financial Reporting Advisory Group (EFRAG) has published an 'EFRAG Update' summarising public technical discussions held and decisions made during April 2016.

The Update reports on the EFRAG Technical Expert Group (EFRAG TEG) meeting on 28 - 29 April.  The Update also lists EFRAG publications issued in April:

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

EFRAG Board meeting May 2016

03 May, 2016

The European Financial Reporting Advisory Group (EFRAG) will hold a Board meeting on 13 May 2016 in Brussels.

An agenda with supporting papers and details on how to register for the public meeting can be found on the EFRAG website.

IASB posts webcast featuring Sue Lloyd on IFRS 16 exemptions

03 May, 2016

As part of the IASB's webcast series on IFRS 16 implementation, the IASB staff has made available a webcast on recognition exemptions for lessees, featuring IASB board member Sue Lloyd.

The webcast discusses the IFRS 16 requirements relating to the recognition exemptions and provides Ms. Lloyd's insight on the scope exemptions, practical examples, and implementation information.

The new webcast and all previous webcasts of the series available on the IFRS 16 implementation page on the IASB’s website.

ECON report criticises current accounting standard-setting

03 May, 2016

The Committee on Economic and Monetary Affairs (ECON) of the European Parliament has initiated a report that is rather critical of the activities of the IFRS Foundation, EFRAG and the PIOB. The report will not be legally binding but will possibly be voted on in a plenary session of the European Parliament in May and if agreed will be used as guidance and reference in future EU law-making processes.

The report stresses that ECON members see shortcomings in the governance of the IFRS Foundation and the IASB, notably in terms of transparency, prevention of conflicts of interest and diversity of Board members. The report also calls for also a more diversified and balanced financing structure also based on fees and public sources. The report's authors feel that their position is backed by the high degree of funding of the IASB's budget (14%) and of EFRAG (60%) by the European Union and conclude that this means that both organisations have to follow the European Parliament standards of democratic legitimacy, transparency, accountability and integrity.

The following documents are publicly available (all on the European Parliament website):

Economic consequences of disclosure and financial reporting regulation

02 May, 2016

New joint research from the University of Chicago and the University of Miami suggests that further research into market-wide effects and externalities from regulation is still needed.

A new paper published in the Journal of Accounting Research looks into the economic consequences of disclosure and financial reporting regulation (including IFRS adoption), drawing on U.S. and international evidence. The authors highlight the challenges with quantifying regulatory costs and benefits, measuring disclosure and reporting outcomes, and drawing causal inferences from regulatory studies, but come to the following conclusions:

  • There is a general lack of evidence on market-wide effects and externalities from regulation even though such evidence is central to the economic justification of regulation.
  • Evidence on causal effects of disclosure and reporting regulation is still relatively rare.
  • There is also a lack of evidence on the real effects of such regulation.

The article concludes with several specific suggestions for future research. It can be downloaded (for a charge) through the Wiley Online Library or accessed free of charge through SSRN.


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