BUFDG has amended its resources available to assist users of the SORP Accounting for further and higher education as set out below.

• The Model Financial Statements have been amended to clarify various presentation issues, principally in relation to capital grants; and
• A new conversion tool, which moves from current UK GAAP to FRS102 and demonstrates how each of the adjustments impacts the balance sheet, statement of comprehensive income, statement of equity and cash flow, has been made available.

Both of these documents are available from the dedicated SORP resources page of the BUFDG website, as is the BUFDG press release.

Sketching progress that has been achieved in the regulatory field after the global financial crisis, Mr Hoogervorst first pointed at the increased use of IFRSs around the world. This, he stated, has brought "tremendous benefits to the global economy in terms of transparency, accountability and efficiency". In terms of standard-setting he then mentioned the completion of IFRS 15 and IFRS 16 and the near completion of the new standard on insurance contracts. The completion of IFRS 9 he called the IASB's main response to the financial crisis.

Looking more deeply into IFRS 9 Financial Instruments, Mr Hoogervorst explained the new expected loss model that means that full lifetime losses will have to be recognised as soon as a significant increase in credit risk has taken place. He noted that implementation of the expected loss model will require considerable effort, particularly in jurisdictions where the banking system is suspected of harbouring a lot of problem loans. In these jurisdictions proper implementation of IFRS 9 could be a huge challenge for auditors, market and prudential regulators. He warned and encouraged his audience:

Expect to hear a lot of complaints, but stand resolute in your determination to do the right thing!

After discussing accounting, Mr Hoogervorst strayed beyond the remit of the IASB and offered his thoughts on audit, bank capital, leverage in the global economy, and unchartered waters in general.

Please click to access the full text of Mr Hoogervorst's speech on the IASB website.

In relation to accounting, corporate reporting, audit and corporate governance this means that the following considerations apply.

• For the foreseeable future, the requirements for use of IFRSs as endorsed for use in the European Union (including the need for endorsement of new standards before they can be applied) will not change.
• The legal requirements underpinning UK GAAP remain unchanged.
• There will be no impact on implementation of the EU audit reform changes, which came into effect for periods commencing on or after 17 June this year.

In a statement following the referendum vote to leave the EU, the FRC said that:

"Stakeholders have asked about the implications of the referendum result for our regulatory work. Our regulatory framework is unchanged and we will continue to apply it. The FRC will also continue to play its part in representing the interests of the UK internationally. We will pay close attention to the decisions now taken by the Government and Parliament, and continue to work in collaboration with our key stakeholders, particularly investors, business and the professionals we regulate, in order to ensure our work continues to support economic growth."

The full FRC statement can be obtained from their website.

Click here to access Deloitte's Governance in Brief publication 'The vote to leave' which examines key considerations for half year reporting.

Deloitte UK offers a website dedicated to the EU referendum and its result offering insight papers, perspectives and access to webinars on what this change can mean.

Sir Win Bischoff highlighted the work of the FRC in promoting good corporate behaviour through its Culture Coalition; a group of organisations containing the Chartered Institute of Internal Auditors (IIA), the Chartered Institute of Personnel and Development (CIPD), the Chartered Institute of Management Accountants (CIMA), the Institute of Business Ethics (IBE) and City Values Forum specifically focused on culture.  Sir Win Bischoff previously discussed the issue of corporate culture at a conference in March 2016.

Speaking at the Deloitte Forum, Sir Win Bischoff commented that “Nobody is in a position to develop a better feel for the culture of an organisation than its auditor.” He further stated that despite this not being a specifically prescribed duty for the auditor, it nevertheless “is a responsibility you may well agree you have towards investors.”

The full text of the speech can be obtained from the FRC’s website. 

Changes to the work plan include:

Major projects

• No changes made to major projects.

Im­ple­men­ta­tion projects

• Annual Improvements (2015-2017): Updated to indicate that a decision on the direction of the project is now expected within 3 months; previously it was within 6 months.
• Remeasurement at a Plan Amendment, Curtailment or Settlement / Availability of a Refund of a Surplus from a Defined Benefit Plan: Updated to indicate that a decision on the direction of the project is now expected within 3 months; previously it was within 6 months.
• Draft IFRIC Interpretation — Uncertainty over Income Tax Treatment: Updated to indicate that a decision on the direction of the project is now expected within 3 months; previously it was within 6 months.
• Draft IFRIC In­ter­pre­ta­tion — Foreign Currency Trans­ac­tions and Advance Con­sid­er­a­tion: Updated to indicate that a final interpretation is expected within 6 months; prviously it was after 6 months.

In addition, the work plan makes clear that exposure drafts on the definition of a business and on the remeasurement of previously held interests are to be expected next week since the work plan still states that these will come out in June (which ends next week).

Finally, the IASB has updated the details of the primary financial statements research project indicating that initial research will focus on:

• the structure and content of the statement(s) of financial performance;
• the potential demand for changes to the statement of cash flows and the statement of financial position; and
• the implications of digital reporting for the structure and content of the primary financial statements.

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

Specifically, the changes to the IFRS Taxonomy due process are:

• “[T]he Board will review and approve IFRS Taxonomy content where it reflects new or amended IFRS Standards.”
• “[A] newly established IFRS Taxonomy Review Panel of three-to-five Board members will review the IFRS Taxonomy common practice content.”
• “[T]he drafting and approval of each Proposed IFRS Taxonomy Update will take place at the same time that the related IFRS Standard is finalized.”
• “[T]he role of the IFRS Taxonomy Consultative Group will be formalised within the due process.”

The updated Due Process Handbook also incorporates an amendment approved by the DPOC to extend the interval between the Board’s Agenda Consultations from three-to-five years, a change proposed by the Board as part of its 2015 Agenda Consultation.

For more information, see the press release, feedback statement, and Due Process Handbook page on the IASB’s Web site.

The Directive entered into force on 20 July 2013 and was required to be implemented into the law of EU member states by 20 July 2015. It was aimed at reducing unnecessary and disproportionate administrative costs on small companies by simplifying the preparation of financial statements and reducing the amount of information required by small companies in the notes to financial statements. The Directive contains a significant number of member state options so that implementation can differ between member states.

The EFAA report focuses on whether the implementation has resulted in the creation of a harmonised European accounting framework. It reflects the results of an EFAA survey of its members in eight EU member states.

The report identifies some areas in which the countries surveyed have implemented the Directive in a similar way, in particular through the creation of a reduced disclosure regime for micro-entities. However, the main findings of the report point to the notable differences between member states’ implementation of the Directive. The report also highlights the lessened transparency of financial information about SMEs that is now available to the public as a result of reduced disclosure following implementation of the Directive.

Please click here to access the full report The New Accounting Directive: A Harmonised European Accounting Framework? on the EFAA website.

Please click through for direct access to the notes:

Monday, 20 June 2016

• Goodwill and impairment — progress reports (IASB-FASB meeting)

Wednesday, 22 June 2016

• Insurance contracts
• IFRS implementation issues
• Conceptual framework

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

The Directive entered into force on 20 July 2013 and was required to be implemented into the law of EU member states by 20 July 2015. The EFAA report focuses on whether this implementation has resulted in the creation of a harmonised European accounting framework. It reflects the results of an EFAA survey of its members in eight EU member states.

The report identifies some areas in which the countries surveyed have implemented the Directive in a similar way, in particular through the creation of a reduced disclosure regime for micro-entities. However the main findings of the report point to the notable differences between member states’ implementation of the Directive. The report also highlights the lessened transparency of financial information about SMEs that is now available to the public as a result of reduced disclosure following implementation of the Directive.

Please click here to access the full EFAA report - The New Accounting Directive: A Harmonised European Accounting Framework? 

Please click here to access Deloitte's Closer Look publication on the UK implementation of the EU Accounting Directive.