June

EFRAG to celebrate 15th anniversary

17 Jun, 2016

On 6 July 2016, the European Financial Reporting Advisory Group (EFRAG) will hold a celebration event and seminar to mark its 15th anniversary and welcome its new leadership: the incoming EFRAG Board President Jean-Paul Gauzès and Andrew Watchman, EFRAG TEG Chairman and CEO.

Programme highlights include:

  • Welcome speech by Andrew Watchman, EFRAG TEG Chairman
  • Keynote speech by Commissioner Jonathan Hill
  • Round-Table: Developing effect analyses for IFRS
    • Facilitated by Claes Norberg, EFRAG Board with participation of
    • Hans Hoogervorst, IASB;
    • Erik Nooteboom, EC;
    • Kris Peach, AASB;
    • Patrick de Cambourg, ANC;
    • Joachim Gassen, Professor at Humboldt University Berlin;
    • Vickie Wood, UK representative at ARC
  • Round-Table: Financial reporting by small listed companies
    • Facilitated by Olivier Boutellis-Taft, FEE with the participation of
    • Michel Prada, IFRS Foundation;
    • Roger Marshall, EFRAG Board;
    • Peter Malmqvist, Swedish Society of Financial Analysts;
    • Andrew Watchman, EFRAG
  • Closing speech by Jean-Paul Gauzès, incoming EFRAG Board President

IAS Plus representatives have been invited to attend the event and we will provide you with notes from the discussions afterwards.

The Bruce Column — Keeping a clear view of the heart of corporate reporting

17 Jun, 2016

Enabling investors to see and understand the heart of corporate reporting is a difficult task, says Robert Bruce, our resident and regular columnist. Being able to see the wood for the trees depends on keeping a firm focus on the financial heartland of reporting.

It is a question of hearing the essentials through the surrounding noise. It is being able to see the wood for the trees. This is the essential task of corporate reporting. People want to home in on exactly what is most important to them in their understanding of how a business is doing and how it has done it. It is about providing those who need it with the information they need. 

And put like that it is simple. Yet regulators, auditors, accountants, CFOs, standard-setters, investors and that elusive group, the informed public, have struggled with it and puzzled over it for generations. Yet here we are still wrestling with the nature and needs of corporate reporting. The latest thinking from FEE, the Federation of European Accountants, represents yet another brave effort to solve the conundrum. It proposes the idea that companies should produce information in two sections, the essential ‘CORE’, as FEE puts it, and ‘MORE’, which would be the detailed information.

FEE comes from the familiar position of not being sure how technology will change the game in the near future and knowing that many more people are coming to see themselves as part of a much wider audience than the traditional band of shareholders, potential investors, lenders and capital providers. This is where the users of non-financial information, and those who see societal pressures other than the strictly financial ones having as much of an effect on how a company’s strategy and business model pans out, reside. Hence the focus on change, momentum and a wide panorama of corporate connections which would sit, in FEE’s model, in the CORE & MORE.

It is, to revert to the traditional arguments, an attempt to reconcile the analyst dilemma. Analysts will argue that they want to be provided with the essential kernel of a corporate story. And they will also argue that they would like a huge mass of undifferentiated information which they can slice into to find the kernel themselves. Trying to put both sides of these desires into one document has always proved problematic.

And change over the last generation or so has altered the focus. In the days when tangible assets made up the overwhelming majority of the corporate story the financial information stood proud. Now, when intangible assets are in the majority, it is no surprise that concepts like integrated reporting seek to make sense of the wider range of corporate drivers and information. 

But at the heart of all this change remains the fundamental of an annual report providing what investors need. This is where the noise is filtered out, the wood itself identified, the data filleted. And the way that annual report is configured and how the assurance which gives it credibility is attained is where the focus still needs, narrowly, forensically and clearly, to be applied. 

ESMA publishes its 2015 annual report

16 Jun, 2016

The European Securities and Markets Authority (ESMA) has published its Annual Report for 2015, which describes key mission and objectives and achievements against its objectives by the ESMA in 2015.

The main objectives for ESMA were

  • Investor protection - to have the needs to financial consumers better served and to reinforce their rights as investors while acknowledging their responsibilities;
  • Orderly markets - to promote the integrity, transparency, efficiency, and well functioning of the financial markets and robust market infrastructure; and
  • Financial stability - to strengthen the financial system in order to be capable of withstanding shocks and the unravelling of financial imbalances while fostering economic growth.

The four activities that help ESMA achieve these objectives are convergence, risk monitoring and analysis, single rule book and supervision

For more information, see the 2015 Annual report in the ESMA's website.

New appointment to the Financial Reporting Review Panel of the FRC

16 Jun, 2016

The Financial Reporting Council (FRC) has announced the appointment of John Hitchins, as Deputy Chair of its Financial Reporting Review Panel (FRRP).

John will take up the position with effect from 1 June 2016.  The press release can be found on the FRC website, here.

Agenda for the July 2016 ASAF meeting

16 Jun, 2016

The International Accounting Standards Board (IASB) has released an agenda for the meeting of the Accounting Standards Advisory Forum (ASAF), which is to be held at the IASB's offices in London on 7-8 July 2016.

The agenda for the meeting is sum­marised below:


Thursday, 7 July 2016 (11:30-18:00)
  • Conceptual framework:
    • Liabilities — Concepts to support the liability definition.
    • Recognition — Low probability of a flow of economic benefits.
  • Financial instruments with the characteristics of equity.
  • Disclosure initiative — Materiality practice statement — Identification of primary users, their information needs and expectations as well as the judgement process.
  • Primary financial statements:
    • Scope.
    • Statement of cash flows — Discussion of the FRC staff paper on the statement of cash flows.


Friday, 8 July 2016 (9:00-14:45)

  • 2015 agenda consultation — Draft work plan and strategy.
  • Quantitative study on goodwill and impairment — Review of results from research by the Accounting Standards Board of Japan and European Financial Reporting Advisory Group.
  • Amendments to IAS 8 — Distinction between changes in accounting policies and changes in accounting estimates.
  • Project updates and agenda planning.

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

IFRS Foundation appoints new SME Implementation Group members

15 Jun, 2016

The IFRS Foundation has announced the appointment of eleven new members to the SME Implementation Group. The appointments will begin on 1 July 2016.

New appointments include:

Ago Vilu Estonia Country Managing Partner, PricewaterhouseCoopers
Bee Leng Tan Malaysia Executive Director, Malaysian Accounting Standards Board
Carlos Manual Llobet San Nicolas Venezuela Partner, Llobet, Lugo & Associados
Daniel Sarmiento Pavas Colombia Consejero, Consejo Tecnico de la contaduria publica
Kelly Wayne Karmazin United States Partner, Seim Johnson LLP
Marta Cristina Pelucio Grecco Brazil Managing Partner, Praesum International Accounting
Paul Thompson Global Director, Global Accountancy Profession Support, International Federation of Accountants
Rakesh Latchana Guyana Partner, Ram & McRae
Raymond Betserayi Chamboko Zimbabwe and South Africa Director and Head of Advisory, W Technical Consulting SA
Ulla Stenfors Sweden Accounting Expert, Swedish Accounting Standards Board
Wayne Robert Twigg South Africa Managing Member, Twigg

For more in­for­ma­tion, see the press release on the IASB's website.

The Bruce Column — Putting principles into their future context

15 Jun, 2016

The decade since the publication of the report advocating an emphasis on principles rather than rules in standard-setting and corporate reporting has seen the concept grow in stature. Our regular, resident, columnist, Robert Bruce, reports on a round-table which assessed and clarified the legacy of the report and looked ahead to its likely future influence.

It is ten years since the Institute of Chartered Accountants of Scotland published the report Principles Not Rules: A Question of Judgement. It argued that the global convergence of accounting standards, essential to both the public interest and the needs of business worldwide, could not be achieved through a detailed rules-based approach. Only a principles-based approach could provide regulators, preparers, auditors and investors with a workable system which would inspire trust and engender integrity. This approach would emphasise judgement over a blind following of the rulebook. As the working group said a decade ago: ‘It is necessary to recognise that complete comparability is never possible in accounting. More emphasis needs to be placed on explaining the key judgements made by preparers of financial statements. This is critical to effective communication in financial reporting’.

Ten years on the philosophical battle is probably won. The means of putting it fully into place are complex and much argued about. And the whole process has created new opportunities for ways forward. This became clear at an event organised by ICAS and held at the Deloitte Academy in central London. As Veronica Poole, Deloitte’s Global IFRS Leader pointed out, it was always easier to defend judgements based on principles than a position based on compliance with the rules. The nature of a judgement was that people could disagree with it and therefore it had made explaining how you got to those judgements much more important. And as another participant, Jane Fuller of the Centre for the Study of Financial Innovation, put it there was a need for rational assessments of judgement, and the practice of documenting professional judgement had become just good practice. Though she also said there was ‘still too much of the “I obeyed the rules” arguments. 

Ian Mackintosh, the outgoing deputy chairman of the IASB, emphasised the importance of the IASB’s new disclosure initiative which would focus minds on the objective of disclosure and underlying principle rather than providing people with a check-list. This, he said, would help fight any tendency to develop a check-list mentality. The chair of the event, non-executive director Mike McKeon, said that if we wanted to see how the introduction of an overriding principle could change practice all we needed to do was look at how the Financial Reporting Council’s introduction of the principle that annual reports had to provide a ‘fair, balanced, and understandable’ representation of a business had fundamentally changed UK practice. ‘All of this changed the landscape completely’, he said. And that had meant further changes in precisely what reports should be doing. ‘The dialogue is shifting from what is in the financial statements to what should be in the financial statements’, said Poole. And there was now a wider audience to satisfy. The growth of such concepts as integrated reporting, which brought many other drivers of a corporate strategy than simply the financial figures into play, was one example. Stewardship and prediction of future cash flows could no longer be viewed through one lens. ‘The dialogue is moving rapidly on from what should be in the financial reporting to how relevant is the financial reporting anymore? ’, she said. Backing up the view that the emphasis on principles had changed the thinking Paul Druckman, outgoing CEO of the International Integrated Reporting Council, said that in the UK the core principle of ‘fair, balanced and understandable’ underlined the view that the principle of balanced reporting now covers more than just the financial data. And he urged standard setters to think through the concepts of both hard and soft legislation and focus on the underlying principle.

Whether the world has changed because the principles not rules debate opened things up a decade ago or whether the debate simply caught the zeitgeist doesn’t really matter. The debate over the nature of corporate reporting is a much more fluid affair these days.

EFRAG issues 2015 annual report

15 Jun, 2016

The European Financial Reporting Advisory Group (EFRAG) has published its 2015 annual report.

This publication includes reports from the acting EFRAG Board President Roger Marshall and the TEG Chairman and CEO Françoise Flores as well as contributions on exercising thought leadership, bringing the European view into the IASB standard-setting process, providing endorsement advice, and on better understanding investors’ needs.

The report is available on the EFRAG website.

IASB posts webinar on principles of disclosure project

14 Jun, 2016

The IASB has posted a webinar that provides an overview of the disclosure initiative and discusses the upcoming discussion paper on principles of disclosures, which is expected to be issued by the end of 2016.

The webinar is hosted by the IASB’s senior technical manager Suzanne Morsfield and assistant technical manager Arjuna Dangalla.

For more in­for­ma­tion, see the webinar page on the IASB’s website.

IFRS conference in Nairobi announced

13 Jun, 2016

The IFRS Foundation has announced an IFRS conference in Nairobi on 24-26 August 2016. The conference will be hosted jointly by the IFRS Foundation, the Pan African Federation of Accountants (PAFA), and the Institute of Certified Public Accountants of Kenya (ICPAK). As pre-conference programme there will be a workshop on the IFRS for SMEs.

The conference itself will cover the following:

  • Speech by IASB Chairman Hans Hoogervorst on the future of financial reporting
  • Key note address
  • IASB update
  • Break-out sessions on implementing new IFRSs (IFRS 9 IFRS 15, Agriculture)
  • Panel discussion on IFRS application issues
  • Break-out sessions on IASB projects:
    • Disclosure initiative
    • Conceptual Framework
    • Extractive activities
  • Break-out sessions on IFRS application issues:
    • Implementing IFRS 16 Leases
    • IFRS regulatory issues
    • Rate-regulated activities
  • Coping with disruptive technology and information overload

More details are available on the IASB website.

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