June

June 2016 IASB meeting agenda posted

10 Jun, 2016

The IASB has posted the agenda for its next meeting, which will be held at its offices in London on 20 and 22 June 2016.

The meeting will feature  a joint session with the FASB to discuss the progress of the goodwill and impairment project. In addition, the IASB will discuss insurance contracts, conceptual framework, and IFRS implementation issues.

The full agenda for the meeting and first pre-meet­ing summaries can be found here. We will post any updates to the agenda, as well as the remaining pre-meet­ing summaries as well as observer notes from the meeting, on this page as they become available.

IFRS Foundation issues Formula Linkbase 2016

10 Jun, 2016

The IFRS Foundation has issued the 2016 IFRS Taxonomy Formula Linkbase. The Formula Linkbase is updated from the 2015 version; it is designed to help improve the data quality of IFRS Taxonomy filings and to provide additional guidance for both technical and financial reporting audiences so that they can better understand the IFRS concepts and their meanings.

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

IFRS Foundation Trustees hold May 2016 meeting

10 Jun, 2016

The IFRS Foundation Trustees met in Jakarta on 24–26 May 2016.

Meeting activities included the following:

  • Executive session — The Trustees discussed a number of important strategic issues:
    • Review of structure and effectiveness of the IFRS Foundation — The Trustees extensively discussed and concluded their review of structure and effectiveness of the IFRS Foundation (see separate news item).  
    • Agenda consultation — The Trustees were updated on the progress on the Board’s Agenda Consultation, in particular the key messages received from respondents and how these messages, as well as those received on the Trustees’ review, had been used to develop a draft work plan for the board for the period 2017-2021.
    • Presentation on IFRS in Indonesia — The Trustees received a presentation on the status of IFRSs in Indonesia.
    • Insurance contracts — The Trustees received a presentation on the forthcoming standard.
    • Other issues.
    • Committee reports — The Trustees discussed reports from the Audit and Finance Committee, the Education and Content Services Committee, the Human Capital Committee, and the Nominating Committee.
  • IASB Chairman’s report — The Chair of the IASB provided the Trustees with an update on a number of the IASB’s technical activities with special focus on the 2015 Agenda consultation and consistent application of IFRSs around the world.
  • Report of the Due Process Oversight Committee (DPOC) — The Trustees received a report about the DPOC’s May 2016 meeting. For more information, see our related news item.
  • Events in Jakarta — The report especially notes the stakeholder event and the signing of the joint agreement with Indonesian authorities.

The full report on the IFRS Foundation trustees’ meeting is available on the IASB’s website.

Trustees conclude 2015 Constitution review

10 Jun, 2016

The Trustees of the IFRS Foundation have concluded the 2015 review of structure and effectiveness of the IFRS Foundation that was officially launched on 7 July 2015 by publishing a request for views. As the Trustees were convinced that the last strategy review (2010-2012) already covered many issues that would be part of a constitution review, they limited the review to three strategic areas: Relevance of IFRS, Consistent application of IFRS, and Governance and financing of the IFRS Foundation.

On Relevance, the Trustees intend to accelerate work to address barriers to high-quality digital reporting by collaborating with investors, securities regulators and others to ensure the IFRS Taxonomy remains fit for purpose. They will also establish a network of experts to provide advice on technological innovation and its impact and relevance to IFRS Standards. The Trustees have also decided to retain the existing focus of the Board on for-profit entities, with no expansion at this time to cover either the public sector or the private not-for-profit sector.

Regarding Consistent application, there will be an increased emphasis on activities to support the consistent application, additional resources and materials will be developed to assist the consistent implementation, and the Trustees will continue to develop relationships with securities regulators to support implementation of IFRSs around the world.

Governance and financing will see no change to the current three-tier structure, but steps will be taken to enhance visibility of Trustee oversight of the Board. The geographical distribution of both the Trustees and the Board will be changed by combining the North American and South American allocations into a single ‘Americas’ category, and the size of the Board will be reduced to 13 members, with the flexibility to appoint a 14th member if appropriate. The Trustees will maintain the current funding model until the funding regime based on publicly supported financing is fully achieved.

The following additional information is available on the IASB website:

Due Process Oversight Committee holds May 2016 meeting

09 Jun, 2016

The Due Process Oversight Committee (DPOC) met in Jakarta on 25 May 2016.

Meeting activities included the following:

  • Updates on technical activities — The DPOC was presented with a report that outlined the due process activities for all projects on the IASB’s current agenda. Specifically, the DPOC discussed (1) the agenda consulation 2015 and specifically the proposal that the interval between agenda consultations should be extended from three to five years (the DPOC reviewed and agreed with the rationale behind the proposal and agreed to amend the Due Process Handbook), (2) the different effective dates of IFRS 9 and the forthcoming insurance contracts standard (the DPOC reviewed the due process steps and the re-exposure assessment and agreed with the IASB's conclusion that re-exposure was not necessary), and (3) other projects on primary financial statements and discount rates.
  • Insurance contracts: due process life-cycle review — The DPOC received a report setting out a lifecycle review of the due process steps completed in the Board’s project on insurance contracts. The DPOC confirmed that all necessary due process steps had been followed but emphasised that given the high profile of the project and controversial nature of at least some of the proposals there was a need for careful and considered drafting of the standard, which would involve preparing drafts for editorial review with external parties as well as preparing an extensive effects analysis.
  • IFRS Taxonomy: due process — The DPOC discussed a proposed change of the due process in the context of the Foundation’s strategy for the IFRS Taxonomy and the need to guard against the IFRS Taxonomy constraining the principle-based approach to standard-setting.
  • Should the DPOC meet in public? The DPOC discussed a staff proposal that in order to increase the visibility of how the Trustees’ oversight role was exercised, in particular in relation to due process oversight, future meetings of the Committee should – for the most part – be held in public session. The DPOC members expressed a range of views, and the debate was continued at the Trustees’ plenary session, where the proposal was supported.
  • Benchmarking — The DPOC discussed a staff paper that outlined the staff’s assessment of how the Foundation and the Board measured up against four particular frameworks that the staff viewed as relevant to the work of the organisation.
  • Review of Consultative groups — The DPOC reviewed the activities of various consultative groups and considered staff proposals for revising the membership of SMEIG.
  • Correspondence — No new correspondence has been received since the DPOC’s previous meeting.

The full report on the DPOC meeting is available on the IASB’s website.

EFRAG issues endorsement advice letter on amendments to IAS 12

08 Jun, 2016

The European Financial Reporting Advisory Group (EFRAG) has submitted to the European Commission its endorsement advice letter for the use of the amendments to International Accounting Standard (IAS) 12 ‘Income Taxes’ in the European Union (EU).

In January 2016 the International Accounting Standards Board (IASB) published Recognition of Deferred Tax Assets for Unrealised Losses (Amendments to IAS 12).  The objective of the amendments is to clarify the requirements on recognition of deferred tax assets for unrealised losses in order to address diversity in practice in the application of IAS 12 Income Taxes.

EFRAG supports the adoption of the amendments and recommends their endorsement.  EFRAG’s 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.

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

Click for (all links to EFRAG website):

EFRAG issues endorsement advice letter on amendments to IAS 7 under the IASB’s disclosure initiative

08 Jun, 2016

The European Financial Reporting Advisory Group (EFRAG) has submitted to the European Commission its endorsement advice letter for the use of the amendments to International Accounting Standard (IAS) 7 ‘Statement of Cash Flows’ in the European Union (EU).

In January 2016 the International Accounting Standards Board (IASB) published Disclosure Initiative (Amendments to IAS 7).  The objective of the amendments is to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes.

EFRAG supports the adoption of the amendments and recommends their endorsement.  EFRAG’s 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.

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

Click for (all links to EFRAG website):

Financial Reporting Lab call for participants for its Digital Future: Data project

08 Jun, 2016

The Financial Reporting Lab is calling for participants for its next project, Digital Future: Data, which will look at how the use of technology to communicate corporate reporting to the investment community might evolve.

The project will investigate:

How technology trends might drive future change in corporate reporting and provide opportunities for improvements in the access to, and analysis of, corporate reporting data; and

How transformation of reporting formats, potentially driven by regulatory change (such as the expected implementation of a European Single Electronic Format for corporate reporting by 2020), might be optimised for investors and companies. 

Participants are sought for the broader project.  Interested parties are also invited to take part in a short survey on Digital Future: Data.  The survey is open until 20 July 2016.  The FRC indicates that themes arising from the survey will be explored further as part of the project. 

It is expected that the Financial Reporting Lab will undertake work on the project during 2016 with initial results published at the end of the year. 

Further information including the press release is available on the FRC website.

EFRAG Board meeting June 2016

08 Jun, 2016

The European Financial Reporting Advisory Group (EFRAG) will hold a Board meeting on 16 June 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.

IOSCO issues final statement on non-GAAP financial measures

08 Jun, 2016

The International Organization of Securities Commissions (IOSCO) has finalised its guidance setting out IOSCO's expectations for issuers with respect to the presentation of financial measures other than those prescribed by Generally Accepted Accounting Principles (GAAP), so called 'non-GAAP financial measures'.

The IOSCO guidance is contained in the Statement on Non-GAAP Financial Measures, which sets out IOSCO's expectations for the presentation of such measures by issuers, including that sufficient information should accompanying non-GAAP financial measures to aid in their understanding, and that the measures should be presented transparently and with disclosure of how they are calculated.

Thestatement provides specific expectations in the following broad categories:

  • Defining the non-GAAP financial measure. This encompasses providing a clear explanation of the basis of calculation, clearly labelling measures such that they are distinguished from GAAP measures, explaining why the measures are useful, and explicitly stating the non-GAAP measure does not have a standardised meaning and may not be comparable between entities.
  • Unbiased purpose. This requires that non-GAAP financial measures should not be used to avoid presenting adverse information to the market.
  • Prominence of GAAP measures versus non-GAAP financial measuress. Non-GAAP measures and their most directly comparable GAAP measures should be presented with equal prominence, or the GAAP measure given greater prominence, and non-GAAP measures should not in any way confuse or obscure the presentation of GAAP measures.
  • Reconciliation to comparable GAAP measures. Reconciliations should be provided between non-GAAP financial measures and their most directly comparable GAAP measure presented in the financial statements, with adjustments explained and reconcilable to the financial statements, or information about how they are calculated provided.
  • Presentation of non-GAAP financial measures consistently over time. Measures should generally remain consistent from period to period, include comparative information, with any changes in composition explained and also reflected in comparative information and discontinued use of a non-GAAP measure sufficiently motivated.
  • Recurring items. Items that are reasonably likely to affect past and future periods, such as restructuring costs and impairment losses, should not be described as non-recurring, infrequent or unusual.
  • Access to associated information. The information that issuers provide regarding non-GAAP financial measures should be readily and easily accessible to third parties.

The statement is intended to be used by entities applying International Financial Reporting Standards (IFRSs) and other accounting principles.

Please click for (links to IOSCO website):

Correction list for hyphenation

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