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IASB member Amaro Gomes to lead EEG

29 Mar 2017

IASB member Amaro Gomes has been chosen to lead the Emerging Economies Group (EEG) of the IASB.

The position fell vacant after the death of Wayne Upton in 2016. Please click to see the new composition of the EEG on the IASB website.

Agenda for the April 2017 IFRS Advisory Council meeting

29 Mar 2017

An agenda has been released for the upcoming meeting of the IFRS Advisory Council, which is being held in London on 4–5 April 2017. The meeting will feature discussions financial stability and the IFRS Foundation, materiality, principles of disclosures, corporate reporting, and supporting the implementation and application of IFRS.

A summary of the agenda is set out below:

Tuesday 5 April 2017

Morning session (09:15-12:45)

  • Welcome and Chairman's preview
  • Financial stability and the IFRS Foundation
    • Break-out session
  • Board and IFRS Foundation activities

Afternoon session (13:45-15:15)

  • Members' com­mu­ni­ca­tions
  • Trustee ac­tiv­i­ties

Tuesday 6 April 2017

Morning session (09:30-12:45)

  • Feedback on financial stability break-out session and plenary discussion
  • Materiality practice statement
  • Better communications — Principles of disclosures
  • Developments in wider corporate reporting

Afternoon session (14:15-15:15)

  • Supporting implementation and application of IFRS Standards
  • Sum up dis­cus­sions

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

IASB issues 'Investor Update' newsletter

29 Mar 2017

The IASB has issued the twelfth edition of its newsletter 'Investor Update', which provides investors with quick access to information about current accounting and financial reporting topics.

This issue features:

  • An overview of proposed amendments to IFRS 8.
  • The usefulness of the new disclosures required in IAS 7.
  • Request for views on the Principles of Disclosure discussion paper, proposed amendments to IFRS 8, and primary financial statements.
  • Information on investor materials and current events.

The Investor Update newslet­ter is available on the IASB’s website.

IASB publishes proposed improvements to IFRS 8

29 Mar 2017

The International Accounting Standards Board (IASB) has published an exposure draft 'Improvements to IFRS 8 'Operating Segments' (Proposed amendments to IFRS 8 and IAS 34)'. It contains proposed amendments in five areas. Comments are requested by 31 July 2017.



In July 2013, the IASB completed the post-implementation review of IFRS 8 Operating Segments. The final report concluded that the benefits of applying the standard were largely as expected and that overall the standard achieved its objectives and has improved financial reporting. However, the IASB identified a number of issues that could be considered for improvement and that warranted further investigation. The IASB's subsequent discussions have now led to proposed clarifications and amendments around five issues one of which also regards IAS 34 Interim Financial Reporting.


Suggested changes

The amendments proposed in ED/2017/2 Improvements to IFRS 8 'Operating Segments' (Proposed amendments to IFRS 8 and IAS 34) are:

  • Description of the chief operating decision maker. The IASB proposes to clarify IFRS 8 by:
    • stressing that the chief operating decision maker is the function that makes operating decisions and decisions about allocating resources to operating segments and assesses their performance;
    • noting that the chief operating decision maker can be an individual or a group;
    • stating that a group identified as a chief operating decision maker can have non-executive members; and
    • requiring that an entity discloses the title and description of the role of the individual or the group identified as the chief operating decision maker.
  • Identification of reportable segments. Proposed amendments to IFRS 8 regarding this issue include:
    • requiring that an explanation of the reasons is disclosed if segments identified in the financial statements differ from segments identified in other parts of the entity's reporting; and
    • adding further examples to the aggregation criteria for operating segments with similar economic characteristics.
  • Additional segment information. The IASB believes that IFRS 8 should be clarified by:
    • noting that under certain circumstances an entity may disclose segment information that goes beyond the information regularly provided to and reviewed by the chief operating decision maker.
  • Description of reconciling items. Regarding this issue IFRS 8 would be amended by:
    • clarifying that sufficiently detailed explanations are required for the reconciling items so that users can understand their nature.
  • Change in the composition of an entity’s reportable segments. This proposed amendment regards IAS 34 where the IASB suggests:
    • requiring that the first interim report after a change in the composition of an entity’s reportable segments must contain restated segment information for all interim periods presented.


Effective date and transition requirements

The exposure draft does not contain a proposed effective date which the IASB intends to decide on after the exposure. Nevertheless, has already concluded that earlier application would be permitted, however, the amendments to IFRS 8 and the amendments to IAS 34 must be applied at the same time.


Additional information

Please click for:

EFRAG issues positive endorsement advice on IFRS 16

27 Mar 2017

The European Financial Reporting Advisory Group (EFRAG) has issued final endorsement advice for IFRS 16 ‘Leases’.

EFRAG assesses that the standard meets all technical en­dorse­ment criteria of the IAS Reg­u­la­tion. While some limitations with regard to relevance, reliability and comparability were identified, the EFRAG determined that they constitute “acceptable trade-off between the objective of achieving a complete and faithful representation of information on the one hand and reducing complexity of applying IFRS 16 on the other hand.” In addition, the EFRAG assesses that adopting the standard would be conducive to the European public good.

Please click to access the press release that offers access to the en­dorse­ment advice on the EFRAG website. EFRAG has also updated its en­dorse­ment status report, which can be down­loaded here.

The Bruce Column — The challenge of embedding integrated reporting in North American Business

27 Mar 2017

Bob Laux has been a stalwart of the US financial reporting scene for a long time, most recently leading the treasury controller group at Microsoft. Now he has taken up a new role, as North American Lead at the International Integrated Reporting Council. As he prepares for his task and the challenges ‘to ensure integrated reporting is at the heart of the business agenda in North America’ he has been talking about his plans to Robert Bruce, our regular, resident, columnist.

Bob Laux has long been a fixture at financial reporting conferences. He is a financial reporting guru. And then, a couple of years ago, at a panel event in Los Angeles he surprised everyone by saying he was ‘disgusted’ at the state of the accounting profession. He was saying it for effect. But he needed to shout loudly to draw his audience’s attention to his view that financial reporting in the US had become a rolling mass of infrastructure which didn’t really serve its users very well.

Earlier this year he joined the International Integrated Reporting Council as its North American Lead, with, as he puts it, a ‘goal of trying to make integrated reporting mainstream in North America’.

And when we talked recently, he talked about how ‘discouraged’ he was by his profession, the accounting profession. ‘We are a great profession but we can do better’, he said. ‘In the US we have periodic reporting, the 10Qs and 10Ks, and a tremendous amount of effort is put into those documents. There is a lot of infrastructure and controls on top of them. And day after day I would be saying to myself, is this it? Is this my contribution to this great profession we are in? And a lot of us think we can do better. It is a huge infrastructure. It is rules. It is a lot of disclosure, documents which run to well over a hundred pages that I don’t think too many people are reading and may be not their first source for investing’.

For him this giant infrastructure is ‘the big elephant in the room’. So how could he combat this massive obstacle? His answer is that ‘we are just going to have to be smart about it’. And that, for Laux, means integrated reporting, reporting based on the different capitals which underpin value creation of a company. ‘There are a lot of challenges’, he says, ‘but I am confident that now is the right time. We have been talking about this type of reporting for over two decades now. We have come a long way. But now is the time for action’.

In particular he feels that many others share this view. ‘Many people in business, investors and society generally feel that companies need to have a long-term view. We need to get out of our short-term mentality and in business the short-term mentality is the quarterly earnings game, and it’s just not productive. I think we all know that and we all need to come together and find a solution’.

And for him that solution is integrated reporting and the integrated thinking, of all the elements which make up corporate performance and value creation, which can open up a long-term, sustainable, view. It is a growing trend.

Last year the largest and most influential pension fund in the US, CalPERS, called on company boards to ‘provide an integrated report that puts historical performance into context and portrays the risks, opportunities and prospects for the company in the future’. He appreciates that companies can find the process of putting integrated reporting into place difficult. But he provides encouragement. ‘The good thing is that when you go through the exercise you start learning: this is what I need to do differently; this is how I need to think about a multi-capital view of the world; this is how I need to cut down on my silos; this is who I need to have in the room; this is how I can be clearer about my company’s strategy; this is how I can be clearer about execution on strategy’.

But he is also clear that it will be a mighty task. ‘I love being an accountant’, he said, ‘but we are difficult people to change. But we all want to do the right thing. That is why a lot of us became accountants’. Bringing about the cultural and attitudinal changes which will lead to integrated reporting being mainstream to North American business is a tough call. Laux understands that. But he sees it as being possible. ‘I’m excited’, he said. ‘I’m hopeful’.

IASB posts webcast on IFRS 16 lease modifications

27 Mar 2017

As part of the IASB webcast series on IFRS 16 implementation, the IASB staff has made available a webcast related to IFRS 16 lease modification requirements for lessees.

This webcast discusses modification requirements in IFRS 16 and implementation issues that have occurred.

The webcast is available on the IFRS 16 im­ple­men­ta­tion page on the IASB’s website.

While direct IPSAS and IFRS adoption remains low, most OECD country governments have adopted accrual accounting

27 Mar 2017

A new study by the International Federation of Accountants (IFAC) and the Organisation for Economic Co-operation and Development (OECD) has found that nearly three-quarters of OECD countries have adopted accrual accounting for their year-end financial reports. In 2003, only a quarter of the governments used accrual accounting.

The study was conducted from November 2015 to June 2016 among all of the (then) 34 OECD countries. Of those 34 countries, 25 countries (73%) base their annual financial reports on accrual accounting, and another three countries (9%) are currently transitioning to accrual accounting. Only six countries still use cash accounting.

The study also points out that while the direct adoption of international accounting standards, such as International Public Sector Accounting Standards (IPSAS) or International Financial Reporting Standards (IFRS), by national governments remains very low, almost 40% of the standard-setters use IPSAS (28%) or IFRS (9%) as primary or explicit references for developing their national standards.

The study 130 page study offers a short executive summary, a 15 page analysis of practices across all countries, and afterwards a detailed analysis of each country's accounting practice.

Please click to access Accrual Practices and Reform Experiences in OECD Countries on the IFAC website.

FRC Lab seeks feedback on the future Lab projects

24 Mar 2017

The Financial Reporting Council’s (FRC’s) Financial Reporting Lab (“the Lab”) is requesting views on its future direction and the next projects that it should undertake.

Feedback is requested via a short questionnaire.  As well as feedback on the Lab’s future direction, feedback is requested on the effectiveness of the projects that have already been completed to date and the effectiveness of its communications with stakeholders. 

Further details and the survey are available on the surveymonkey website here.

We comment on FRED 66 — Draft amendments to FRS 101 ‘Reduced Disclosure Framework’ 2016/17 Cycle

24 Mar 2017

We have published our comment letter on the Financial Reporting Council’s (FRC’s) Financial Reporting Exposure Draft (FRED) 66 ‘Draft amendments to FRS 101 ‘Reduced Disclosure Framework’ 2016/17 Cycle’.

We agree with the draft amendments to FRS 101.  We also believe that it would be helpful if the amendments could also address an issue arising from IFRS 9 Financial Instruments (whether recording fair value gains and losses attributable to changes in credit risk in other comprehensive income is still seen as a departure from the requirement of paragraph 40 of Schedule 1 to the Regulations, as previously indicated in the Accounting Council’s advice to the FRC on the 2014/15 Cycle of amendments) now that it has been adopted by the EU. 

Further comments and a full response to all questions raised in the invitation to comment are contained within the full comment letter.

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