July

IFRS 17 webinar for investors

21 Jul, 2017

The IASB has made available a recording of a webinar held jointly by the IFRS Foundation and the Canadian Accounting Standards Board on IFRS 17 in July 2017.

The webinar was tailored to investors and covered the following questions:

  • Why IFRS 17 was developed?
  • How does IFRS 17 work?
  • What are the benefits of IFRS 17?

There is also a section with answers to questions submitted by investors during the webinar.

Please click to access the webinar through the press release on the IASB website.

July 2017 IASB meeting notes posted

20 Jul, 2017

The IASB met at its offices in London on 18 and 19 July 2017. We have posted our comprehensive Deloitte observer notes for all projects discussed during the meeting.

On Tuesday, the meeting started with positive feedback on outreach the IASB staff have undertaken with investors and analysts in relation to the recently issued IFRS 17 Insurance Contracts. The Board decided to proceed towards finalisation of two of the proposed amendments included in the Annual Improvements to IFRS Standards 2015–2017 Cycle related to IAS 12 Income Taxes and IAS 23 Borrowing Costs. The Board asked the staff to undertake more research on a possible amendment to IFRIC 14 IAS 19—The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction.

The day finished with a session on Disclosure Initiative: Materiality Practice Statement. The Board decided to remove two paragraphs and an example relating to the impact of covenants on the materiality of other information.

On Wednesday, The Board decided to finalise the amendments the proposed amendment to IFRS 9 on prepayment features with negative compensation and, as part of that package, to highlight in the Basis for Conclusions the relevant accounting requirements for a modification of financial liabilities that does not result in derecognition. The amendments will have an effective date of 1 January 2019, rather than the originally proposed 1 January 2018, with earlier application permitted.

The remaining sessions were educational in nature. The Board continued its discussions on rate-regulated activities, focusing on control and matching; and recognition and uncertainty. It also discussed possible revisions to the assessment of goodwill impairment, mainly focusing on feedback from outreach. No decisions were made in these education sessions.

It was Stephen Cooper’s final Board meeting.

Please click to access the detailed notes taken by Deloitte observers for the entire meeting.

FRC publishes annual report 2016/17

20 Jul, 2017

The Financial Reporting Council (FRC) has published its 2016/17 annual report (“the annual report”).

The annual report outlines the FRC’s financial position, highlights achievements and challenges in 2016/17 and also identifies areas that it will focus on in 2017/18. The annual report also outlines the progress made in the FRC’s strategy for 2016-19.

In 2017/18 the FRC will aim for “further improvements in governance, reporting, auditing and actuarial work, which will contribute to increased trust and confidence in business”. 

Specifically the FRC’s priorities for 2017/18 include:

  • Driving further improvements in the quality of audit, including through a thematic review of audit firm culture
  • A comprehensive review of the UK Corporate Governance Code and promotion of its work on corporate culture. Also a review of the UK Stewardship Code.
  • Promotion of Clear and concise reporting by companies, including through a Financial Reporting Lab project on reporting of principal risks and viability statements.
  • Enhancing the speed and effectiveness of its enforcement role, including a review of its sanctions.

Click for (all links to FRC website):

EFRAG TEG meeting July 2017

20 Jul, 2017

The European Financial Reporting Advisory Group (EFRAG) will hold a TEG meeting on 26 and 27 July 2017 in Brussels.

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

Illustrative tagging for IFRS 17

19 Jul, 2017

The IFRS Foundation has published illustrative tagging for the proposed IFRS Taxonomy update regarding IFRS 17 'Insurance Contracts'.

The illustrative tagging shows how selected information from the Illustrative Examples accompanying IFRS 17 could be tagged using the IFRS Taxonomy Update that was proposed together with the issuance of IFRS 17 on 18 May 2017 and is currently expected to be published in the fourth quarter of 2017.

The illustrative tagging is available through the IASB's supporting material section of the Taxonomy Update project page.

HLEG questionnaire on interim report

19 Jul, 2017

In mid-July, the High-Level Expert Group (HLEG) on Sustainable Finance, established by the European Commission, published a first report setting out concrete steps to create a financial system that supports sustainable investments. The HLEG has now launched a questionnaire aimed at gathering targeted feedback on the analysis and reflections in the interim report and informing the preparation of the final report.

This questionnaire on the report is open from 18 July 2017 through 20 September 2017. It can be accessed here.

ESMA sees room for improvement in the supervision of the enforcement of financial information

19 Jul, 2017

The European Securities and Markets Authority (ESMA) has published the results of a review of the supervision of the enforcement of financial information (IFRS) according to the ESMA Guidelines on enforcement of financial information in the EU member states.

The report identifies that further improvements are needed in relation to:

  • how issuers are selected to examine their financial information;
  • the depth of inquiries into financial statements going beyond correcting disclosure; and
  • the financial and human resources allocated to the enforcement of financial information.

The report also notes that five of the jurisdictions – Malta, Portugal, Romania, Sweden, and UK – do not fully comply with the fifth of the final guidelines, which requires that use selection models in which all issuers are eligible to be selected for scrutiny.

Please click for additional information on the ESMA website:

CIPFA issues questionnaire on IFRS 9

18 Jul, 2017

The Chartered Institute of Public Finance and Accountancy (CIPFA) has issued a questionnaire on the impact of the classification of financial assets and the new impairment requirements under IFRS 9 ‘Financial Instruments’.

The 2018/19 Code of Practice on Local Authority Accounting in the UK will adopt IFRS 9.  The approach to the adoption of IFRS 9 was detailed by CIPFA/LASAAC as part of their consultation for the 2017/18 Code.  The agreed position is set out in a separate publication – Forthcoming Provisions for IFRS 9 Financial Instruments and IFRS 15 Revenue from Contracts with Customers in the Code of Practice on Local Authority Accounting in the United Kingdom 2018/19.

Respondents to the consultation on the 2017/18 Code raised the issue of the impact of IFRS 9 on General Fund balances as a result of the new classifications.  CIPFA and the Local Authority (Scotland) Accounts Advisory Committee (LASAAC) are seeking the advice of CIPFA’s Treasury and Capital Management Panel.  In order to inform the Treasury and Capital Management Panel’s analysis on the topic of the impact of the classification of financial assets and the new impairment requirements under IFRS 9, a questionnaire has been issued for interested parties to complete.  The questionnaire also seeks views on the expected credit loss model under IFRS 9.

Responses are requested by 8 September 2017.

The press release is available on the CIPFA website.

IASB announces fourth research forum

18 Jul, 2017

The International Accounting Standards Board (IASB) will host its fourth Research Forum on 28 and 29 November 2017 in Brussels.

The objective is to have 50 academic participants and 50 non-academic participants. The European Accounting Association (EAA), co-host of the forum, has issued invitations to academics and has issued a call for papers. The IASB is now calling for people with backgrounds other than academia to express their interest in attending the event.

Please click for more information and registration on the IASB website.

ESMA comment letter on the IASB’s Exposure Draft on proposed improvements to IFRS 8

18 Jul, 2017

The European Securities and Markets Authority (ESMA) has issued its comment letter on the IASB’s Exposure Draft, ‘Improvements to IFRS 8 'Operating Segments' (Proposed amendments to IFRS 8 and IAS 34)'.

ESMA is supportive of the proposed amendments and particularly welcomes the IASB’s proposal to stress that the chief operating decision maker (CODM) is the function that makes operating decisions, makes decisions about allocation of resources to operating segments and assesses their performance.  However ESMA suggests that the IASB “clarifies how to address situations in which the CODM may differ from the decision maker in charge of the allocation of resources”. 

ESMA also supports the proposals that would require disclosure of the reasons for any differences between segments identified in the financial statements and segments identified in other parts of the entity's ‘annual reporting package’.  However ESMA recommends that the International Accounting Standards Board (IASB) does not provide a definition of ‘annual reporting package’ but instead refers to the terminology already adopted in paragraph B88(a) of IFRS 15 Revenue from Contracts with Customers.

Additionally ESMA is expresses concerns over the proposed wording of the new paragraph 20A and suggests that the wording is reconsidered by the IASB.

The full comment letter is available on the ESMA website.

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