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Annual ECON exchange of views with Hans Hoogervorst and Michel Prada

19 Mar 2018

At the annual exchange of views this afternoon between the Committee on Economic and Monetary Affairs (ECON) of the European Parliament and representatives of the IASB and the IFRS Foundation, IASB Chairman Hoogervorst and Michel Prada, Chairman of the IFRS Foundation Trustees, stand ready to answer questions of the Parliamentarians.

The meeting will be broadcast live and can be watched in any of the official languages of the European Union. The exchange of views is scheduled for the first slot starting at 3pm Brussels time.

Click here to watch the meeting.

ACCA issues follow up report on integrated reporting and indicates there are broader benefits to be reaped

16 Mar 2018

The Association of Chartered Certified Accountants (ACCA) has published a second report providing its latest assessment of integrated reporting.

The report, which is a follow up to the 2017 report Insights into Integrated Reporting – Challenges and best practice responses, analyses 45 corporate reports by participants in the <IR> Business network. It identifies a number of benefits of Integrated Reporting, identifies the progress made in Integrated Reporting and provides practical insights for improvement and development to those both yet to adopt integrated reporting and those which have already done so.

The report highlights that there has been “striking progress” in the quality of integrated reports over the past year. Notable improvements include:

  • A greater commitment to Integrated Reporting through making explicit reference to the <IR> Framework.
  • An increasing use of consistent performance measures from year to year.
  • A reduction in the average length of reports.

Despite the improvements, however, the ACCA also identifies a number of challenges that organisations continue to face in their integrated reporting such as:

  • the linking of strategy and performance through to key resources and value creation over the short, medium and long term;
  • the description of the board's role in enabling value creation; 
  • discussions about the organisation's outlook; and
  • the application of materiality.

According to the ACCA, to solve these challenges preparers will need to “think beyond reporting practice, about organisation management” and embed integrating thinking into their internal decision-making processes.

The report highlights the wider benefits both internal and external that <IR> network participants experienced as a result of adopting or progressing towards the adoption of Integrated Reporting. The most widely reported benefits were internal such as having a better understanding of how an organisation creates value and better connections between departments within an organisation. Participants also noted external benefits most notably in the area of stakeholder engagement, for example with providers of capital.

The report indicates that implementing integrated thinking throughout an organisation can unlock further benefits and provides a number of questions that organisations should consider in order to benefit fully from integrated reporting and integrated thinking. Although this will require organisational change, the ACCA comments that the “benefits make this effort worthwhile – as the organisations quoted in this report can testify”.

The press release and full report are available on the ACCA website.

EFRAG Board meeting March 2018

16 Mar 2018

The European Financial Reporting Advisory Group (EFRAG) will hold a Board meeting on 20 March 2018 in Brussels.

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

2018 IFRS XBRL taxonomy issued

16 Mar 2018

The IFRS Foundation has issued its 2018 IFRS Taxonomy. The IFRS Taxonomy is a translation of IFRSs (International Financial Reporting Standards) into XBRL (eXtensible Business Reporting Language).

The IFRS Taxonomy 2018 is consistent with IFRSs as issued by the IASB at 1 January 2018 and incorporates amendments made to the IFRS Taxonomy 2017 such as: (1) Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts (Amendments to IFRS 4), issued in September 2016, (2) IFRS 17 Insurance Contracts, issued in May 2017, and (3) Prepayment Features with Negative Compensation (Amendments to IFRS 9), issued in October 2017.

The IFRS Foundation has also published the IFRS Taxonomy Update — Annual Improvements and the IFRS Taxonomy Update — Prepayments Features with Negative Compensation (Amendments to IFRS 9). The IFRS Taxonomy 2018 incorporates the changes resulting from these two updates.

For more information, see the press release and the IFRS Taxonomy 2018 page on the IASB's website.

IFRS Foundation seeks Trustee nominations

16 Mar 2018

The IFRS Foundation announces that it is seeking applications for the role of Trustee.

The IFRS Foundation are seeking three Trustees: one from Asia Oceania, one from Africa and one "at large". Trustees’ responsibilities include oversight of the organisation in the public interest, its strategic direction, appointments to the Board, the IFRS Interpretations Committee and the IFRS Advisory Council, and ensuring the financing of the organisation and approving its budget. The role description notes:

Qualified candidates should have top-level experience in an organisation with an interest in accounting standards. They should demonstrate a firm commitment to serving the public interest, to the work of the Foundation and to the Board as a high quality global standard-setter. They should be financially knowledgeable and be able to meet the time commitment, which includes, but is not limited to, up to four two-day meetings each year. Trustees should have an understanding of, and be sensitive to, the challenges associated with the adoption and application of high quality global accounting standards developed for use in the world’s capital markets and by other users.

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

AOSSG updates report on Islamic financial transactions under IFRS

16 Mar 2018

In 2010, the Islamic Finance Working Group of the Asian-Oceanian Standard-Setters Group (AOSSG) conducted research into Islamic financial transactions under IFRS and published a paper examining and explain the issues in applying IFRS to Islamic financial transactions. In 2017, the working group decided to update the paper to understand the current status of the issues examined in the original report. The updated report is now available.

The updated report notes that the 15 issues identified in the 2010 paper remain relevant for discussion within the current context. Although the issues are quite distinct to Islamic financial transaction, the updated report suggests that they can be addressed within IFRS. However, the updated conclusion stresses:

Accounting for Islamic financial transactions requires judgment about facts and circumstances and should not be made based on contract names.

The report also notes that the Working Group plans to have a separate discourse on the application of IFRS 9, IFRS 15, IFRS 16, and IFRS 17 to specific Islamic financial transactions:

Application of IFRS to Islamic financial transactions is an ongoing agenda item as IFRS Standards evolve over time. The “Big Four” Standards – IFRS 9, IFRS 15, IFRS 16 and IFRS 17 – may pose challenges to Islamic financial reporting. For this reason, there need to be a collective effort to apply IFRS in a consistent manner and to improve understanding of the Standards, without compromising Shariah tenets.

Please click to access the updated report on the AOSSG website.

Webinar on the presentation of amalgamations in IPSAS 40

16 Mar 2018

In February 2017, the International Public Sector Accounting Standards Board (IPSASB) released IPSAS 40 'Public Sector Combinations'. The Standard applies from 1 January 2019 with earlier adoption encouraged. The IPSASB has now released a video intended to help users understand the requirements regarding amalgamations in IPSAS 40.

IPSAS 40 uses the modified pooling of interests method of accounting for amalgamations. Because this approach does not require comparative figures to be restated, the presentation requirements may be different from other versions of the pooling of interests method that entities have used previously.

Please click to access the short video (11 minutes) on the IPSASB website.

IASB updates March 'Investor Update' newsletter

16 Mar 2018

The IASB has re-issued the fifteenth edition of its newsletter 'Investor Update', which had been originally published on 2 March.

The issue now features:

  • Spotlight — Timing and amount of revenue recognition (IFRS 15)
  • In Profile — Interview with Zhenyi Tang, CMAC member
  • Project updates
  • Information on investor materials and current events

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

European Union formally adopts amendments to IAS 40

15 Mar 2018

The European Union has published a Commission Regulation endorsing 'Transfers of Investment Property (Amendments to IAS 40)'.

The amendments issued by the IASB in December 2016 clarify transfers of property to, or from, investment property.

The European Union effective date is the same as the IASB's (1 January 2018).

The Commission Regulation amending Regulation (EC) No 1126/2008 adopting certain international accounting standards in accordance with Regulation (EC) No 1606/2002 of the European Parliament and of the Council was published in the Official Journal of the European Union on 15 March 2018.

As a result of the EU's adoption, the EFRAG has updated its endorsement status report.

IFRS Foundation Trustees and Due Process Oversight Committee hold January 2018 meeting

14 Mar 2018

The IFRS Foundation Trustees and the Due Process Oversight Committee (DPOC) met in Hong Kong on 30 January – 1 February 2018.

Meeting ac­tiv­i­ties included the following:

  • Executive session — The Trustees discussed a number of important strategic issues:
    • Trustee Corporate Governance Issues — The Trustees discussed issues related to governance and procedures.
    • Report of the Directors — The Trustees received a report which discussed highlights of the IFRS Foundation in the past three months.
    • Asia-Oceania Office Plan — The Trustees approved the Asia-Oceania’s 2018 work plan.
    • Analysis of Organisation expenditure — The Trustees received a report on total expenditure for 2017.
    • Trustee Meeting Locations — The Trustees agreed that Brussels will host the first meeting in 2019.
    • Committee reports — The Trustees discussed reports from the Audit and Finance Committee, the Education and Content Services Committee, the Human Capital Committee, the Nom­i­nat­ing Committee, and the DPOC.

      The DPOC session included an update on the IASB’s technical activities as well as its due process actions. The DPOC also announced Ann Tarca will become Vice-Chair of the IFRS Taxonomy Consultative group. In addition, the DPOC approved a staff paper which outline the scope and timetable for the review of the Due Process Handbook.
  • IASB Chairman’s report — The Chair of the IASB provided the Trustees with an update on the IASB’s technical ac­tiv­i­ties, support for the implementation of IFRS 17, and the conceptual framework project.
  • Meetings in Hong KongThe Trustees received a presentation by the Advisory Council chair. In addition, the Trustees met with the Asian-Oceanian Standard-Setters Group (see the summary on AOSSG website) and had a stakeholders event.

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

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