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IVSC consults on revisions to IVS 2017

18 Jul 2018

In January 2017, the International Valuation Standards Council (IVSC) issued the suite of new International Valuation Standards (IVSs) that make up the 2017 IVS. However, based on feedback received during the agenda consultation process conducted in 2017 and 2018, the IVSC has decided to publish targeted revisions to IVS 2017.

The consultation document, including proposed changes and indicative questions, can be downloaded here from the IVSC website.

Comments are requested by 16 October 2018.

IASB posts webinar on the IFRS Taxonomy 2018

17 Jul 2018

The IASB has posted to its website a webinar, ‘IFRS Taxonomy 2018’.

The webinar provides background information, an overview of changes, supporting materials, and upcoming changes to the IFRS Taxonomy.

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

Accountancy Europe responds to the EU fitness check

17 Jul 2018

Accountancy Europe has responded to the European Commission’s consultation document 'Fitness check on the EU framework for public reporting by companies'. While the response fully recognises the legitimacy of the Commissions concerns regarding sustainability and long-term investments, Accountancy Europe is not convinced that additional chnages to IFRSs would address these concerns.

As reported earlier, the document seems oddly tilted against the use of IFRSs as issued by the IASB asking for example whether European listed companies are still best served by applying IFRS or whether the European Commission should be given the power to modify IFRSs as issued by the IASB. Accountancy Europe clearly warns against this. The response states:

It is still appropriate that the IAS Regulation prevents the Commission from modifying the content of IFRS. We call for great caution in permitting the EU to change specific aspects of IFRS standards published by the IASB ('carve-in') before transposing them into EU law.

The reasons the response cites are:

  • Fear of an uncontrollable and unpredictable trend that would lead to EU-IFRS;
  • isolating the EU from global capital markets would hinder investments (including long-term investments), create confusion, and increase the cost of capital;
  • concerns regarding the current position of foreign private issuers in the US;
  • decrease of EU influence on the international standard-setter, which would in turn make the issuance of international standards that do not meet the EU endorsement criteria more likely;
  • loss of all benefits that result from international comparability and transparency.

As additional points on international financial reporting Accountancy Europe also states that listed entities without subsidiaries should also be required to apply IFRSs, the option to apply IFRSs should be available at company level (not member state level), the EU endorsement criteria should not be changed, and the IASB's Conceptual Framework should be endorsed for use in the EU.

Please click to access to the letter of response and the completed consultation questionnaire on the Accountancy Europe website.


FRC issues new UK Corporate Governance Code

16 Jul 2018

The Financial Reporting Council (FRC) has published the new UK Corporate Governance Code together with revised Guidance on Board Effectiveness. The new Code applies for periods commencing on or after 1 January 2019.

The changes introduced are far reaching in some areas, and reflect the Prime Minister’s broad social reform agenda and desire to restore trust in UK business.

There are new Code principles on:

  • alignment of company purpose, strategy, values and corporate culture;
  • effective engagement with shareholders and stakeholders;
  • responsibilities of the board to ensure that workforce policies and practices are consistent with the company’s values and support its long-term sustainable success;
  • consideration of the length of service of the board as a whole and the need for regular board refreshment; and
  • alignment of remuneration and workforce policies to the long-term success of the company and its values.

There are new Code provisions on:

  • the board’s role in monitoring and assessing culture;
  • mechanisms for gathering the views of the workforce;
  • reporting on how stakeholder interests, and the other matters set out in section 172, have influenced the board’s decision-making;
  • succession planning and board member contribution;
  • diversity and inclusion;
  • the length and tenure of the chair;
  • board responsibility for identifying and assessing emerging risks (in addition to the principal risks);
  • holding periods for long-term incentive schemes; and
  • pension arrangements.

This is not a tweaking of the Code as in previous years but a substantial re-write and simplification/reduction with the idea at its foundation that the focus of the revised Code is the company’s approach to governance to long-term success.

In addition to the changes to the Code, investors are bringing their own pressures to bear and increasing focus on matters such as director competence, the impact of climate change and alignment of KPIs to the drivers of long term value creation.

A press release, the Code itself and the Guidance on Board Effectiveness are available on the FRC website.  The FRC have also released a podcast which is available on its website here.

Our related Governance in brief publication is available here.

IASB begins webcast series on the FICE DP

16 Jul 2018

On 28 June, the IASB published a comprehensive discussion paper DP/2018/1 'Financial Instruments with Characteristics of Equity'. The IASB has now made available the first webcast in a series of web presentations to help stakeholders as they prepare to submit their comments on the discussion paper.

The first webcasts offers an 11 minute overview of the discussion paper. The webcast can be accessed here.

Future webcasts in the series will cover:

  • the Board’s preferred approach and classification of non-derivative financial instruments;
  • classification of derivatives on own equity;
  • classification of compound instruments and redemption obligation arrangements;
  • presentation of equity instruments; and
  • presentation of financial liabilities.

Pre-meeting summaries for the July IASB meeting

16 Jul 2018

The IASB is meeting on Tuesday 17 and Wednesday 18 June 2018. We have posted our pre-meeting summaries for the meeting that allow you to follow the IASB’s decision making more closely. For each topic to be discussed we summarise the agenda papers made available by the IASB staff and point out the main issues to be discussed by the IASB and the staff recommendations.

Tuesday 17 July

Rate-regulated Activities

At this meeting the Board will discuss the staff’s recommendations for the measurement of regulatory assets that are recognised in the model as well as the staff’s initial views on a high-level presentation and disclosure objective for the model and possible presentation formats for the statement(s) of financial performance.

Management Commentary

The staff will provide an update on the project to revise the Management Commentary Practice Statement. The membership of the Management Commentary Consultative Group was announced on 10 July 2018. An Exposure Draft for a revised Practice Statement can be expected in 2020.

Business Combinations under Common Control

The staff will give an oral update of the project.

Conceptual Framework

This session focuses on when and how preparers of financial statements should refer to the new Conceptual Framework for assistance in developing accounting policies. The paper includes some analysis but not any recommendations.


The Board will be asked for feedback on the proposal of the IFRS Interpretations Committee to propose narrow-scope amendments to IAS 37 to specify that the ‘cost of fulfilling’ a contract comprises the ‘costs that relate directly to the contract’.

In January 2018 the IASB discussed commodity loans and related transactions, including cryptocurrencies. The staff are recommending that the Board consider the feasibility of a narrow-scope project to address commodity loans. However, they recommend that the Board not do any more work at this time on developing an investment standard. They recommend that the Interpretations Committee be asked to consider how an entity should apply existing IFRS requirements to holdings of cryptocurrencies and ICOs.

Wednesday 18 July

Goodwill and Impairment

The Board will consider how to focus its work on the Goodwill and Impairment research project.

Disclosure Initiative

This session covers five topics: Definition of Material; Targeted Standards-level Review of Disclosures – Guidance for the Board – Drafting Disclosure Requirements; Accounting Policy Disclosure; Location of Information; Technology and Digital Reporting Considerations.

  • The staff are recommending that the Board complete the proposal to amend the definition of material so as to make the changes effective for periods beginning on or after 1 January 2020.
  • In relation to the guidance for the Board on how to draft disclosure requirements, the recommendations relate to when to use prescriptive language and ways to improve consistency of wording. They also have recommendations about how to organise the disclosure requirements within a Standard. The staff are recommending that the Board use IAS 19 Employee Benefits and IFRS 13 Fair Value Measurement to test the new approach.
  • The staff are recommending that the Board amend IAS 1:117 – 124 to require entities to disclose their material accounting policies rather than their significant accounting policies and develop related guidance and examples for inclusion in the Materiality Practice Statement.
  • The staff are recommending that the Board not develop requirements about IFRS information outside the financial statements or non-IFRS information inside the financial statements.
  • The staff are recommending that the Board include relevant considerations in the Guidance for the Board to use when developing and drafting disclosure objectives and requirements but to consider the broader implications of technology on financial reporting as part of the IFRS Foundation’s Technology Initiative.

Accounting Policies and Accounting Estimates

This session is to update the Board of progress on its Exposure Draft Accounting Policies and Accounting Estimates (Proposed amendments to IAS 8). While some respondents to the ED said the proposed amendments would improve clarity others questioned whether the benefits of finalising the proposed amendments would outweigh the costs of doing so. The staff have consulted with the Accounting Standards Advisory Forum and, as a next step, will seek the advice of the IFRS Interpretations Committee.

Emerging Economies Group Update

The meeting concludes with an update of the most recent meeting of the IASB’s Emerging Economies Group.

More information

Our pre-meeting summaries are available on our July meeting note page and will be supplemented with our popular meeting notes after the meeting.

Support material for IFRS 17 on reinsurance contracts held

13 Jul 2018

The IASB has published a pocket guide on reinsurance contracts held and a simple example of a reinsurance contract held to support the implementation of IFRS 17 'Insurance Contracts'.

The pocket guide (24 pages) includes insights from the discussions of the Transition Resource Group for IFRS 17 and the simple example of a reinsurance contract held illustrates the requirements applied to a group of underlying insurance contracts and applied to a reinsurance contract held that provides proportionate coverage for that group of underlying insurance contracts.

The new material is available on the IASB website:


EFRAG is looking for new TEG members

13 Jul 2018

The European Financial Reporting Advisory Group (EFRAG) is inviting applications for its Technical Expert Group (TEG).

Seven of the sixteen members of EFRAG TEG will reach the end of their current term of appointment on 31 March 2019 and three of the country liaison members reach the end of their current term on 30 November 2018. While all members are eligible for reappointment, EFRAG welcomes all applications and in particular seeks candidates with user, preparer and academic backgrounds.

Please see the press release on the EFRAG website for more information.

EFRAG issues draft endorsement advice on ‘Amendments to References to the Conceptual Framework in IFRS Standards’

12 Jul 2018

The European Financial Reporting Advisory Group (EFRAG) has issued a draft endorsement advice letter and a separate invitation to comment relating to the use in the European Union (EU) of ‘Amendments to References to the Conceptual Framework in IFRS Standards’ (“the Amendments”).

The Amendments, published in March 2018, update some of the references and quotations in IFRS Standards and Interpretations so that they refer to the revised Conceptual Framework or specify the version of the Conceptual Framework to which they refer.

EFRAG recommends the endorsement of the Amendments. EFRAG’s initial 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.

Comments are requested by 14 September 2018.

For more information, see the press release, draft endorsement advice letter and the invitation to comment on the EFRAG’s website. EFRAG has also updated its endorsement status report that is available here.

PRAG publishes updated SORP for Pension accounting

12 Jul 2018

The Pensions Research Accountants Group (PRAG) has published a revised Pensions SORP (Statement of Recommended Practice) 2018 to bring the current guidance in line with the latest version of FRS 102.

SORPS  are intended to supplement accounting standards and other legal and regulatory requirements to reflect transactions or circumstances that are unique to particular sectors such as pensions. The 2018 SORP, which will replace the current 2015 SORP, sets out revised guidance for financial reporting by pension schemes.

Since the 2015 SORP was published the Financial Reporting Council (FRC) has made a number of amendments to FRS 102  arising from implementation experience and the FRC’s first triennial review . There have also been changes to relevant pension legislation, mainly the withdrawal of detailed investment disclosure requirements. However there have not been any significant industry developments which impact on pension scheme financial reporting and implementation experience of the 2015 SORP has not given rise to any significant issues. Therefore the update to the SORP has been limited to the changes required to be consistent with the current version of FRS 102 and current relevant pension legislation.

Copies of the SORP are available from the PRAG website here. PRAG has also published an accompanying briefing note  setting out some of the more significant amendments.

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.