The topics discussed were as follows (click through to access detailed Deloitte observer notes for each topic):

TUESDAY, 15 JULY 2014 (10:00-17:35)

Items for continuing consideration

• IFRS 11 – Analysis of implementation issues
• IAS 12 – Recognition of current income tax on uncertain tax positions
• IAS 16 – Core inventories
• IAS 19 – Remeasurement at a plan amendment or curtailment
• IFRIC 14 – Availability of refunds from a defined benefit plan managed by an independent trustee

Finalisation of tentative agenda decisions

• IAS 1 – Going concern disclosure
• IAS 39 – Classification of a hybrid financial instrument by the holder
• IAS 34 – Condensed statement of cash flows
• IFRS 2 – Price difference between the institutional offer price and the retail offer price in an initial public offering
• IAS 12 – Recognition of deferred tax for a single asset in a corporate wrapper

WEDNESDAY, 16 JULY 2014 (9:00-10:15)

New items

• IFRS 12 – Disclosure of summarised financial information about material joint ventures and associates
• IAS 16 – Accounting for proceeds and cost of testing on fixed assets
• IAS 39 – Holder's accounting for the exchange of equity instruments
• IAS 21 – Foreign exchange restrictions and hyperinflation

The FRC issued a call for comments in June 2014 with the intention of using such comments received to assist it in developing its own response to the IAASB  and to assist it in developing proposals for the adoption into the UK equivalent ISAs (UK and Ireland) when the changes to the ISAs are finalised.

The IAASB ED, which follows an earlier discussion paper, proposes changes to various International Standards on Auditing (ISAs) to better deal with disclosures in financial statement audits. The ED seeks to achieve an appropriate focus by auditors on disclosures and encourage earlier auditor attention on them during the audit process, including disclosures where the information is not derived from the accounting system.

We agree with the need for the IAASB’s project, given the increasing relevance of disclosures to users of financial statements, and indicate our broad support for the IAASB’s proposals. The IAASB is proposing only minimal changes to the requirements of the standards, but extensive additions to the application material. 

We note the IAASB’s plans to change the assertions underlying the audit, which, whilst only in the application material, are fundamental to many firms’ methodologies. We note that whilst integrating “and related disclosures” into the underlying assertions relating to valuation, existence, completeness etc. will make auditors think in a joined up way, there is possibility that this might deemphasise the importance of disclosures which had previously had their own assertions. Linked to this proposal, the IAASB also needs to consider how these integrated assertions will cover disclosures that are not tied to specific balances, classes of transactions and events.

The application material offers auditors the chance to use different assertions as long as they can be shown to cover the same issues.  We suggest that the IAASB’s proposed Staff Publication could usefully indicate that where firms use this as a way of continuing to use the old assertions they will nevertheless need to be able to demonstrate a mapping to the new ones, including any necessary supplementation to policies and procedures to comply with the other changes in the application material.

The IAASB is proposing to change “adequate disclosures” to “appropriate disclosures” throughout the ISAs. This is welcome, because it recognises that the test of good disclosure should not just be “adequacy”; in some circumstances more disclosure can obscure an issue and be inappropriate. We ask that the IAASB co-ordinate finalisation of this project with the IASB’s ED/2014/1 Disclosure Initiative (Proposed amendments to IAS 1) which covers similar ground for preparers of financial statements.

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

The CMAC is a group of professional financial analysts who meet three times a year with  members of the IASB to provide the views of professional investors on financial reporting issues.

Please click for more information about the CMAC and the call for members on the IASB's website.

On 31 March 2014, the IPSASB issued its Strategy Consultation, which proposes its work program for 2015-2019 and strategic objectives. We support the strategic objective of the IPSASB to improve transparency in financial reporting by the public sector through increasing adoption of accrual-based IPSASs and continuing to develop high-quality financial reporting standards. We suggest that the IPSASB's focus should be on the development of IPSASs and allocate a limited amount of resources towards related activities since those activities can be carried out by governments, multilateral organisations and through the IFAC’s Transparency Now campaign.

We also recommend the review of the IPSASB’s current standard setting due process to ensure it is sufficiently robust and met the current best practices. Further, we support the approach of basing IPSASs on IFRSs when determining potential future projects and that convergence with IFRSs should be the normative action.

The full comment letter can be downloaded here.

The FRC welcome the IASB’s disclosure initiative and consider that the IASB should:

provide guidance on what materiality means from a disclosure perspective;

include an explicit statement around disclosure of material information in the Conceptual Framework; and

reduce and define the “magnitude” terms used in IFRSs, such as “significant”, “key” and “critical”.

The full letter is available on the FRC website.

Current status

The revised time table for the major projects is now as follows:

* Indicates a change since the previous work plan update on 24 July 2014.

The IASB expects to issue an exposure draft in the newly introduced 2014-2016 cycle of annual improvements in the second quarter of 2015.  This exposure draft will carry over the one amendment originally expected to be included in the now discontinued 2013-2015 cycle.  Apart from these changes to the annual improvements projects, there are no other changes in expected timing of the narrow-scope projects. 

In addition to the principles of disclosure research project noted above, the expected timing of board discussion has been deferred for the following research projects:

• Business combinations under common control
• Discount rates
• Equity method of accounting

Click for the IASB work plan dated 30 July 2014 (link to IASB website). We have updated our project pages to reflect the updated work plan and other known developments.

On 30 June 2014, the EFRAG, along with European standard setters (ANC, ASCG, FRC and OIC), launched a public consultation to obtain examples where contracts or transactions could qualify as leases under a single-model approach (IASB) or a dual-model approach (FASB), but are viewed by constituents as in-substance services. In addition, the EFRAG and European standard setters are seeking input on which of the two alternative approaches is preferred.

The outreach on 15 September 2014 will include discussions on the initial feedback gathered from the public consultation concerning the two lessees models, as well as possible improvements on how to identify a lease arrangement.

Registration for this outreach event is requested by 8 September 2014.

For more information, see the press release on the EFRAG’s website.