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EFRAG (European Financial Reporting Advisory Group) (dk green) Image

EFRAG TEG meeting April 2019

12 Apr 2019

The European Financial Reporting Advisory Group (EFRAG) will hold a TEG meeting on 17 April 2019 in Brussels.

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

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IASB podcast on recent IFRS 17 discussions

12 Apr 2019

The IASB has released a podcast reporting on the discussions at two recent meetings on IFRS 17 'Insurance Contracts'.

The podcast discusses the meeting of the Transition Resource Group (TRG) for Insurance Contracts on 4 April 2019 and the IASB discussion of possible amendments to IFRS 17 on 9 April 2019. The IASB's discussion considered some of the TRG findings.

The 10-minute podcast can be accessed on YouTube.

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Insurance contracts transition resource group holds fourth technical meeting

11 Apr 2019

The Transition Resource Group (TRG) for Insurance Contracts held its fourth technical meeting on 4 April 2019.

The purpose of the TRG is to seek feedback on potential issues related to implementation of IFRS 17 Insurance Contracts. Specifically, the TRG discussed the following two papers:

  • Investment components within an insurance contract
  • Reporting on other questions submitted

The meeting summary and audio recordings of each session are available on the TRG meeting page on the IASB’s website. For more information, see Deloitte's related IFRS in Focus newsletter. The IASB's discussion on amendments to IFRS 17 on 9 April also considered the TRG findings.

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IASB issues 'Investor Update' newsletter

10 Apr 2019

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

This issue features:

  • Spotlight — Crypto-assets: The standard-setting perspective
  • Preview — The Essentials: Analysing lessee financial statements and Non-GAAP performance measures
  • We need your views
  • Stay up to date
  • Resources for investors

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

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IASB concludes discussion of possible amendments to IFRS 17, gives permission to develop an ED

09 Apr 2019

At its meeting currently held in London, the IASB discussed as a whole the amendments to IFRS 17 that the Board has tentatively decided to propose and confirmed that it wishes to proceed with an exposure draft to amend IFRS 17.

The Board discussed the following topics and questions:

  • Sweep issues. The Board discussed additional stakeholder concerns relating to IFRS 17 (and IFRS 9) that have arisen in the project on the amendments to IFRS 17. On the effective date of the proposed amendments to IFRS 17, the staff recommended that the effective date is aligned with that of IFRS 17. On all other issues, the staff recommended that the Board not undertake any further action. The Board agreed unanimously with the staff recommendations.
  • Annual improvements.
    • The Board discussed a number of minor changes the staff have become aware of through the ongoing implementation activities on IFRS 17 that would fall within the scope of the annual improvements process. There were some questions by the Board and additional clarifications will be added to the wording proposed by the staff. The Board agreed unanimously to include these changes in the forthcoming exposure draft.
    • The Board also agreed to include the minor changes to IFRS 17 identified as candidates for the annual improvements process in June 2018 in the forthcoming exposure draft.
  • Overview of the amendments to IFRS 17. The Board was provided with an overview of all the amendments to IFRS 17 that the Board has tentatively decided to propose, the likely effects of the proposed amendments to IFRS 17, and a cost-benefit analysis for all amendments. This part of the session was educational in nature, and no vote was taken.
  • Due process steps and permission for balloting.
    • The Board was asked to confirm its tentative decisions from the November 2018 meeting relating to the mandatory effective date of IFRS 17 and the fixed expiry date for the temporary exemption in IFRS 4 from applying IFRS 9. The Board confirmed that it wants to propose deferring the effective dates (unanimous vote).
    • The Board was asked to confirm that it wishes to proceed with an exposure draft to amend IFRS 17. The Board confirmed that it is satisfied that it has complied with the applicable due process steps and that it should begin the balloting process for the exposure draft (unanimous vote).
    • No Board member indicated a planned dissent at this stage.

The staff will now begin drafting the exposure draft, which it expects to issue by the end of June 2019. The comment period will be discussed at the May 2019 Board Meeting after obtaining permission from the Due Process Oversights Committee for a reduced comment period.

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Financial Reporting Lab publishes quarterly newsletter

05 Apr 2019

The Financial Reporting Lab ("the Lab") has published its Q1 newsletter providing highlights of its activities in the first quarter of 2019.

The newsletter highlights the Lab’s recently released report on artificial intelligence and provides a roundup of the Lab’s latest activities, including two conferences (on digital reporting and performance metrics).

The newsletter also provides an update of the Lab’s three current projects:  

  1. Climate change and workforce reporting;
  2. Sources and uses of cash;
  3. Digital future - virtual reality, augmented reality and video

The full newsletter is available on the FRC website here.

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EFRAG publishes March 2019 issue of 'EFRAG Update'

05 Apr 2019

The European Financial Reporting Advisory Group (EFRAG) has published an 'EFRAG Update' summarising public technical discussions held and decisions made during March 2019.

The update reports on the EFRAG TEG meeting held on 20-21 March and the EFRAG CFSS and EFRAG TEG meeting held on 20 March.  The update also lists EFRAG publications issued in March which included:

Please click to download the March EFRAG Update from the EFRAG website.

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PRAG issues guidance on accounting for Guaranteed Minimum Pension equalisation

05 Apr 2019

The Pensions Research Accountants Group (PRAG) has issued guidance on accounting for Guaranteed Minimum Pension (GMP) equalisation by pension schemes.

The guidance includes:

  • Accounting approach, presentation and disclosures with example disclosures in an appendix
  • Transfers in and out
  • Annuity buy ins/but-outs and longetivity swaps.
  • Audit implications

The guidance is available to members on the PRAG website. Our related Need to know publication is available here.

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BEIS Select Committee publishes "The Future of Audit" report

04 Apr 2019

The Department for Business, Energy and Industrial Strategy (BEIS) Select Committee has published its "Future of Audit" report. The report looks into reforming the UK audit market.

The BEIS report is one of a number of reviews that are taking place, or have taken place, looking at different aspects of the audit market, including a Competition and Market Authority's (CMA) study into audit, the Brydon review on the future of audit and the Kingman review of the Financial Reporting Council (FRC).

The BEIS Committee's inquiry into the future of audit was launched on 12 November 2018 (link to Parliament website).  The object of the inquiry was to examine how the three reviews, indicated above, would complement each other, given the links between the quality of the product, its regulation and the health of competition. The BEIS Committee wanted to ensure that what emerged from these reviews was a coherent framework for auditing that could regain the confidence of investors and the public.  

The BEIS report is the output of a series of hearings that have been held with leaders of the Big Four audit firms, investors, academics, Audit Committee Chairs, the UK audit regulator, mid-tier firms and Government stakeholders.

Among the recommendations are proposals for at least an operational split of audit and non-audit services, with a structural split to be considered if this is deemed ineffective after three years; piloting joint audits between a Big 4 firm and a challenger firm in the 'upper reaches' of the FTSE 100, in conjunction with a cap on the market share of individual firms. These are alongside wider calls for a stronger regulator, a UK version of Sarbanes-Oxley and expanding the scope of audit.

Rachel Reeves MP delivered a keynote speech launching the committee’s report into the future of audit in Chartered Accountants’ Hall.

The full report and the keynote speech are available on the Parliament website.

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ICAEW background paper on who does what in financial reporting

04 Apr 2019

The Institute of Chartered Accountants in England and Wales (ICAEW) has published 'Financial Reporting: Who Does What?' highlighting who does what in financial reporting and unpacking the complex relationships between boards, auditors, shareholders – their duties and responsibilities as well as the regulatory regime within which they operate.

The paper notes that good financial information underpins the capital markets but the institutional framework intended to promote confidence in corporate reporting can in fact compromise quality, because of piecemeal, reactive and ad hoc development over many decades. The press release notes:

The financial statements of listed companies have become more and more complex over the years. At the same time the system that underlies this complex financial reporting is characterised by internal inconsistency, duplication and omission. This makes the system less effective than it could be or should be. It is time everyone involved, from standard-setters, regulators to government, to recognise and address the challenges that have built up over decades.

Please click to access the following information on the ICAEW website:

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