The following responsibilities have been determined:

• Henry Rees has become Director of Implementation and Adoption Activities and will be supported by Patrina Buchanan as deputy.
• Andrea Pryde will be leading the IASB’s standard-setting staff work with the exception of the financial instruments work, which will be continue to led by Kumar Dasgupta.
• Michael Stewart will be responsible for all post implementation reviews and will also lead certain research projects.
• Peter Clark will continue to lead the IASB's overall research programme.
• Wayne Upton will continue to chair the IFRS Interpretations Committee.

Please click for the announcement of these new responsibilities on the IASB website.

Tuesday, 12 January 2016

• Agenda decisions to finalise:
  • IAS 39 (IFRS 9) — Embedded derivatives in negative interest rate environment
  • IFRS 9 — Transition issues relating to hedging
  • IAS 32 — Classification of liability for prepaid cards in the issuer’s financial statements
  • IFRS 11 — Remeasurement of previously held interests
  • IFRS 5 — Non-current assets held for sale and discontinued operations
  • IAS 12 — Recognition of deferred taxes
• Item for continuing consideration:
  • IFRIC 12 — Payments made by an operator to a grantor in a service concession arrangement

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

Mr Hoogervorst began by discussing IFRS 9 and noted that the introduction of an expected loss model for credit losses is the most important change to the standard. He noted the positive reception the standard has gotten throughout Europe.

The IASB's long-awaited leases standard will be published on Wednesday, 13 January. Mr Hoogervorst promoted the comparability and "economic reality" that IFRS 16 will bring to listed companies around the world. He admitted that it wouldn't be popular with everyone and that half of all listed companies would be affected by changes to leases guidance. However, he affirmed that the IASB had "looked at all the possible risks very carefully" and concluded that the risks and costs associated with the new standard are "manageable".

Moving on to insurance, Mr Hoogervorst said that the IASB expects to (1) finish its deliberations "soon" and (2) publish a new standard "around the end of 2016". He noted the importance of the insurance project:

Today’s accounting Standards for the insurance contracts are highly defective. There is no real global standard and there is a wide variety of practices around the world. Some of these standards provide information that is clearly wrong.

Mr Hoogervorst noted that the IASB's new standard would be based on current measurement, but that the complexity of the insurance industry is making it difficult to resolve all the accounting issues involved. He said that the effective date of the new insurance contracts standard would be later than that of IFRS 9, but understands that this will be problematic to the insurance industry:

We have recently exposed a possible solution to this problem, which includes the option of a deferral of IFRS 9 for pure insurance companies. For conglomerates that combine insurance with banking activities, we will make it possible to adjust Profit or Loss for the effects of IFRS 9 through what we have called the overlay approach. We will evaluate the feedback we get on our proposals in the spring and expect to finalise our decisions well before the summer.

During the following question and answer session, Mr Hoogervorst was again asked by several ECON members about the different effective dates of IFRS 9 and the new insurance standard. He stressed: "We believe there is something of an issue," however, he also stated: "That does not mean that we will want to go all the way in adressing this issue." Again, Mr Hoogervorst highlighted the overlay approach. Asked after the deferral approach and a possible application below the reporting entity level he commented: "That is taking flexibility a bit too far."

Regarding the conceptual framework, Mr Hoogervorst said that the IASB expects to publish a new version in 2016, which will include the issues of prudence and stewardship.

For more information, see Mr Hoogervorst's full remarks on the IASB's website or a video recording of the entire ECON meeting, which also features a Q&A session with the Chairman of the IFRS Foundation Trustees, Michel Prada. (Please note that the recording, including Mr Hoogervorst's introductory remarks, can be watched in any of the EU's official languages).

The European Parliament workshop was entitled: How to achieve more reliable and transparent accounting systems: "How to design European Public Sector Accounting Standards (EPSAS) for a better implementation of the EU budget in the Member States?" Experts from the European Commission, the European Central Bank (ECB), National Accounting Offices and Ministries presented their views on the state of play and challenges for national administrations related to EPSAS implementation. The aim of the feedback report is to disseminate the information shared among the experts during the workshop. You can access the report on the European Parliament website. The workshop was also webstreamed and a recording is available here.

The draft of first chapters of an EPSAS Framework is presented as an alternative to the Conceptual Framework for General Purpose Financial Reporting by Public Sector Entities published by the IPSASB in October 2014. Significant differences are a greater emphasis on the accountability towards citizens, the specification of intergenerational equity and sustainability. Moreover, it is proposed to replace the principle of neutrality by the principle of asymmetric prudence: losses are recognised at an earlier stage than gains are. Further components of the EPSAS framework, such as asset and liability criteria, as well as particularities of public sector accounting will be defined in further chapters. Please click to access the draft here (external link) - please note that this is a dual language version of the document (German and English).

The ECON meeting will be webstreamed. The exchange of views with Hans Hoogervorst will begin at 16.30 Brussels time (GMT+1).

Check out the summaries for the forthcoming discussions on embedded derivatives in a negative interest rate environment, transition issues relating to hedging, classification of a liability for prepaid cards in the issuer’s financial statements, remeasurement of previously held interests, non-current assets held for sale and discontinued operations, recognition of deferred taxes, and payments made by an operator to a grantor in a service concession arrangement. We have added them to our meeting note page and will supplement them with our popular meeting notes after the meeting.

The European Union published the EU Accounting Directive 2013/34/EU (‘the Directive’) on 26 June 2013. The Directive aimed to simplify the accounting requirements for small companies and improves the clarity and comparability of companies' financial statements within the Union.

Following a consultation by BIS in August 2014 and government response in January 2015, regulations were made (the Companies, Partnerships and Groups (Accounts and Reports) Regulations 2015) which implemented the EU Accounting Directive for limited companies.  Changes were also made by the Financial Reporting Council (FRC) to UK accounting standards in July 2015 to implement those changes.  At that time, the Government indicated that it would be consulting separately for LLPs and qualifying partnerships.

The LLPs and qualifying partnerships consultation proposes to introduce similar changes to the regulatory framework for LLPs.

Overall the ICAEW supports the proposals.  It comments that “in our view, having different rules for LLPs and companies represents an additional burden on business and is most unwelcome”.

Within its comment letter the ICAEW also expresses continued concerns over the long term implications of the micro-entity regime and the revised regime for small companies.  It is particularly concerned with the impact of the reduced level of information included in micro-entity accounts (or abridged accounts under the revised small companies’ regime) on the ability of such businesses to raise finance.  It also expresses concerns over the limited disclosure requirements under the revised small companies’ regime in the context of the responsibility of directors to ensure that accounts show a true and fair view.  The ICAEW “continue to urge BIS to monitor the effects of the revised regime over time, particularly in terms of the quality of financial statements produced by small and micro-entities.

The full comment letter is available on the ICAEW website.