The IFRS compliance, presentation and disclosure checklist 2014 summarises the recognition, measurement, presentation, and disclosure requirements set out in IFRSs in issue as of 30 April 2014. IFRSs include Standards as issued by the International Accounting Standards Board (IASB) and the former International Accounting Standards Committee and Interpretations as issued by the IFRS Interpretations Committee and the former Standing Interpretations Committee. It may be used as a guide to assist in considering compliance with the requirements of the IFRSs. It is not a substitute for understanding such pronouncements.  This is a "pure" IFRS compliance, presentation and disclosure checklist.  UK IFRS reporters should additionally refer to 'GAAP 2014 Annual report disclosures for UK listed groups' for the legal and regulatory requirements which UK IFRS reporters will also need to comply with.

The IAS 34 compliance checklist 2014 summarises the requirements of IAS 34 Interim Financial Reporting, formatted to allow the recording of a review of interim financial statements, with a place to indicate yes/no/not-applicable for each item. The checklist addresses the requirements of IAS 34 as of 30 April 2014.  This is a "pure" IFRS compliance checklist.  UK IFRS reporters should additionally refer to '2014 update on half-yearly financial reporting' for the legal and regulatory requirements which UK IFRS reporters will also need to comply with.

Click for:

• IFRS Compliance, Presentation and Disclosure Checklist 2014 (Excel file, 3.5 MB)
• IAS 34 compliance checklist 2014 (Excel file, 81 KB)

In our response to the IVSC's consultation we support the Board's efforts to bring together national bodies of valuation professionals into a global representative organisation. However, we believe the role of the IVSC should be as an educational and coordinating body, rather than as an international 'standard setter', which suggests a significant degree of regulatory rigor and compliance. We do support the IVSC developing valuation guidance based on clear principles that can be applied across asset (and liability) types in order to facilitate a variety of valuation objectives, but do not support developing more asset-specific or sector-specific guidance.

Download the full comment letter.

We are supportive of the IASB in the development of an approach to account for dynamic risk management activities; however, we do not support the Portfolio Revaluation Approach as stated in the discussion paper because it will (1) conflicts with the accounting principles in the conceptual framework, (2) require risk management activities to be defined in order to determine what is in or out of the revaluation model, and (3) not build on the classification, measurement and general hedge accounting concepts already established in IFRS 9. In addition, we believe that a portfolio hedging solution should be examined for insurers and other non-financial entities.

We also believe that an approach that combines existing thinking in IFRS 9 with the ability to behaviouralise cash flows on a portfolio basis (including core deposits) and allowing bottom layers to be designated has the potential to be more relevant than the existing portfolio fair value hedge accounting model in IAS 39.

Click for the full comment letter.

The paper is structured into five sections:

• Why does the European Commission deal with EU Member States’ public sector accounting?
• Why does the European Commission suggest developing European Public Sector Accounting Standards (EPSAS)?
• How did the EPSAS project proceed?
• The FEE position on EPSAS
• What are the next steps in the EPSAS project?

In the briefing paper, FEE continues to stress that a global solution (which alsready exists in International Public Sector Accounting Standards (IPSAS)) is the preferred solution. In an issues paper published in March 2014 FEE had already outlined a number of significant concerns in connection with EPSAS. Given, however, the urgent need for a reform of public sector accounting with the objective of greater transparency and accountability, FEE states that "EPSAS could be acceptable to encourage EU Member States to move towards accrualsbased accounting and increase the quality of their reporting" if a number of conditions are met.

After recently releasing a study analysing the potential costs and benefits of implementing EPSAS in the Member States and the suitability of IPSAS for developing EPSAS, next steps in the project are a European Commission 'Communication regarding EPSAS' and an 'Impact Assessment regarding an EPSAS Framework Regulation'. Both are expected in October 2014.

Please click for access to the briefing paper on the FEE website.

The website EPSAS.eu - an online project initiated by the University of Hamburg (Germany) and the University of Linz (Austria) - offers comprehensive information about the idea of implementing EPSAS. Please access the site's news section for access to all documents published so far.

Effective corporate governance is critical to the proper functioning of a bank, the banking sector and the economy. The proposed guidelines:

• strengthen the guidance on risk governance, including the risk management roles played by business units, risk management teams, and internal audit and control functions (the three lines of defence) and the importance of a sound risk culture to drive risk management within a bank;
• expand the guidance on the role of the board of directors in overseeing the implementation of effective risk management systems;
• emphasise the importance of the board's collective competence as well as the obligation on individual board members to dedicate sufficient time to their mandates and to remain current on developments in banking;
• provide guidance for bank supervisors in evaluating the processes used by banks to select board members and senior management; and
• recognise that compensation systems form a key component of the governance and incentive structure through which the board and senior management of a bank convey acceptable risk-taking behaviour and reinforce the bank's operating and risk culture.

The press release and proposed guidelines are available from the website of the Bank for International Settlements.

In its letter, ESMA expresses the view that the objective of the proposed macro hedging model should be kept narrow, in order to address the issues that led to the current European carve-out of certain requirements of IAS 39.  In developing a macro-hedge model, ESMA considers that the IASB needs to find a balance between aligning accounting with risk management activities and the complexity and conceptual difficulties that arise from any proposals.

ESMA has several concerns about the Portfolio Revaluation Approach (PRA) proposed by the IASB, in particular the need to address:

• the issue of core demand deposits;
• treatment of prepayment risk at portfolio level;
• designation of sub-benchmark instruments; and
• the interaction of the scope of macro hedging with other standards, for example IAS 37 (in the context of pipeline transactions).

It is also concerned that any practical expedient in the PRA could only be used to the extent that it represents a faithful proxy to the managed exposures. In its view, neither of the proposed approaches in the discussion paper (dynamic risk management or risk mitigation) is fully satisfactory.

ESMA disagrees with the proposal that ineffectiveness as a result of the PRA should be deferred in other comprehensive income.  It is also concerned that application of PRA to risks other than interest rate risk as this may create a range of audit and enforcement challenges, as well as further conceptual issues and so does not support this.

In conjunction with its response to the IASB, ESMA has also submitted a response to the European Financial Reporting Advisory Group (EFRAG)'s consultation on its draft comment letter to the IASB on this discussion paper.

Both the response to the IASB and the response to EFRAG can be downloaded from the ESMA website.

IFRS 15, issued by the International Accounting Standards Board (IASB) on 28 May 2014, supersedes IAS 18 'Revenue', IAS 11 'Construction Contracts' and a number of revenue-related interpretations. Application of the standard is mandatory for all IFRS reporters and it applies to nearly all contracts with customers: the main exceptions are leases, financial instruments and insurance contracts.

The new standard provides a single, principles based five-step model to be applied to the recognition of revenue from contracts within its scope. The five steps are:

• Identify the contract with the customer,
• Identify the performance obligations in the contract,
• Determine the transaction price,
• Allocate the transaction price to the performance obligations in the contracts,
• Recognise revenue when (or as) the entity satisfies a performance obligation.

EFRAG supports the adoption of IFRS 15 and recommends its endorsement.  EFRAG’s initial assessment is that IFRS 15 meets 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.     

EFRAG’s conclusion is supported by an Effects Study Report which considers the costs and benefits of implementing IFRS 15. EFRAG’s assessment is that the benefits for preparers and users in implementing IFRS 15 outweigh the costs.

Comments are requested by 15 December 2014. 

Click for (all links to EFRAG website):

• Press release
• Draft endorsement advice and effects study report

The Sustainable Stock Exchanges initiative (SSEI) was founded in 2009 by the United Nations to exchange experience in the development and promotion of corporate social responsibility and responsible investment among investors, listed companies, regulators and capital market infrastructure institutions. The SSEI prepares biennial reports providing a periodic picture of sustainability initiatives implemented by stock exchanges and regulatory bodies around the world. The reports also highlight current best practices, trends, opportunities and challenges. Some key findings of the 2014 report are:

• Over forty per cent of the 55 exchanges reviewed offer at least one index integrating social and/or environmental issues;
• Over one-third of the exchanges provide either sustainability reporting guidance or training to the listed companies on their exchange;
• Twelve of the 55 exchanges require aspects of environmental and social reporting for at least some of their companies, with 7 of those exchanges requiring such reporting for all listed companies;
• 19 members of the G20 have at least one regulation in place requiring disclosure of some social and/or environmental metrics by companies;
• Of the 32 Securities regulators represented on the board of the International Organization of Securities Commissions (IOSCO), more than one-third have introduced a sustainability reporting initiative.

However, the report also notes:

While a 'new mainstream' is emerging among policymakers, regulators and exchanges, the sustainability challenges the world faces remain enormous. Further progress by exchanges and their regulators is particularly important given the wider sustainable development context, and the expected introduction of the UN Sustainable Development Goals in 2015. At present, financial markets are not set up to channel sufficient funds towards sustainable development objectives.

Please click for access to the report and a press release on the SSEI's 2014 Global Dialogue (links to SSEI website). The SSEI currently counts 16 partner exchanges from every continent; most recently, Deutsche Börse joined the initiative (link to Deutsche Börse website).

This letter sets out the FRC's response to the IASB' discussion paper, which was published in April 2014.

The FRC believes that the paper is a helpful step in the IASB's macro hedge accounting project, as it clearly articulates the risk management approach adopted by some banks in practice and considers the difficult accounting issues raised by this. However, overall they believe that the IASB's proposed Portfolio Revaluation Approach is a step too far in aligning accounting requirements with an entity’s risk management activities.

The FRC encourages the IASB to continue to develop an improved macro hedge accounting model, as this is one of the weaknesses of IAS 39. However, they believe that the approach taken by the IASB is not the most appropriate one. Rather than developing a generally applicable model for macro hedge accounting in isolation from existing accounting principles, they believe that the IASB should identify the barriers that exist in the current framework that prevent more meaningful and flexible macro-hedge accounting. The Board could then consider which of these can be removed, whilst still retaining the overall integrity of the IFRS accounting framework and building on the principles in IFRS 9's general hedge accounting model.

The full comment letter can be downloaded from the FRC website.

The objective of the two consultations (one focused on preparers and one focused on users) was to obtain constituents' views on examples of transactions that would qualify as leases under the proposals, but that in the constituents view are in substance services, and the two alternative approaches proposed by the IASB and the FASB (particularly which is more appropriate and/or less costly to apply). The preliminary results of the consultations were discussed at the outreach event.

The main findings of the survey were:

• Respondents provided several examples of transactions that would qualify as leases under the 2013 ED proposals, but in the constituents' view should not be recognised on a lessee's balance sheet.
• Constituents noted that more work had to be done on the scope of application and/or on the definition of a lease.
• Of the two approaches that surfaced during the March 2014 joint meeting where the IASB and FASB did not reach a consensus regarding lessee accounting, users preferred the IASB approach while preparers' views were mixed and only a slight majority preferred the IASB model.

Please click for access to the reports on the EFRAG website:

• Feedback report from the public consultations
• Summary report on the outreach event