The full agenda for the meeting, dated 11 July 2014, can be found here.  We will post any updates to the agenda, and our Deloitte observer notes from the meeting, on this page as they are available.

With the approval from the IFRS Foundation Monitoring Board, the following Trustees have been reappointed:

• Michel Prada (Chairman of the Trustees, Europe),
• Ronald Arculli (Asia-Oceania),
• Chandrashekhar Bhaskar Bhave (Asia-Oceania),
• Sir Callum McCarthy (Europe),
• Marco Onado (Europe), and
• James Quigley (North America).

All reappointments will be serving their second three-year term, which will become effective on 1 January 2015 and expire on 31 December 2017.

For more information, see:

• Press release (link to IASB website).
• Overview of all IFRS Foundation Trustees.

The new EFRAG governance structure will become effective from 31 October 2014.  In the new structure, and with the objective of Europe speaking with one voice, a new EFRAG Board will be established and will be responsible for all EFRAG positions, after having considered the technical advice provided by the EFRAG Technical Expert Group (EFRAG TEG).  The Board must also ensure that the EFRAG has an open and transparent due process including a public consultation process with European constituents on draft EFRAG positions such as discussion papers, draft comment letters, draft consultation documents and draft endorsement advices.

European stakeholder organisations and National Standard Setters are invited to nominate EFRAG Board members taking into account the profile and criteria for EFRAG Board members.  The seats are allocated as follows:

European Stakeholder Organisations: eight members:

Industrial and trading companies: two members proposed by BUSINESSEUROPE;

Banks: two members proposed by the European Banking Federation, the European Association of Cooperative Banks, the European Savings and Retail Banking Group and the European Association of Public Banks;

Insurance companies: one member proposed by Insurance Europe;

Accountancy profession: two members proposed by the FEE ("Federation of European Accountants") and the EFAA ("European Federation of Accountants and Auditors");

Users: one member proposed by the associations representing private investors (“end users”) and financial analysts;

National Standards Setters (NSS): eight members of which the NSS of France, Germany, Italy and the UK will each nominate one member.

Nominations are requested by 5 September 2014.

Click for:

• Press release (link to EFRAG website).
• EFRAG call for candidates (link to EFRAG website).
• Our UK Accounting Plus news item on the new EFRAG governance structure.

The IFRS Foundation Trustees, the European University Institute and the Padoa-Schioppa family have established the Tommaso Padoa-Schioppa Memorial Lecture to honour the memory of Mr Padoa-Schioppa and to promote discussion on the importance of high quality financial reporting to global economic development.

In his opening remarks, Mr Prada noted Tommaso Padoa-Schioppa's professional achievements but also reminded the audience of the personal charm, warmth and charisma of the late Chairman of the IFRS Foundation.

During his keynote speech, Mr Draghi spoke about sovereignty as a positive concept and fiscal and structural policies within a monetary union. He recognised the significant progress made in the last ten years towards International Financial Reporting Standards (IFRS) becoming global standards and called upon policymakers in Europe to "progress swiftly in the adoption of IFRS 9".

In his closing remarks, Mr Portes picked up Mr Draghi's point that the financial crisis had led to fragmentation and renationalisation and called for a reversal of the disintegration of the past five years.

The following documents are available on the IASB's website:

• Press release on the inaugural Tommaso Padoa-Schioppa Memorial Lecture
• Opening remarks by Mr Prada
• Keynote speech by Mr Draghi (also available as video through the press release)
• Closing remarks by Mr Portes

ESMA published a consultation paper on the proposed guidelines in July 2013 and received 32 responses to it. Some responses had been very critical, especially regarding the relationship between the guidelines and the European Transparency Directive, the impression that ESMA seemed to want to assume the role of a standard-setter and the perception that ESMA was assuming an interpretative role. The suggested scope of the proposed guidelines had also been viewed critically by respondents.

The final report ESMA Guidelines on enforcement of financial information published today provides an overview of the feedback received from stakeholders and the ESMA Securities and Markets Stakeholder Group (SMSG) and ESMA's responses. The final guidelines, which reflect ESMA's consideration of the comments received, are presented in an annex to the report.

In response to the comments regarding the need to ensure that ESMA and European enforcers do not interfere with standard-setters' role, ESMA confirms that the role of the enforcers is restricted to regularly bringing to the attention of the standard-setters issues in accounting standards which have come to the enforcers' attention in the course of their work. ESMA also confirms it's view that materiality for enforcement purposes should be the same as defined in the relevant reporting framework. To avoid misunderstandings, ESMA has decided to adjust some terms used, such as 'unlimited scope' and 'focused' examinations in the enforcement process or the description of the actions taken by enforcers when infringements are discovered. As respondents provided extensive comments on whether the financial information provided in prospectuses should be in the scope of these guidelines, ESMA has decided to address this matter separately as part of its work related to the Prospectus Directive.

The guidelines will now be translated into the official languages of the EU. The final texts will be published on ESMA's website and will become effective two months after that publication.

Please click for access to the final report on the ESMA website.

Preparers of annual reports and accounts in the public sector are required to follow the Government Financial Reporting Manual (FReM) which is the technical accounting guide to the preparation of financial statements.  It complements guidance on the handling of public funds published separately by the relevant authorities in England and Wales (HM Treasury and the Welsh Assembly Government respectively), Scotland (the Scottish Government) and Northern Ireland (the Executive Committee of the Northern Ireland Assembly). 

Alongside the FReM, the latest manual of which was published in December 2013, HM Treasury has today issued supporting guidance including guidance on:

• Asset valuation.
• The accounting for business combinations under common control.

The application guidance is available on the HM Treasury website.

Under current IFRSs claims on an entity are classified into liabilities and equity and generally only instruments classified as liabilities are directly measured with changes in such measurement are presented in comprehensive income. In order to determine if a claim is classified as a liability or as a claim on equity, IFRSs generally use the conceptual definition of a liability. Sophisticated financial instruments have been developed to exploit the differentiation between equity and liability and instruments that are economically similar may fall on different sides of the divide and therefore be reported very differently. In some cases, the current requirements of IAS 32 Financial Instruments: Presentation also lead to the classification of what are felt to be ownership instruments in various corporate structures as liabilities.

Therefore, the IASB picked up the topic again in its July 2013 Discussion Paper DP/2013/1 A Review of the Conceptual Framework for Financial Reporting, suggesting to continue to define equity as residual interest but to refine the definition. In its comment letter on DP/2013/1, EFRAG recommended that the IASB consider the equity/liability distinction in parallel to, and separate from, the wider project and has now published the DP Classification of Claims to further the discussion and to assist the IASB in developing a discussion paper of its own, which is currently expected to be published at the same time as an Exposure Draft of the revised Conceptual Framework.

The EFRAG DP does not say how the distinction between claims should be made, but discusses approaches to defining elements and aims to identify the choices that must be made in classifying the claims on an entity and the consequences of those choices requirements, including the choices taken in current IFRS. The paper also identifies the extent to which each of the choices is consistent with identified objectives and how these objectives may conflict with each other. Finally, the paper also suggests a possible order in which these choices could be taken and identifies which ones appear to have been taken in developing current IFRS requirements. Choices that need to be taken in developing classification requirements, including the choices taken in current IFRSs, are illustrated by means of a helpful flowchart.

To assist in reducing the identified conflicts between objectives in a two-element approach, the paper also identifies three additional elements that are believed could help in reducing conflicts. These additional elements, which were identified based on current problems with financial reporting, are participating obligations, obligations to transfer claims on equity, and instruments that are contractually bail-inable. The paper shows how they may interact with existing elements and some advantages and disadvantages of including them.

The DP also contains a glossary of terms as discussions around the classification of claims showed that there is not a common vocabulary for describing and understanding the issues. Therefore, a glossary has been developed with the aim of developing a common terminology to increase shared understanding.

Comments on the DP, which also contains several specific questions, are requested by 31 October 2014. Please click to access the Discussion Paper and a corresponding press release on the EFRAG website.

The TRG was formed in June 2014 and is responsible for soliciting, analysing, and discussing stakeholder issues arising from implementation of the new standards in order to assist the IASB and the FASB to determine what, if any, action will be needed to address those issues.

The agenda for the meeting is as follows:

Agenda papers from this meeting are available on the IASB's website.

Taxonomies are used when tagging accounts for electronic filing and for other analytical purposes. Electronic tagging helps users of financial information in corporate reports to extract the information they want and analyse it more efficiently.  The consultation seeks comments from “users, preparers and others” on three taxonomies to reflect full EU adopted IFRS and the new financial reporting standards for the UK and Ireland – Financial Reporting Standard (FRS) 101 and Financial Reporting Standard (FRS) 102.  

Our key points in response to the consultation are:

• We commend the FRC for taking on the governance of the UK XBRL taxonomies. A strong governance process with due process is needed, given the increased move towards online filing.
• We suggest that the FRC publish a timeline for when other specialist parts of taxonomy will be prepared and by whom. At the moment these taxonomies do not contain tags for banks, insurance companies and charitable companies preparing financial statements under FRS 102. We also ask the FRC to commit to timely maintenance of the taxonomies as and when UK GAAP, IFRS or company law is updated as early adopters may need to be able to file their financial statements with HMRC and/or Companies House.
• We comment on the tagging of material within the annual report other than the financial statements. The FRC explained the principles as to how it decided for which information it will develop tags for. However, it is not clear from the detailed draft taxonomies that these principles have been applied consistently. We suggest that this may be useful to discuss with users via the FRC’s Financial Reporting Lab – ultimately there is a balance between tagging information at a granular level (making it easy to find) and imposing a rigid structure which may stifle innovation in reporting. 

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