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News

ITCG (IFRS Taxonomy Consultative Group) (mid blue) Image

Agenda for the January 2020 ITCG meeting

07 Jan 2020

The agenda is available for the next meeting of the IFRS Taxonomy Consultative Group (ITCG), which will be held in London on 19 January 2020.

The agenda is sum­marised below:

Thursday 16 January 2020 (09:00-17:00)

  • IFRS Taxonomy modelling for Exposure Draft General Presentation and Disclosures
  • Review of common reporting practice related to the primary financial statements
  • Review of common reporting practice related to IAS 19 Employee Benefits
  • Review of common reporting practice related to IFRS 7 Financial Instruments: Disclosures
  • Review of IFRS Taxonomy supporting materials

Agenda papers for this meeting are available on the IASB website.

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

EFRAG TEG appointments and reappointments

07 Jan 2020

The Board of the European Financial Reporting Advisory Group (EFRAG) has announced the appointment of four new members of — and six reappointments to — its Technical Experts Group (TEG).

The new EFRAG TEG members are Jens Berger (Leader of Deloitte Germany's IFRS Centre of Excellence), Erlend Kvaal (academic, Norway), David Procházka (at large, Czech Republic) and Christoph Schauerte (industry, Germany). The appointments of Mr Berger, Mr Kvall and Mr Schauerte are effective 1 January 2020, while Mr Procházka will begin his term on 1 April 2020.

EFRAG TEG Vice-Chair Nicklas Grip has been reappointed, along with Ana Rosa Cortez, Geert Ewalts, Emmanuelle Guyomard, Ambrogio Virgilio and Jed Wrigley. Their reappointments are effective from 1 April 2020.

For more information, see the press release on the EFRAG Web site.

 

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EFRAG publishes its final comment letter on the IASB exposure draft ED/2019/6 disclosure of accounting policies

07 Jan 2020

EFRAG has published its Comment Letter in response to the IASB's Exposure Draft ED/2019/6 Disclosure of Accounting Policies (Proposed Amendments to IAS 1 and IFRS Practice Statement 2) (the ED).

  • EFRAG supports the proposal to replace the undefined reference to 'significance' with the defined concept of 'materiality'.
  • EFRAG suggests that the IASB further clarifies that, in applying the principle of materiality, an entity needs also to consider the accounting policies that are relevant to an understanding of its financial statements taken as a whole, consistently with Step 4 of the Materiality assessment process developed by the IASB.
  • EFRAG also notes the possible inconsistencies of the proposed guidance with the existing disclosure requirements in IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors regarding accounting policies choices and changes.
  • Lastly, EFRAG welcomes the proposed guidance and examples to help entities determine when an accounting policy is material and suggests some improvements.

See the press release and the comment letter on EFRAG website.

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2017 New Year (asterisk green) Image

Season's greetings

24 Dec 2019

We wish all our readers a peaceful holiday and all the best for the New Year.

We look forward to seeing you again after the holidays and to continue to be your preferred accounting website in 2020.

Accountancy Europe Image

Accountancy Europe releases paper on interconnected standard-setting for corporate reporting

24 Dec 2019

Accountancy Europe has published a paper describing and calling for a global solution to interconnected standard-setting that can meet the need for reliable, consistent information in non-financial reporting that is interconnected with financial reporting.

The introduction to the paper notes:

Global risks and opportunities mean that financial information alone cannot give a full picture of a company’s performance. Climate change, environmental degradation, social unrest and internally generated intangibles are addressed by non-financial information (NFI) reporting. However, the hundreds of NFI reporting initiatives available are leading to confusion and the potential for greenwashing. For an effective response to these global issues and stakeholder demands, NFI reporting needs to be harmonised and interconnected with financial reporting.

Therefore, the paper introduces nine criteria to assess approaches to interconnected standard-setting for corporate reporting. The criteria are:

  • urgency,
  • global or local solution,
  • oversight,
  • due process of standard-setting,
  • responding to stakeholder interests,
  • framework and metrics,
  • materiality lens,
  • legal embedding, and
  • role of technology.

These criteria are then applied to four approaches, being (1) an international non-financial reporting standards board within the IFRS structures, (2) regional consolidation, (3) separate governance structure for financial and NFI reporting; and (4) global corporate reporting structure.

Accountancy Europe concludes that the fourth approach offers the best solution with an enhanced monitoring body, a corporate reporting foundation that builds on the current IFRS Foundation Trustees and would be responsible for financial reporting and non-financial reporting oversight and two standard-setting boards (the IASB and a new international non-financial reporting standards board) that would be connected by a common framework for connected reporting.

Comments on the paper are invited by 31 March 2020. Please click to access the paper on the Accountancy Europe website.

IVSC (International Valuation Standards Council) (lt green) Image

IVSC continues article series on goodwill amortisation

24 Dec 2019

The International Valuation Standards Council (IVSC) has published the second article in a series looking into whether principles underlying business valuations are compatible with the concept of goodwill amortisation. The series aims at encouraging public discussion by exploring certain fundamental questions in this area to inform financial statement preparers, reviewers, and users, and aid the capital market.

The second article What is the information value of the current impairment framework? can be accessed on the IVSC website.

The first article Is Goodwill a Wasting Asset? was published in September 2019.

ESMA (European Securities and Markets Authority) (dark gray) Image

ESMA reports on EU issuers’ use of APMs

24 Dec 2019

In June 2015, the European Securities and Markets Authority (ESMA) published its final Guidelines on Alternative Performance Measures (APMs) for listed issuers that became effective in July 2016. ESMA has now published a report that builds on a desktop review of 2018 annual financial reports to assess issuers’ compliance with the guidelines.

The assessment of issuers’ compliance with the guidelines shows that there is significant room for improvement as only a minority of issuers comply with all principles. The report also highlights that the use of APMs is widespread in all sectors and within all regulated documents. Significant diversity exists in the number and type of APMs used, as well as in their labels and definitions. ESMA notes that ratios and subtotals included inside financial statements may also fall within the definition of an APM and thus should comply with the guidelines.

ESMA will continue to monitor the application of the guidelines and take appropriate actions in case of infringements. ESMA will also submit the report to the IASB as part of its contribution to the IASB’s exposure draft consultation on General Presentation and Disclosures.

Please click to access the report on the ESMA website.

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IASB publishes editorial corrections

23 Dec 2019

The IASB has published its third batch of editorial corrections in 2019.

The new set of editorial corrections affect the Red Book and the annotated Red Book 2019 as well as the Blue Book and the annotated Blue Book 2019 regarding IFRIC 12 Service Concession Arrangements and the glossary. The only stand-alone standard affected is IFRS 13 Fair Value Measurement.

Editorial corrections do not change the meaning or application of pronouncements, but instead correct inadvertent errors. The editorial corrections can be viewed on the editorial corrections page of the IASB's website.

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HM Treasury issues new financial reporting manual (FReM) and IFRS 16 application guidance

20 Dec 2019

HM Treasury has issued a revised version of the government financial reporting manual (FReM) 2020-21, together with application guidance on IFRS 16.

The Government Financial Reporting Manual (FReM) 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 Government respectively), Scotland (the Scottish Government) and Northern Ireland (the Executive Committee of the Northern Ireland Assembly). The FReM is prepared following consultation with the Financial Reporting Advisory Board (FRAB) and is issued by the relevant authorities.

The 2020-21 edition of the FReM has a revised structure and is now separated into four sections:

  • Part A: Principles, purpose and best practice
  • Part B: The form and content of government annual reports and accounts
  • Part C: Application of accounting standards to government annual reports and accounts
  • Part D: Further guidance for government annual reports and accounts

Other changes include:

  • a new chapter addressing best practice in narrative reporting;
  • clearer guidance on the performance report;
  • introduction of 'comply or explain' requirements in certain areas including the structure of the organisation, risks faced, unit cost data and relevant trend data; and
  • new requirements in respect of IFRS 16 Leases, alongside specific application guidance on IFRS 16

The latest version of the FReM and application guidance are available on the HM Treasury website.

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FRAB minutes for September 2019 meeting released

20 Dec 2019

The minutes of the Financial Reporting Advisory Board’s (FRAB’s) meeting of 6 September 2019 have been made available on the HM Treasury website.

The role of the FRAB is “to ensure that government financial reporting meets the best possible standards of financial reporting by following Generally Accepted Accounting Practice (GAAP) as far as possible”. The FRAB includes representatives from the accountancy profession in the private and public sectors, academia and government bodies. The board meets regularly to consider proposed changes to policy and practice.

Key topics discussed during the September meeting included:

  • consideration of the consultation on the draft Financial Reporting Manual (FReM) 2020/2021, resulting in some minor changes and approval of publication of the consultation;
  • an update on work ongoing on the post-implementation review of IFRS 9 Financial Instruments and IFRS 15 Revenue from Contracts with Customers; and
  • an update from HM Treasury on the thematic review of the Statement of Parliamentary Supply.

The minutes and other supporting documents for the September meeting are available on the HM Treasury website here.

Correction list for hyphenation

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