The changes are one of the results of the Monitoring Boards governance review 2010-2011. They have already been implemented by appointing Yael Almog as Executive Director of the IFRS Foundation earlier this year.

The Trustees have announced that further changes to the IFRS Foundation Constitution may be considered in the future, however, they felt that the reality of this change should be reflected in the Constitution as soon as possible.

Comments on the drafting review are requested by 23 October 2012.

Please click for:

• Trustees' press release (link to IASB website)
• access to the drafting review (link to IASB website)

The report, entitled Lenses and Clocks: Financial stability and systemic risks, provides an overview of the developments during the financial and economic crisis of 2007–2012 and the ongoing response to that crisis, and then highlights a number of areas related to the "re-engineering" of the global financial system, relating sustainable finance and investment thinking to these areas.

The report laments the focus on 'short-term' outcomes and analyses some of the initiatives and policy responses to issues identified from the global financial crisis.  In critiquing the global convergence of accounting standards, the report notes:

It appears... that international efforts to bring about convergence around one standard, the International Financial Reporting Standards, have faltered and the accounting community has to a large degree accepted that, at this stage, an integrated global accounting system is beyond its reach, with many of the key unresolved issues still on the table in 2012. Agreement over the valuation and pricing of banking assets, notably the complex financial products such as derivatives that sat at the heart of the initial sub-prime crisis in the United States, as well as loans and loan-like instruments, appear to be, once again, at the epicentre of the schism across the accounting world.

The recommendations of the report are outlined as a series of four 'propositions':

• Proposition 1: Build a deeper understanding of how policy-makers, market regulators and international financing institutions can support the growth and main-streaming of responsible investment and inclusive finance approaches.
• Proposition 2: Establish a monitoring body, which ensures that  global financial architecture is managed on sustainable fiduciary principles.
• Proposition 3: Investigate why long-term pension investment has not resulted in a financial system that more obviously serves the interests of savers and supports global sustainability.
• Proposition 4: Build on the work of the Integrated Reporting Committee and others to promote transparency in the operations of financial and commercial organisations.

The recommendations on proposition 4 include a call for a new protocol on integrated reporting which would cover at least all listed entities on the 50-plus major stock exchanges of the world:

The international community should agree to the adoption by stock exchange authorities and market regulators worldwide of a United Nations protocol that requires listed entities to abide by an integrated reporting standard covering sustainability issues promoting transparency in the operations of financial and commercial organizations. Such a protocol would build on the work of the International Integrated Reporting Committee and would embed a requirement to include a vote on the quality of the integrated report at the annual general meetings of listed corporations.

Click for access to the full report (link to the UNEP-FI website)

During the webcast, the Boards' discussed the following:

• why there is a need for a leases project
• updates on proposed leases models
  • Right-of-use model
  • Lessee accounting model
  • Lessor accounting model
• classification of leases, and
• the current state of the leases project.

Click here to view the IASB-FASB webcast.

Click through for direct access to the notes:

Wednesday, 18 July 2012

• Financial instruments — Classification and measurement (IASB-FASB)
• Financial instruments — Impairment (IASB-FASB)

You can also access the preliminary and unofficial notes taken by Deloitte observers for the entire meeting.

The purpose of the review is to gather "feedback on whether the standard is functioning as intended, as well as more practical information on the challenges and costs associated with implementing the standard." In addition to the RFI, the IASB will be holding outreach activities internationally to gather more feedback on the effect of implementing IFRS 8.

The IFRS 8 standard marks the first instance the IASB has conducted a PIR of a major standard since PIR was introduced by the Trustees in 2007.

Comments on the RFI are due by 16 November 2012.

A live web presentation on the RFI will be available on 26 July 2012 by the IASB staff. Presentation details are available on the IASB website.

Click for (links to IASB website):

• IASB press release
• Request for Information: Post-implementation Review (IFRS 8 Operating Segments)

In order to achieve this overarching aim, EFRAG formulates eight comments and recommendations for the standard setting process and two for the due process oversight.

Standard setting process:

• EFRAG welcomes the introduction of a research programme into the IASB due process as this will allow for evidence based agenda setting. EFRAG also suggests concluding the research programme phase by a public consultation phase on the issue and the possible approaches before deciding to add a project to the agenda.
• EFRAG promotes a shared due process between the IASB and regional and national accounting standards bodies as an effective way to improve transparency and efficiency.
• EFRAG believes that the Due Process Handbook should contain guiding principles for identifying and analysing users’ needs to establish the link with the objective as defined in the IASB’s Conceptual Framework.
• EFRAG believes that results of public fatal flaw reviews should be assessed, in a public meeting, by the IASB and only by the staff as they are essential in the identification of potential implementation difficulties or undue costs.
• EFRAG warns that the IASB staff should support the IASB, never try to guide it. The staff should be allowed to make recommendations, but only after having prepared a fair and balanced representation of various views.
• As EFRAG observes that no discussion arises at the IASB level when an interpretation is presented for approval, EFRAG recommends that IFRS Interpretations Committee members' dissenting views should be explained publicly.
• EFRAG urges the Trustees to clearly stipulate that the IFRS Interpretations Committee should not issue any rejection notice that would be akin to an interpretation as some preparers and regulators operate in the expectation that rejection notices are part of the IFRS literature to which preparers should refer.
• EFRAG believes that every decision made in the standard setting process should be subject to the super majority required for the whole standard.

Due process oversight:

• EFRAG believes that the focus of the due process oversight should be on substance, and not on form to ensure that the objectives set for the IASB’s due process are indeed met.
• EFRAG warns of adding too much detail into the Due Process Handbook as that would undermine the principles based character of the standard setting process and leave no room for any flexibility in the due process.

Comments on EFRAG's draft comment letter are invited by 5 September 2012.

Please click for:

• EFRAG press release with link to the draft comment letter (link to EFRAG website)
• A summary of the main suggestions of the updated IFRS Foundation Due Process Handbook in our earlier story on the publication of the Trustees' proposals.

The IVSC had previously issued Guidance Note 14 The Valuation of Properties in the Extractive Industries (GN 14).  However, this guidance was not included in the revamped valuation standards issued in July 2011 on the basis of the outdated IFRS standards referenced in the guidance, the IASB's project on extractive activities and a number of valuation issues that were causing difficulty in the sector that were not referenced in GN14.

Some of the topics discussed in the Discussion Paper include:

• Whether combined standards and guidance for extractive industries are appropriate, or whether separate pronouncements for mining and for oil and gas should be produced
• Whether the project should focus just on the valuation of reserves and resources or should it extend to other assets employed in the industry and to entire businesses in the sector (noting the interdependence of a) reserves and resources, b) capital
  equipment for extraction, c) infrastructure for extraction and, d) intangible assets employed in extraction)
• Identifying the valuation methods most commonly used for valuing producing reserves, reserves undergoing development and reserves or resources subject to exploration, and the inputs and approaches used in each of the market approach, discounted cash flow approach and cost approach
• Identifying intangible assets that are customarily separately identified and valued for acquisition accounting under IFRS 3 Business Combinations (or any similar accounting requirement) or in transactions between entities in the extractive industries  - including what value (if any) is attributed to components of goodwill, and whether intellectual property is separately recognised and measured.

The IVSC is seeking comments on the Discussion Paper by 20 October 2012.  Click for:

• IVSC press release (link to IVSC website)
• IVSC Discussion Paper Valuations in the Extractive Industries (link to IVSC website)

Click through for direct access to the notes:

Monday, 16 July 2012

• Consolidation — Investment entities (IASB-FASB)

Tuesday, 17 July 2012

• Due process (IASB)
• Leases (IASB-FASB)
• Financial instruments — Macro hedging (IASB)

Wednesday, 18 July 2012

• IAS 28 Investments in Associates and Joint Ventures — Application of equity method when an associate/joint venture’s equity changes outside of comprehensive income (IASB)

• Revenue recognition (IASB-education session)

Meeting notes from the other sessions during the meeting will be posted soon.

You can also access the preliminary and unofficial notes taken by Deloitte observers for the entire meeting.