This site uses cookies to provide you with a more responsive and personalised service. By using this site you agree to our use of cookies. Please read our cookie notice for more information on the cookies we use and how to delete or block them.
The full functionality of our site is not supported on your browser version, or you may have 'compatibility mode' selected. Please turn off compatibility mode, upgrade your browser to at least Internet Explorer 9, or try using another browser such as Google Chrome or Mozilla Firefox.


IASB work plan updated

Apr 30, 2013

The International Accounting Standards Board (IASB) has updated its work plan. Following its April meeting, the IASB changed the timing of expected milestones in macro hedge accounting, rate-regulated activities, and revenue recognition. Also, a number of updates to the narrow scope projects have been made.

Summary of changes

Details of the changes are:

Updates to major projects

Updates to narrow-scope projects

Projects for which exposure drafts are expected in the second quarter include insurance contracts and leases. A discussion paper on the IASB's conceptual framework project is also expected in the second quarter. In addition, due process documents in a number of other projects are expected in the second or third quarters.

Click for IASB work plan dated April 30, 2013 (link to the IASB's Web site). We have updated our project pages to reflect the updated work plan and other known developments.

Study on the state of integrated reporting and sustainability reporting in the United States

Apr 30, 2013

The Investor Responsibility Research Center Institute (IRRCI), a not-for-profit organization funding objective research focused on corporate governance and responsibility, has released a report "Integrated Financial and Sustainability Reporting in the United States" that finds that all but one S&P 500 company reports some form of sustainability disclosure. However, even though sustainability reporting as such is widespread, the extent, quantification, and connectivity can still be much improved.

In numbers, the study finds that:

  • 499 of the companies in the S&P 500 made at least one sustainability related disclosure, but only 7 integrate financial and sustainability reporting.
  • 74 percent of the companies quantified at least one sustainability-related initiative financially, although they frequently also mentioned other initiatives without quantification.
  • 43 percent of the companies linked executive compensation to some type of sustainability criteria.

The following topics were most often reported on (in descending order): environmental management, employment, climate change, hazardous waste, product formulations, waste management, water use, ethics, and human rights.

However, although the report shows that disclosure of sustainability information across a wide range of topics per se is commonplace today, it also states that:

[I]solated sustainability disclosures are of limited value, both to corporate managements trying to improve the bottom line and to investors trying to gauge risks and opportunities. The challenge today is to connect the dots between sustainability initiatives and corporate earnings and then to quantify the causal relationship. . . . For far too many sustainability factors, across far too many reports, quantification is lacking, leaving managers without tools and investors to wonder how carefully they are being managed.

The report also includes a review of existing regulatory requirements and an overview of current efforts to advance integrated reporting for example by the Global Reporting Initiative (GRI), the International Integrated Reporting Council (IIRC), and the Sustainability Accounting Standards Board (SASB).

The IRRCI offered a webinar on May 3, 2013, to review the findings and respond to questions regarding the report. Registration for the webinar is possible through the press release on the IRRCI's Web site.

Click to download the full report (link to the IRRCI's Web site).

Rate regulation consultative group membership announced

Apr 29, 2013

The IASB has announced the members to its consultative group for the Rate-regulated Activities research project.

The group consists of 15 members, made up of senior professionals who are participants in the financial reporting process of entities subject to rate regulation. Also announced are the official observers of the consultative group. The following is the list of members and observers:

Member Name Organization Country
Jacob Buys Eskom Holdings SOC Ltd South Africa
Leonardo George de Magalhães Companhia Energética de Minas Gerais (Cemig) Brazil
Richard McCabe AltaLink Management Ltd Canada
Tim Murray RBC Capital Markets, Royal Bank of Canada Canada
Michel Picard KPMG Canada
Duane DesParte Exelon Corporation USA
Sherman Myers Standard & Poor's USA
John Leotta Deloitte Touche Tohmatsu Australia
Poon Man Wah CLP Power Hong Kong Limited Hong Kong
Keyman Kim Korea Gas Corporation (KOGAS) Korea
Pascale Mourvillier GDF SUEZ France
Lily Ayalon Government Companies Authority Israel
Jesús Herranz Lumbreras Ferrovial SA Spain
Dennis Deutmeyer Ernst & Young United Kingdom
Michael Timar PricewaterhouseCoopers United Kingdom
Official Observers
Bryan Craig U.S. Federal Energy Regulatory Commission (FERC)
Karen Taylor Ontario Securities Commission (OSC)
European Financial Reporting Advisory Group (EFRAG)

Click to view the press release on the IASB's Web site. For more information on the project, see our rate-regulated activities project page.

April 2013 IASB meeting notes — Part 3 (concluded)

Apr 26, 2013

The IASB's meeting was held in London on April 23–25, 2013. Deloitte observer notes are posted from Wednesday's session on conceptual framework and Thursday's sessions on hedge accounting, conceptual framework, annual improvements — 2012–2014 cycle and 2010–2012 cycle, post-implementation review of IFRS 8, and levies (IAS 37/IFRIC 6).

April 2013 IASB meeting notes — Part 2 (continued)

Apr 25, 2013

The IASB's meeting was held in London on April 23–25, 2013. Deloitte observer notes are posted from Tuesday's educational session on IFRS for SMEs and the regular sessions on IFRS for SMEs and narrow-scope amendments (IAS 36) and from Wednesday's session on the annual improvements 2012–2014 cycle (IFRS 7).

Click for direct access to the notes:

Tuesday, April 23, 2013

Wednesday, April 24, 2013

    Note: The IASB originally had scheduled a Friday session. However, the IASB progressed in its discussions faster than expected, and the sessions planned for Friday morning were discussed Thursday afternoon.

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

    Summary of the CMAC March 2013 meeting

    Apr 25, 2013

    The IASB has released a summary of the Capital Markets Advisory Committee (CMAC) meeting that was held in London on March 7, 2013.

    The topics discussed at the meeting included:

    • Work plan update. An explanation was given on the process of updating the work plan after every IASB meeting. Updates were also provided on major IASB projects, narrow-scope amendment projects, the IFRS for SMEs comprehensive review project, and research projects.
    • Accounting Standards Advisory Forum (ASAF). CMAC members discussed the work aimed at creating the ASAF and also the role the ASAF will have with the IASB.
    • Conceptual framework project:
      • Elements of financial statements, reporting entity and measurement — CMAC members discussed the objective of financial reporting as described in the conceptual framework. Many believed that the main objective of financial reporting should be to provide useful information to users. Also discussed were the main changes made to the qualitative characteristics of useful financial information, the definitions of a liability and equity, and the principles for measurement.
      • Presentation and disclosure — CMAC members were presented with the IASB's proposals for the possible use of other comprehensive income (OCI). There was an overall agreement among CMAC members with the concept of segregating comprehensive income into profit or loss and OCI. In addition, CMAC members supported the proposal to present bridging items and mismatched remeasurements in OCI.
    • Feedback on disclosure survey and Discussion Forum on disclosures. CMAC members were presented, by the IASB staff, with the outcome from a survey and a Discussion Forum on disclosure. Most CMAC members believed that (1) financial reports focus primarily on compliance and that excessive detail, (2) generic language lead to nonuseful information in disclosures during practice, and (3) some types of disclosures in financial statements are more likely to contain irrelevant information.
    • Insurance contracts. The IASB staff presented the CMAC members with an overview of the insurance contracts project, which contained three approaches to revenue recognition for insurance contracts:
      • "Premiums written" (recognizing premiums as revenue at the beginning of the contract).
      • "Premiums due" (recognizing premiums as revenue when they are billed to the policyholder).
      • "Premiums earned" (recongizing premiums as revenue as the insurance coverage is provided to the policyholder).

      Overall, CMAC members supported the premiums earned approach.
    • Financial instruments: Classification and measurement. The IASB staff presented an overview of the IASB's proposed narrow-scope amendments to IFRS 9, which introduces a third measurement category. In general, the CMAC members were opposed to having a third measurement category and preferred the simplicity of having two categories.

    The full meeting summary is available on the IASB's Web site.

    IASB exposes guidance on regulatory deferral accounts

    Apr 25, 2013

    The International Accounting Standards Board (IASB) has published ED/2013/5 'Regulatory Deferral Accounts'. This proposed interim standard is intended to allow entities that currently recognise regulatory assets and regulatory liabilities in accordance with their previous GAAP to continue to recognise the effects of rate regulation under IFRSs until the longer term rate-regulated activities project is completed.

    The proposed interim standard is only applicable upon the initial adoption of IFRSs and therefore must be applied at the same time as an entity applies IFRS 1, First-time Adoption of International Financial Reporting Standards. The proposed interim standard cannot be applied by entities that have previously adopted IFRSs, and entities applying this interim standard, if approved, must meet specified eligibility criteria. Specifically, (1) there must be an authorized body (i.e., the rate regulator) that restricts the price that the entity can charge its customers for the goods or services that the entity provides, and (2) the price established by regulation is designed to recover the entity’s allowable costs of providing the regulated goods or services.


    Core principles of the proposed interim standard

    The proposed interim standard:

    1. Permits (but does not require) an entity that adopts IFRSs to continue to use its previous GAAP accounting policies as accepted in its local jurisdiction for the recognition, measurement, and impairment of regulatory deferral account balances.
    2. Requires entities to present regulatory deferral account balances as separate line items in the statement of financial position and to present movements in those account balances as a separate line item in the statement of profit of loss and other comprehensive income.
    3. Requires specific disclosures to identify clearly the nature of, and risks associated with, the rate regulation that has resulted in the recognition of regulatory deferral account balances.


    Key features addressed in the proposed interim standard


    • The draft interim standard replaces the commonly used phrases “regulatory assets” and “regulatory liabilities” with the terms “regulatory deferral account debit balances” and “regulatory deferral account credit balances,” respectively. The longer term rate-regulated activities project is intended to address the issue of whether regulatory balances meet the conceptual definition of assets and liabilities and therefore the draft interim standard refers to the balances as “debit balances” or “credit balances” in the absence of a clear conclusion on whether these balances are assets and liabilities under IFRSs.

    Application of other standards

    • The draft standard requires that all other IFRSs be applied first such that each asset and liability recognized in the statement of financial position, such as property, plant, and equipment; income taxes; and employee benefits, comply with the requirements of the other IFRS standards. The regulatory deferral accounts represent incremental amounts that are recognized over and above the assets and liabilities recognized under the other standards.
    • The proposed interim standard includes some specific guidance on how other standards such as IAS 12, Income Taxes; IAS 36, Impairment of Assets; and IFRS 5, Non-current Assets Held for Sale and Discontinued Operations, should be applied to regulatory deferral balances.


    • An entity will be required to present a subtotal representing total assets (or liabilities) before regulatory balances and then present regulatory deferral account debit (or credit) balances followed by total assets (or liabilities). In summary, the statement of financial position will present assets in the following manner, with similar presentation requirements for liabilities.


      Current assets  xxx
      Long-term assets  xxx
      Total assets before regulatory deferral debit balances: xxx
      Regulatory deferral debit balances      xxx
      Total assets xxx
    • Similarly, the presentation requirements for the statement of profit or loss also requires separate presentation of the movements in the regulatory deferral accounts. Therefore, the statement of profit or loss would have to present a subtotal of profit or loss before the presentation of a balance representing the net movement in all regulatory deferral accounts.
    • An additional measure of earnings per share, both basic and fully diluted, excluding the net movement on regulatory deferral balances, must also be presented in addition to the basic and fully diluted earnings per share measurement otherwise required by IAS 33, Earnings per Share. Both measures (including and excluding the movement in regulatory deferral balances) must be shown with equal prominence.


    • The proposed interim standard includes specific disclosure requirements to enable users to evaluate the nature of, and the risks associated with, the specific rate regulation regime and the effects of that rate regulation on an entity's financial position, financial performance and cash flows. These disclosures include:
      • Specific reconciliations of the carrying amount at the beginning and end of the period for each category of regulatory deferral account that is individually material (and others in aggregate).
      • The rate of return or discount rate allowed by the regulator to reflect the time value of money that is applicable to each regulatory deferral balance.
      • The remaining periods over which the entity expects to recover or amortize the carrying amount of each regulatory deferral account debit balance or reverse each regulatory deferral account credit balance.

    Other matters

    • The proposed interim standard provides guidance on changes in accounting policies for the recognition and measurement of regulatory deferral balances for those entities that were eligible to apply the guidance in this draft interim standard upon the adoption of IFRSs and chose to do so.
    • The ED identifies consequential amendments to IFRS 1.


    Further information


      The comment period for the ED ended on September 4, 2013.

      Please click for:

      April 2013 IASB meeting notes — Part 1

      Apr 24, 2013

      The IASB's meeting was held in London on April 23–26, 2013. Deloitte observer notes are posted from Tuesday's session on conceptual framework.

      Click for direct access to the notes:

      Tuesday, April 23, 2013

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

      Russell Golden named next FASB chair

      Apr 23, 2013

      The Financial Accounting Foundation (FAF) has announced that the next chair of the FASB will be Russell G. Golden. Effective July 1, 2013, Mr. Golden will be succeeding the current chair, Leslie F. Seidman.

      Mr. Golden’s first term as chair will last until June 30, 2017, when he will be eligible for a second term lasting three years.

      Mr. Golden was a partner in Deloitte & Touche LLP before joining the FASB as a senior technical adviser in 2004. In July 2007, he was appointed director of technical application and implementation activities for the FASB. From 2008 to September 2010, he was the technical director of the FASB and chaired the FASB’s Emerging Issues Task Force. Since September 2010, Mr. Golden has served as a FASB member.

      A press release on this announcement is available on the FAF's Web site.

      In a conference call held soon after the announcement, Mr. Golden commented that his initial priorities will be completion of the four MOU projects with the IASB (financial instruments, revenue recognition, leases, and insurance) and a focus on improving accounting for U.S. private companies.

      In discussing convergence of accounting standards, Mr. Golden noted the importance of the FASB and IASB remaining committed to converged solutions, including in the longer term. He pointed out that significant progress had been made in many areas over a number of years, notwithstanding a recent focus on differences in the IASB's and FASB's proposals on financial instruments impairment.

      Mr. Golden further commented:

      I believe convergence is extremely important, and I've been working on it here as a member of the FASB staff and a member of the FASB board. I'm looking forward to working with the IASB to try to arrive at improved converged conclusions. I think the fact that the FASB was invited to join the Accounting Standards Advisory Forum is a good thing. I think that participating in this is consistent with the FASB's long-term objective of promoting greater convergence in financial accounting standards, with the ultimate goal of achieving agreement and acceptance of those standards across the globe.

      In response to a question about potential conflicts between globally converged outcomes and local constituent needs, Mr. Golden stressed that "every attempt" should be made to develop converged solutions, but concluded "while it's important to consider convergence, what is most important in my mind is that we are developing improved solutions for our various stakeholders."

      We are grateful to the FAF for permission to post information from the FASB's New FASB Chair conference call.

      Summary of the April 2013 Trustees' meeting

      Apr 23, 2013

      The IFRS Foundation Trustees have announced the summary of the conclusions from their meeting held in London on April 9–11, 2013.

      The summary of the meeting includes the following reports:


      Report of the Trustees’ Executive session

      • First meeting of the newly formed Accounting Standards Advisory Forum (ASAF)
        The Trustees were encouraged that the meeting had gone well, with a high-quality level of debate.
      • Funding of the IFRS Foundation
        The Trustees discussed various different approaches to putting in place a more longer-term funding arrangement.
      • Recent developments in both the United States and Japan
        The Trustees noted the need to ensure that the question regarding a decision on domestic use in the United States remains an item on the SEC’s work program. Developments in Japan seemed to indicate to the Trustees a speeding up in a positive way of the Japanese consideration of the adoption of IFRSs.
      • Nominations
        The Trustees agreed to extend for a period of 9 months (with an option to extend to up to one year) the term of Tsuguoki (Aki) Fujinuma as vice chairman of the Trustees.
      • Education and content services
        The Trustees reviewed progress toward the development of an eIFRS "app," subject to successful user testing.
      • Constitution review
        Staff will begin preparations to complete the next review of the Constitution by 2015.
      • Research program
        The Trustees discussed plans to develop a research capability.


      Meeting with the Monitoring Board

      • Report of the chairman of the IASB
        Hans Hoogervorst, chairman of the IASB, provided the Trustees and the Monitoring Board with an update on the IASB’s activities, including international engagement, progress on the four major outstanding convergence projects, and work on the conceptual framework project.
      • Report of the chairman of the Due Process Oversight Committee
        Scott Evans, chairman of the Due Process Oversight Committee (DPOC), reported on the recent activities of the DPOC. Major projects include the revision of the Due Process Handbook including the development of a Due Process Protocol.
      • Regional outreach activity
        As part of the Trustees’ meeting, the IFRS Foundation hosted a joint event with the Institute of Chartered Accountants in England and Wales (ICAEW) at which the Trustees and the leadership of the IASB met with representatives of key stakeholders to discuss issues under the theme The relationship between financial reporting and long-term investing.

        The full summary of conclusion of the IFRS Foundation Trustees' meeting is available on the IASB's Web site.

        Correction list for hyphenation

        These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.