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Summary of ASAF September meeting

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Oct 14, 2013

The summary of the Accounting Standards Advisory Forum (ASAF) September 2013 meeting has been made available by the IASB staff. During the meeting, the members discussed various IASB projects, such as disclosure, insurance contracts, leases, financial instruments, and the conceptual framework.



The ASAF explored the IASB's Disclosure Initiative project and an approach to rethinking a disclosure and presentation framework. The IASB staff provided an overview of the project including the five short- and medium-term strategies. ASAF members supported the project; however, some members felt the timeline was over-ambitious and noted that the IASB should include input from regulators and auditors. Also, the IASB staff provided an overview on the proposed amendments to IAS 1. The ASAF members generally supported the proposals, but suggested some drafting changes. They suggested that the IASB should investigate ways to make accounting policies more entity-specific and whether the policies should be presented with detailed notes. In addition, ASAF members expressed mixed views on the issue of “net debt,” since “net debt” is not a feature of financial reporting in some jurisdictions. To wrap up the disclosure discussion, the ASAF members viewed a presentation by Kevin Stevenson, Chair of the AASB, on his paper, “Rethinking the Path From an Objective of Economic Decision Making to a Disclosure and Presentation Framework.”

Insurance Contracts

The ASAF discussed the IASB's exposure draft on insurance contracts. Members supported the IASB's direction regarding insurance contract revenue and transition, but had concerns about the accounting mismatches that would arise as a result of applying the proposals relating to contracts with cash flows that vary with underlying items, and those relating to the use of other comprehensive income.


The ASAF reviewed the IASB's exposure draft on leases. Members had mixed comments on the proposals. While most members supported the direction of the proposals in the exposure draft, some had concerns about the complexity of having dual approaches. The ASAF members also suggested specific points for the IASB and FASB to consider regarding the measurement of lease assets and liabilities, the definition of a lease, disclosure, and transition.

Financial Instruments

Macro-hedge accounting

The IASB staff presented a summary of the macro-hedge accounting portfolio revaluation approach to solicit feedback by the ASAF. The ASAF members suggested the model should (1) be extended to include risks other than interest rate, (2) clarify how the model handles financial products managed on the basis of expected maturity, and (3) carefully consider the scope of the model. The ASAF suggested an extended comment period of six months for the discussion paper that is expected to be issued later this year.


The ASAF discussed the proposals in the IASB's exposure draft on expected credit losses. The IASB staff presented some clarifications and enhancements to the proposals on the responsiveness of the general model, the measurement objective for Stage 1, and the definition of “default.” Some ASAF members commented that the proposals should be finalized. They also stressed that it is important that the objectives and principles remain clear and do not become too prescriptive. Further, some members needed additional clarification on the definition of 12 months' expected credit losses and that the IASB should consider divergence that exists in IFRSs when measuring impairment losses.

Conceptual framework

ASAF members discussed the EFRAG's bulletin on prudence. Many ASAF members felt the IASB should consider reintroducing the concept of prudence in the conceptual framework. They emphasized the importance of providing a clear definition for “prudence” so it is not used differently by different groups of people and suggested that it should be described as the exercise of caution under conditions of uncertainty.

Future meetings

The ASAF will next meet on December 5 and 6, 2013, in London. Also, the date of its September 2014 meeting was changed from September 8 and 9 to September 25 and 26.


A full summary is available on the IASB Web site.

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