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Summary of the ASAF June meeting

  • ASAF (Accounting Standards Advisory Forum) (mid blue) Image

Jul 03, 2014

The IASB has posted to its Web site a summary of the Accounting Standards Advisory Forum (ASAF) June 2014 meeting. During the meeting, ASAF members discussed various IASB projects, such as the disclosure initiative, the equity method of accounting, insurance contracts, macro hedging, and the conceptual framework.


Disclosure initiative

ASAF members discussed an exposure draft published by the Brazilian Accounting Standards Committee proposing that immaterial information should not be disclosed. They also considered a comment letter by the European Financial Reporting Advisory Group (EFRAG) on the consultation on alternative performance measures launched by the European Securities and Markets Authority and discussed whether the IASB was the appropriate organization to address non-IFRS information. Finally, they considered the FASB’s work on its disclosure framework project.


Equity method of accounting

The ASAF discussed an IASB staff paper that sought input from ASAF members on the scope of the research project on the equity method of accounting. During the discussion, some ASAF members suggested that it might be useful to consider the project in two stages: a short-term simplification project and a long-term conceptual review of the application of the equity method. The discussion also referred to the EFRAG paper and the KASB paper on this topic.


Insurance contracts

The ASAF considered the release of the contractual service margin for nonparticipating contracts and contracts with participating features, and whether the IASB should develop a separate model for contracts with participating features, whether shareholders’ share of returns from underlying items should unlock the contractual service margin, and whether there should be specific requirements for options and guarantees.


Macro hedging

The IASB staff wanted to gather initial feedback from ASAF members on key aspects of the IASB’s discussion paper DP/2014/1, Accounting for Dynamic Risk Management: a Portfolio Revaluation Approach to Macro Hedging. The discussion assessed the need for an accounting approach, the scope of the application of the portfolio revaluation approach, and other risks. Participants generally agreed that before going ahead with the approach, there would need to be acceptance of the consideration of behavioralization. ASAF members also considered revaluation and transfer pricing transactions as well as operational complexity and other comprehensive income.


Conceptual framework

ASAF members discussed the reporting of income and expenses and the choice of measurement based on a paper by the Financial Reporting Council (UK), suggesting a justification for a mixed measurement model and principles for distinguishing between profit or loss and other comprehensive income.

A full summary of the meeting is available on the IASB’s Web site. The ASAF’s next meetings are scheduled for September 25–26, 2014, and December 4–5, 2014.

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