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EFRAG Update with summaries for the late November conference call and the December EFRAG TEG meeting

14 Dec 2011

The European Financial Reporting Advisory Group (EFRAG) has released the December 2011 issue of its EFRAG Update newsletter.

On 18 November 2011, EFRAG held a meeting via public conference call. The EFRAG TEG meeting was held 7 to 9 December 2011. Highlights of the meetings were a draft endorsement advice on the amendments of IFRS 1 and the draft comment letters to the IASB's draft on government loans.

Click for the EFRAG Update (PDF 347k, link to EFRAG website). Links to earlier issues are available here.

IASB publishes an interview with Wayne Upton

14 Dec 2011

The IASB has posted on its website an interview with Wayne Upton, Chairman of the IFRS Interpretations Committee and the Director for International Affairs of the IASB.

Mr Upton has been with the IASB since 2001, and previously worked at the FASB for almost 20 years. In an interview with financial journalist Robert Bruce, who is also the resident commentator for IAS Plus, Mr Upton compares his United States and global roles, the challenges of global standard setting such as consistency in application across jurisdictions and the needs of emerging economies, and his plans as Chairman of the IFRS Interpretations Committee.

Click for access to the interview (link to IASB website).

EFRAG calls for deferral of consolidation and joint arrangement standards

12 Dec 2011

The European Financial Reporting Advisory Group (EFRAG) has publicly released a letter it is has written to the IASB calling for the deferral of the effective date of the 'suite of standards' on consolidation, joint ventures and disclosures.

In the letter, EFRAG requests a deferral of the effective date of IFRS 10 Consolidated Financial Statements, IFRS 11 Joint Arrangements, IFRS 12 Disclosure of Interests in Other Entities, IAS 27 Separate Financial Statements and IAS 28 Investments in Associates and Joint Ventures.

EFRAG's reasons for requesting a deferral include:

  • during EFRAG field-tests of IFRS 10 and IFRS 11, some participants noted that they have concerns that the mandatory effective date of 1 January 2013 would not allow them sufficient time to implement the new requirements and make the required assessments. Concerns about implementing IFRS 10 are concentrated in the financial services and insurance industries, whereas concerns about IFRS 11 relate to the need to access detailed information regarding joint arrangements
  • the IASB is currently undertaking its project on investment entities and is also considering possible amendments to the transitional requirements around IFRS 10 (including at the December IASB meeting this week), both projects affect the application of IFRS 10 and create uncertainty for constituents
  • although the above concerns relate to IFRS 10 and IFRS 11, EFRAG notes that given the considerable interaction between the requirements of the standards in the package, all standards must continue to have the same effective date, requiring a deferral for all five standards.

The standards are currently effective for annual periods beginning on or after 1 January 2013.  EFRAG believes that the effective date of the Standards should be deferred to the later of (a) 1 January 2014 or (b) 12 months after the amendments to IFRS 10 and the standard on investment entities have both been published.

Click for access to the EFRAG letter (link to EFRAG website).

The Bruce Column — Prada takes the Chair

12 Dec 2011

Robert Bruce, our resident, regular columnist, provides the background to the news that Michel Prada has been appointed Chairman of the Trustees of the IFRS Foundation.

Michel Prada has taken the helm as the new Chairman of the Trustees of the IFRS Foundation. To be the guiding hand at the top of the organisational pyramid which oversees the IASB and international standard setting is a complex role. But it is a role which has shown its worth in the past. Both Paul Volcker and Tommaso Padoa-Schioppa, have amongst others, added the necessary strength and intelligent sense of mission to the task in the past.

Now it is up to Prada to help steer the organisation forward in times which continue to be uncertain. There is still a decision due from the US regulatory body, the SEC, on whether IFRS can become the norm for major US corporates. Decisions have to be made following the consultations on the IASB’s future agenda. These are not quiet times. The whole organisation will be the better for more solidity at the centre.

And Prada has the skills. And he knows the landscape intimately. He is a onetime head of the executive and technical committees of IOSCO, the international stock exchange body. He was a founding member of the Financial Stability Board. He was a member of the Financial Crisis Advisory Group which produced rigorous work on the role of accounting standards in the financial crisis. He played a leading role in the idea of European adoption of IFRSs in 2005. He chairs the International Valuation Standards Council. And he chaired the main French regulatory body, first the COB, then the AMF, for twelve years.

As Prada put it himself a few years ago: ‘The task of the IASB will be complete only if, and when, IFRS will be accepted on every financial market without local additional requirements. I also recognize that the world will continue to change and that the existing accounting standards are not etched in stone forever. But setting accounting standards is not, let me say it again, an academic exercise. It should take into account the practical aspects and realities of this world’.

Robert Bruce
December 2011

Related links

  • Our article on the announcement of Michel Prada as Chairman of the Trustees of the IFRS Foundation.

Michel Prada appointed as Chairman to the Trustee of the IFRS Foundation

12 Dec 2011

The Trustees of the IFRS Foundation have announced the appointment of Michel Prada as Chairman of the Trustee of the IFRS Foundation.

Michel Prada is the former Chairman of the Executive and Technical Committees of the International Organization of Securities Commissions (IOSCO) and currently serves as the Chairman of the International Valuation Standards Council, co-Chairman of the Council on Global Financial Regulation and is a non-executive Director of the International Centre for Financial Regulation. His initial term begins 1 January 2012 and will expire in three years. Please click for IASB press release (link to IASB website) and our overview of Trustees working currently for the IFRS Foundation.

IASB announces public roundtable meetings on its agenda consultation

09 Dec 2011

The IASB plans to hold a series of public roundtable meetings for its Request for Views Agenda Consultation 2011.

You can access the meeting details on our upcoming events page.

Updated EFRAG 'endorsement status report'

08 Dec 2011

The European Financial Reporting Advisory Group (EFRAG) has updated its report showing the status of endorsement, under the EU Accounting Regulation, of each IFRS, including standards, interpretations, and amendments.

Click to view the Endorsement Status Report as of 8 December 2011. Currently, the following twelve IASB pronouncements await endorsement action:

  • IFRS 9 Financial Instruments
  • IFRS 10 Consolidated Financial Statements
  • IFRS 11 Joint Arrangements
  • IFRS 12 Disclosures of Interests in Other Entities
  • IFRS 13 Fair Value Measurement
  • IAS 27 Separate Financial Statements (2011)
  • IAS 28 Investments in Associates and Joint Ventures (2011)
  • Amendments to IAS 12 Deferred tax: Recovery of Underlying Assets
  • Amendments to IFRS 1 Severe Hyperinflation and Removal of Fixed Dates for First-Time Adopters
  • Amendments to IAS 1 Presentation of Items of Other Comprehensive Income
  • Amendments to IAS 19 Employee Benefits
  • IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine


IFAC proposes tweaks to its membership obligations in respect of international standards

08 Dec 2011

The Board of the International Federation of Accountants (IFAC) has released for public comment proposed revisions to its Statements of Membership Obligations (SMOs).

IFAC member bodies are required to comply with the SMOs by the IFAC Constitution, and SMOs form the basis of the IFAC Member Body Compliance Program. They serve as a framework for professional accountancy organisations focused on serving the public interest by adopting, or otherwise incorporating, and supporting implementation of international standards and maintaining adequate enforcement mechanisms to ensure the professional behavior of their individual members.

The SMOs include obligations on IFAC member bodies to identify and undertake actions to have the following adopted and implemented in their jurisdictions:

  • International Financial Reporting Standards (IFRSs), in respect of at least public interest entities
  • International Public Sector Accounting Standards (IPSASs).

Responsible parties are also encouraged to consider the use of the IFRS for SMEs in relation to non-public interest entities. In jurisdictions where English is not an official or widely used language, member bodies are also required to use best endeavours to establish or support processes for translations of international standards, and exposure drafts to the extent practicable.

The amendments proposed clarify these (and other) obligations by providing guidance on how member firms are required to respond in light of the type of influence the member body has in the standard setting process. The proposals would revise the terminology used from "incorporation" of international standards to "adoption and implementation".

Comments on the proposals are due by 5 March 2011. Click for IFAC press release (link to IFAC website).

Deloitte IFRS podcast on integrated reporting

07 Dec 2011

A new Deloitte podcast is available.

Nick Main, Deloitte Global Leader, Sustainability & Climate Change Services and Robert Bruce discuss the concept of 'integrated reporting' and the International Integrated Reporting Council's (IIRC) Discussion Paper Towards Integrated Reporting – Communicating Value in the 21st Century.

Nick discusses the key changes proposed and provide insights into what integrated reporting is all about. The podcast is available for download here (18:30 mins 8 mb) or via iTunes; it is one of a series that will be posted to IAS Plus.

SME Implementation Group publishes two final Q&As

07 Dec 2011

The SME Implementation Group (SMEIG) has published two final questions and answers (Q&As) on the IFRS for SMEs. Q&As are non-mandatory guidance.

Q&A 2011/02 Entities that typically have public accountability addresses whether an entity has public accountability. It states that, "an entity has public accountability if its debt or equity instruments are traded in a public market, or if it is in the issuing such instruments for trading in a public market, or if it holds assets in a fiduciary capacity for a broad group of outsiders as one of its primary businesses." The Q&A also noted that under certain circumstances, such entities may not have public accountablity, such as captive insurance subsidiaries and investment funds with only a few participants.

Q&A 2011/03 Interpretation of 'traded in a public market' in applying the IFRS for SMEs addresses how to interpret 'traded in a public market' in the definition of public accountability. It defines a public market as "a domestic or foreign stock exchange or an over-the-counter market, including local and regional markets," however, if exchanges only occur between parties involved in the management of the entity, it is not considered 'traded in a public market.'

SMEIG has stated that an entity that does not have public accountantability is eligible to use the IFRS for SMEs.

SMEIG has two principal responsibilities:

  1. to develop non-mandatory guidance for implementing the IFRS for SMEs in the form of questions and answers (Q&As) that will be made publicly available to interested parties on a timely basis, and
  2. to make recommendations to the International Accounting Standards Board (IASB) if and when needed regarding the need to amend the IFRS for SMEs.

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