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EFRAG Update with a summary of the October 2012 EFRAG meetings

10 Oct 2012

The European Financial Reporting Advisory Group (EFRAG) has released the October 2012 issue of its EFRAG Update newsletter.

The newsletter contains a summary from the EFRAG meeting held in October 2012 between the EFRAG Technical Expert Group and Consultative Forum of Standard Setters. The topics discussed were:

  • The FRC note for the IFRIC’s The Sharman Report and disclosure of material uncertainties under IFRS,
  • Update on IAS 28,
  • EFRAG operational and due process improvements,
  • Update on the latest developments on the proposed EU Accounting Directive,
  • IFRIC draft interpretation Put-option written on non-controlling interests,
  • Canadian Institute of Chartered Accountants paper Toward a Measurement Framework for Financial Reporting by Profit-Orientated Entities,
  • Autorité des Normes Comptables paper Proposals for Accounting for GHG Emissions Rights reflecting companies’ business models,
  • IASB Review Draft General Hedge Accounting,
  • IASB Project Leases, and
  • EFRAG’s Proactive Project The Role of the Business Model in Financial Reporting.

Click for the EFRAG Update (link to EFRAG website).

Agenda for the October IFRS Advisory Council meeting

10 Oct 2012

The IFRS Advisory Council is meeting in London on 22-23 October 2012. The tentative agenda for the meeting (updated as of 18 October 2012) is now available.


Agenda for the meeting

Monday, 22 October 2012

  • Welcome and Chairman’s preview
  • Overview of last four months
  • IASB activities (Work plan update, project update, implementation and other activities)
  • Agenda proposal — Rate regulated activities
  • Breakout discussions — Rate regulated activities
  • Agenda proposal — Revisions to IAS 41 Agriculture
  • Emerging Economies Group
  • Updates to the IASB's due process/External involvement in the IASB's standard setting process
  • Report back — Rate regulated activities
  • Improving consistent application of IFRSs
  • Breakout discussions — Improving consistent application of IFRSs
  • Report back — Improving consistent application of IFRSs

Tuesday, 23 October 2012

  • Update on Trustee activities
  • IASB and National Standard Setters
  • Establishing IASB's dedicated research capacity
  • Breakout discussions — Establishing IASB's dedicated research capacity
  • Building the IFRS network
    • Interaction between IIRC and IASB
    • Interaction between the FSB (and G20) and the IASB
    • Interaction between the Basel Committee and IASB
  • Report back — Establishing IASB's dedicated research capacity
  • Leases — Project update
  • Sum up discussions
    • What does the Council want to communicate to the IASB and the Trustees at this stage

Deloitte comment letter on the IFRS Foundation draft review

09 Oct 2012

Deloitte’s IFRS Global Office has submitted a letter of comment to the IFRS Foundation on its draft review 'IFRS Foundation Constitution—Drafting Review: separating the role of the IASB Chair and the Executive Director.'

We support the IFRS Foundation’s change to separate the role of IASB Chair and the Executive Director and commend them for acting quickly to implement the change recommended by both the Trustees’ Strategy Review Report and the IFRS Foundation Monitoring Board governance review.

The comment letter notes the following:

[W]e support the changes to the IFRS Foundation's Constitution, subject to our proposed changes that aim to reinforce the separation between the IFRS Foundation Executive Director and the IASB Chair.

Please click for access to our comment letter.

See our previous articles on:

Agenda for October IASB meeting

09 Oct 2012

The IASB will meet in London on 15-19 October 2012. Topics to be discussed include insurance contracts, macro hedge accounting, financial instruments, revenue recognition, confirmation of due process before the issue of exposure drafts on IAS 28 and the 2011-2013 cycle of annual improvements, and consideration of a recommendation to suspend the project on IAS 8 effective dates and transition. A number of sessions will be held jointly with the FASB.

The full agenda for the meeting, dated 8 October 2012, can be found here.  We will post any updates to the agenda, and our Deloitte observer notes from the meeting, on this page as they are available.

EFRAG endorsement status report 8 October 2012

08 Oct 2012

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.

The updated report reflects that the Accounting Regulatory Committee (ARC) has voted in favour of the adoption of the Amendments to IFRS 1 Government Loans.

Click to download the Endorsement Status Report as of 8 October 2012.

You can find all past endorsement status reports here.

IOSCO to consider 'larger role' in IFRS

08 Oct 2012

The Board of the International Organization of Securities Commissions (IOSCO) has agreed to consider an IFRS Foundation request to play a larger role in global efforts to further the international adoption and implementation of International Financial Reporting Standards (IFRS).

The IOSCO Board, which was formed as part of a restructure of IOSCO earlier this year, agreed to consider the move in response to a request in a meeting with Michel Prada, the Chairman of the Trustees of the IFRS Foundation, "as a means to improve the comparability and integrity of financial statements across the globe".

IOSCO’s Committee on Multinational Disclosure and Accounting will take up the proposal.  The Committee was previously a standing sub-committee of the IOSCO Technical Committee which has now been subsumed within the IOSCO Board.  The proposals would extend the previously stated responsibilities of the Committee, which include monitoring the development and interpretation of IFRS, providing comments on proposed standards and interpretations, and promoting consistent regulatory interpretation and enforcement of IFRS.

The development was announced by IOSCO as part of outlining the outcomes of the IOSCO Board's inaugural meeting held on 3-4 October 2012.  The meeting also saw discussion on work mandated by the G20 Leaders and the Financial Stability Board (FSB) on regulatory reform, together with other projects, including such topics as global legal entity identifiers, over-the-counter derivatives, regulation of money market funds and oil price reporting.  The meeting also considered emerging market perspectives and noted support for the possible creation of an IOSCO Foundation.

Click for IOSCO press release (link to IOSCO website).

France moves forward with accounting for emission rights on basis of the business model

04 Oct 2012

The French standard setter Autorité des normes comptables (ANC) has adopted on 4 October 2012 regulation 2012-03 on the accounting for Greenhouse Gas (GHG) emission rights and regulation 2012-04 on the accounting under French GAAP for energy saving certificates.

Under these regulations, GHG emission rights and energy saving certificates are accounted for differently based on the entity’s business model.  Under the “production” or “energy saving” business models, the GHG emission rights and energy saving certificates are considered as “administrative” raw materials consumed by GHG emissions or energy sales.  Accordingly, an asset (raw materials valued at cost) is recognised when GHG emissions or energy sales are lower than emission rights or energy saving certificates held. A liability is recognised when GHG emissions or energy sales are higher than emission rights or energy saving certificates held. Under the “trading” business model, GHG emission rights and energy saving certificates are recognised as inventory at cost (subject to depreciation) until sold.

The GHG emission rights regulation shall be applied for annual periods beginning on or after 1 January 2013 and the energy saving certificates regulation shall be applied for annual periods beginning on or after 1 January 2014. Earlier application for annual periods beginning on or after 1 January 2012 is permitted for these two regulations.

Full texts of the regulations are available on the ANC website (French language only):

The new regulations follow from the ANC discussion paper Accounting for Emissions Trading Schemes Reflecting Companies’ Business Models published in May 2012.

Agenda for the October 2012 IFRS Foundation Trustees meeting

03 Oct 2012

The IFRS Foundation Trustees will meet in Brussels on 12 October 2012. The meeting will consist of reports from the IASB Chair, the Due Process Oversight Committee, the Education and Content Services Committee, and the IFRS Advisory Council chair.

The agenda is available here.

Japan's BAC resumes deliberations on IFRS

03 Oct 2012

The Business Accounting Council of Japan (BAC) met on 2 October 2012 to resume its deliberations over the possible use of IFRSs in Japan. This BAC meeting was the first one after the issuance of the interim discussion paper on 2 July. No consensus was formed at the session.

During the session, BAC member reviewed and exchanged views on developments around IFRS since the last BAC meeting in June. Matters reviewed include 1) the final report by the U.S. SEC Staff issued in July, 2) recent IASB activities, and 3) responses to Invitation to Comment on IASB/IFRS IC due process handbook. On future courses, a FSA official commented that matters identified in the interim discussion paper would be continued to be considered in future. It was clarified that such matters include identification of acceptable/unacceptable requirements in IFRSs and accumulation of voluntary use of IFRS, leading to evaluation of merits and issues in using IFRS, among others. The official also mentioned that additional understanding of effects in countries that adopted IFRS such as Canada and Korea would be obtained.

The handouts for the meeting as well as minutes are expected to be posted to the FSA website (Japanese only).

The next session is yet to be scheduled.

Click for our previous article on the BAC's interim discussion paper on IFRS.

IASB podcast on insurance contracts

03 Oct 2012

The IASB has made available a podcast on the current state of debate in the IASB/FASB joint project on insurance contracts. The podcast, by Darrel Scott (IASB member) and Andrea Pryde (Technical Principal) report on developments in the project following the September 2012 joint IASB/FASB meeting.

In particular, this podcast focuses on the boards' transition requirements for the forthcoming Standard and the IASB decision on targeted re-exposure of Insurance Contracts proposal.

To listen to the podcast, please click here (link to IASB website).

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