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The Group of Friends of Paragraph 47 issues its Charter, encourages other governments to join

11 Dec 2012

The Group of Friends of Paragraph 47, formed by the governments of Brazil, Denmark, France and South Africa during the Rio+20 conference in June 2012, has published its Charter. The group is named for paragraph 47 of the outcome document of the conference which acknowledged the importance of corporate sustainability reporting.

In its Charter, the group welcomes the unanimous endorsement of the conference outcome document entitled The future we want, and acknowledges the importance of engagement between governments, the UN and other relevant stakeholders.

The Charter encourages the continuous exchange of experience and best practice on policy and market regulation between governments to promote sustainability reporting. It also maintains that sustainability reporting is relevant globally, and that the needs of developing countries should be given particular attention.

The members have committed to choose the most relevant policy tools applicable to their culture and jurisdiction to further sustainability reporting and to engage with interested stakeholders in open and constructive dialogue. To this end the formation of an ‘international reference group’ that will enable a structured stakeholder engagement process is currently discussed.

In the Charter, the four founding group members expressly invite other governments to join. The Norwegian Government has announced its intention to join the Group.

The Charter is available on the Global Reporting Initiative website. The initiative acts as the group’s secretariat.

2013 IFRS 'Blue Book' now available

07 Dec 2012

Further to our story on 6 November 2012, the IFRS Foundation has published the 2013 IFRS Consolidated without early application.

This volume (nicknamed the 'Blue Book') contains all official pronouncements that are mandatory on 1 January 2013. It does not include IFRSs with an effective date after 1 January 2013. The Blue Book sells for £65 plus shipping (academic, developing country, and volume discounts apply). The publication can be purchased through the IASB web store.

FEE roundtable on better financial reporting through audit committee improvements

07 Dec 2012

The Federation of European Accountants (Fédération des Experts-comptables Européens, FEE) has announced a roundtable to further discuss improvements to the functioning of audit committees, which are considered essential for the quality of financial information provided by companies. The roundtable follows the publication of a discussion paper on the same topic in June 2012. It will be held in Brussels on 5 February 2013.

The discussion paper published in June 2012 was intended to be a starting point to enhance thought-leadership on the future evolution of audit committees within Europe. To foster the debate, FEE is now offering the conference on 'How to improve Audit Committees further?'.

This high level conference will bring European decision makers and relevant stakeholders including audit committee members, auditors, investors and regulators together to discuss further improvements of the functioning of audit committees. Stimulating closer cooperation throughout the audit engagement, especially the exchange of high quality information between audit committees and the external auditor, is thought to be of great benefit to the company and to the external auditor. To this extent, and considering that one or more members of an audit committee are often trained accountants, FEE is aiming at enlarging and widening the debate.

The conference is free of charge. However, as places are limited, attendance is upon invitation only. Should you be interested in attending, FEE invites you to submit your interest indicating your name, title and organisation by sending an email to

Agenda for December 2012 IASB meeting

06 Dec 2012

The IASB will meet in London on 13-17 December 2012. Topics to be discussed include conceptual framework, IAS 12, macro hedge accounting, insurance contracts, revenue recognition, IAS 36, agriculture and rate regulated activities. Revenue recognition on Monday will be discussed jointly with the FASB.

The full agenda for the meeting, as of 6 December 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.

FEE publishes policy statement on the EC proposals for the recast of the 4th and 7th Accounting Directives

06 Dec 2012

On 25 October 2011 the European Commission published proposals for revising the Accounting Directives and the Transparency Directive which have been discussed widely throughout Europe. The final report of the European Parliament Legal Affairs Committee (JURI) of 25 September 2012 however seems to indicate that there is a gap between the views in the European Parliament and the Council. The Federation of European Accountants (Fédération des Experts-comptables Européens, FEE) believes that some of the differences are due to misconceptions and has therefore published a Policy Statement that is intended to inform the debate and also to represent the accountants' view as a third major party involved in the discussions.

Among the misconceptions FEE makes out that were either already introduced with the EC's proposals or crystallized in the ensuing debate is the believe that accounting and auditing are mere burdens and should be reduced as far as possible. FEE states:

Accounting and auditing are not “administrative burdens” but essential tools to enable managers to manage, investors to invest and enterprises to trade, grow and create wealth and employment; accounting and auditing also have a public interest dimension by contributing to improving the functioning of markets and enhancing corporate governance, transparency and stability.

FEE also warns of the excessive focus that has been given to country-by-country reporting. Although FEE welcomes initiatives to increase transparency in this area the statement encourages the parties involved "to redirect their attention and focus on key accounting issues that are essential for the establishment of a robust and long-lasting European accounting framework".

The Policy Statement also considers general matters related to accounting that should be discussed further. Among these are disclosures, the use of fair value accounting and a possibility for member states to permit the use of the IFRS for SMEs.

Please click for access to the Policy Statement on the FEE website.

Austrian parliament adopts law that will see the establishment of an IFRS enforcement body

06 Dec 2012

On 5 December 2012, the Austrian parliament passed the 'Rechnungslegungs-Kontrollgesetz'. This law will lead to the establishment of an enforcement process regarding the financial reporting of companies with securities traded on a regulated market. Austria is the last country of the European Union that does not have an IFRS enforcement process yet.

The law will come into force in July 2013 and and is applicable to the financial statements of all groups listed on the Vienna stock exchange. Considering the size of the review panel yet to be set up, examining the financial reporting of companies will probably rely on sample testing.

The enforcement process is modeled on the German enforcement system that has been successfully operating since 2005. It will be performed in two stages; the first stage involves a government-appointed privately organised institution, the Austrian Review Panel for Financial Reporting (Österreichische Prüfstelle für Rechnungslegung) with the review panel as its active body, while the second stage is performed by the Federal Financial Supervisory Authority (Finanzmarktaufsicht, FMA), which has sovereign authority.

The responsibilities within the enforcement process will be shared between the review panel and the FMA:

  • the review panel ensures that the financial statements have been drawn up in accordance with the applicable accounting standards,
  • the FMA decides on enforcement priorities and audit plans,
  • should a company not be willing to cooperate with the review panel or question the decision of the review panel, the final decision lies with the FMA,
  • the FMA will carry out the official proceedings.

Please click for the full text of the newly passed law (German language document, link to Austrian parliament website).

EFRAG draft comment paper on emissions trading schemes

05 Dec 2012

The European Financial Reporting Advisory Group (EFRAG) has issued a draft comment paper discussing the need for accounting guidance on emissions trading schemes.

In its draft comment paper, EFRAG highlights the initiative taken by the Autorité des normes comptables (ANC), noting that the French standard setter revived the debate on emissions trading schemes in May 2012, when it issued the discussion paper Accounting for Emissions Trading Schemes Reflecting Companies’ Business Models. Since IFRIC 3 Emission Rights was withdrawn in July 2005 and the project deferred in November 2010, discussion of specific guidance on the topic has stalled and resulted in diverging practices on the accounting of assets and liabilities arising from participation in an Emission Trading Scheme.

Using the ANC's discussion paper as a starting point, EFRAG's draft comment letter analyzes specific aspects of emissions trading schemes and poses questions to constituents, with the expectation that comments received will help shape the EFRAG recommendation to the IASB on specific accounting guidance on emissions rights.

Please click for the following documents on the EFRAG website:

Comments are invited by 30 April 2013.

IASB work plan updated

04 Dec 2012

The International Accounting Standards Board (IASB) has updated its work plan. The finalisation of the hedge accounting section of IFRS 9 has been deferred to the first quarter of 2013, a new project for the next cycle of annual improvements introduced, and various other project milestones introduced or clarified.

Details of the changes are:

In addition, the IASB has introduced a new format for the presentation of its work plan, implementing a new tabbed format for display of its various projects.  The 'research projects' tab lists a number of projects which are not currently being actively pursued by the IASB.

Due process documents expected before the end of 2012

The following due process documents are expected to be issued by the end of 2012 (this includes those items already noted above in some cases):

Click for IASB work plan as of 4 December 2012 (link to IASB website). We have updated our project pages to reflect the updated work plan and other known developments.

FASB and IASB chairs discuss global accounting standards

04 Dec 2012

At the 2012 AICPA National Conference on Current SEC and PCAOB Developments, FASB Chairman Leslie Seidman and IASB Chairman Hans Hoogervorst discussed global accounting standards and the future of IFRS in America and around the world.

Ms Seidman spoke first, making it clear that she was summarising her personal views, rather than the official position of the FASB or the FAF. She discussed the unique needs of US stakeholders, noting that short time frames and heavy regulation require clear, unambiguous standards. "I don't believe our system can function over the long run with only broad principles", Ms Seidman noted.

On the topic of convergence, the FASB Chairman stated that "a goal of 100 percent comparability (such as a single set) is not achievable in the near term, for very legitimate reasons, in some of the world's largest capital markets." She suggests that the FASB and IASB should complete the MOU projects, and going forward, the Boards should continue to have discussions with other standard setters to improve accounting standards and make IFRS, US GAAP, and other global accounting standards more comparable. Ms Seidman advocated for a "less formal approach to convergence", similar to what the IASB and FASB had done in the past, noting that "even though the relationship is bound to change, that does not mean we think convergence is over or that divergence will occur".

In his straight-talking speech, Mr Hoogervorst noted that IFRS has enjoyed a strong global impact for many years, and that the success of IFRS does not depend on US convergence. He said that the IASB and the world are looking to the US for a clear sign of their intentions with IFRS and that the US's current position for the need of "greater comparability" between the standards will not suffice. He (and the world) expected that the SEC would have made a decision on transition by now. Mr Hoogervorst made it clear that, in the future, US influence on IFRS will be "commensurate with its commitment to our standards". He discussed the results of the IFRS Foundation staff analysis which concluded that transition to IFRS in the United States would be successful.

Click for:

IFRS Foundation conference in Latin America announced

04 Dec 2012

The IFRS Foundation announced the dates for its conference in Latin America, which will be held in São Paulo, Brazil on Monday 15 April 2013 and Tuesday 16 April 2013. The conference will feature presentations by Hans Hoogervorst, Chairman of the IASB, and Pedro Malan, Trustee of the IFRS Foundation, and will focus on the future of IFRS and updates on projects and regulations.

Highlights of the conference topics include the following:

  • a technical update on Standards;
  • lessons learned in applying IFRS in Latin America; and
  • a regulatory perspective on the adoption of IFRS.

The conference will also feature:

Interactive break-out sessions led by IASB members and senior staff: Half-day special interest sessions:
  • Revenue recognition;
  • Leases;
  • Financial instruments;
  • Conceptual Framework;
  • Insurance contracts; and
  • The IFRS for SMEs.
  • Investor-focused IFRS update;
  • Implementing IFRSs 10 and 12;
  • Implementing IFRSs 11 and 12;
  • Implementing IFRS 13; and
  • IFRS Interpretations Committee progress and plans.

Additional conference details, including registration, are available here.

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