November

ESMA announces enforcement priorities for 2013 financial statements

11 Nov 2013

The European Securities and Markets Authority (ESMA) has announced the priority issues that the assessment of listed companies' 2013 financial statements will focus on.

ESMA considers the following financial reporting topics to be of particular importance for European listed companies in light of the current economic situation:

  • impairment of non-financial assets;
  • measurement and disclosure of post-employment benefit obligations;
  • fair value measurement and disclosure;
  • disclosures related to significant accounting policies, judgements and estimates; and
  • measurement of financial instruments and disclosure of related risks.

ESMA and the national competent authorities will monitor the application of the IFRS requirements outlined in the priorities, with national authorities incorporating them into their reviews and taking corrective actions where appropriate. National authorities may also focus on other locally relevant areas as part of their review and are not be limited to the specific issues identified by ESMA.

ESMA will collect data on how European listed entities have applied the priorities and will publish its findings in early 2015. ESMA expects to publish its findings on the 2012 priorities in early 2014

Please click for (links to ESMA website):

In July 2013, ESMA launched a consultation on guidelines on the enforcement of financial information published by listed entities in the European Union. The proposed guidelines also called for a greater coordination of enforcement activities through the means of common enforcement priorities.

Outcomes from the thirtieth ISAR session

11 Nov 2013

The thirtieth session of the United Nations Conference on Trade and Development (UNCTAD) Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting (ISAR) has held in Geneva on 6-8 November 2013. The meeting focused on the role sound corporate reporting infrastructure plays in promoting investment, financial stability and development. The main agenda items were country feedback on the 'Accounting Development Tool' being developed by ISAR, human resources development challenges in achieving high quality corporate reporting, and a review of good practices in sustainability reporting.

Over the past four years, ISAR has been developing and refining the 'Accounting Development Tool' (ADT), which allows member States to conduct assessments of their accounting infrastructures to identify gaps and determine priorities. The ADT is built on four pillars: a legal and regulatory pillar, an institutional pillar, a human capacity pillar and a capacity-building process pillar. At this meeting, a number of countries provided feedback on their experience with the ADT, including Russia, Ukraine, Ecuador and the Netherlands. The papers available on the UNCTAD website provide a good background on the process of developing corporate reporting in these countries.

A paper prepared by the UNCTAD secretariat provides a summary of the human resource development challenges that arise in high-quality corporate reporting. The paper notes trends such as adoption and implementation of international standards and codes, increasing regional and international cooperation among regulators, and the emergence of education initiatives before outlining some of the key challenges, including:

  • Meeting the need for qualified human resources. Highly qualified human resources are a key component towards a successful implementation of international standards and codes, requiring a high level of human capacity that can be developed through education, training and experience. There is a shortage of accountants in developing countries which do not have full capacity to train qualified professional accountants, and not enough incentives for qualified accountants to remain in their country of origin
  • Strengthening professional accounting organisations (PAOs). Whilst the International Federation of Accountants (IFAC) supports capacity building and monitoring the development of PAOs through its various initiatives, in many countries PAOs are not operating at full capacity due to a lack of financial and/or human resources. Furthermore, some PAOs suffer from low sustainability and fail to operate as independent entities, and in some regions PAOs are fractured, disorganised and underfunded
  • Improving education and training. Although the International Accounting Education Standards Board (IAESB) has been developing International Education Standards (IESs), they are restricted to areas of education that fall under the responsibility of the accountancy profession, and so exclude universities. The path for becoming a professional accountant or auditor differs depending upon the system in place in each country, and there are several players participating in the education and training of professional accountants. Other issues including the ageing of the general academic population, difficulties in filling vacancies in universities, a lack of English language proficiency among academics and students, and a lack of sufficient coverage of ethics in accounting education programmes were also noted.
  • Promoting continuing professional development (CPD). CPD is identified as one of the least developed areas and PAOs in developing countries often do not have operating capacity or the legal force to ensure their members fulfil requirements. Further challenges including around costs and location were also noted.
  • Improving public-sector accounting and education. Only a few PAOs have created committees that issue recommendations and interact with the government to improve accountability, for example by implementing International Public Sector Accounting Standards (IPSAS). A key issue is a lack of training, and a shortage of professional accountants.

Discussion at the ISAR session noted that developing countries often lack sufficiently robust accounting infrastructures to enable them to apply international standards, but that such standards are frequently necessary to ensure confidence from potential foreign investors. Jurisdictions reported an immediate effect on comparability and transparency from the adoption of International Financial Reporting Standards (IFRS) and International Standards on Auditing (ISAs). The importance of reliable financial reporting to public sector governance was also noted.

A further background paper prepared for the meeting focused on best practice guidance for policy makers and stock exchanges on sustainability reporting initiatives. This paper outlines a number of elements to consider when developing or improving sustainability reporting initiatives, such as which institution (e.g. a regulator or stock exchange) is best positioned to introduce such an initiative, scoping issues (both which entities and the subject matter to be covered), whether the disclosure model should be voluntary or mandatory, and design and implementation issues.

The ISAR session noted that the implementation of sustainability reporting initiatives is closely linked to the Sustainable Development Goals which will be adopted after 2015, and will require substantial contributions from entities to make them a reality. The session received presentations from the Global Reporting Initiative (GRI), Johannesburg Stock Exchange (South Africa) and BM&F Bovespa (Brazil), among others.

A number of other topics were also discussed, including on corporate governance issues and updates on international auditing and assurance standards. 

On the day before the start of the ISAR sessions, an 'Accounting for SMEs Forum', jointly organised by UNCTAD and the IFRS Foundation, was also held, and saw discussion on lessons learned in implementing the IFRS for SMEs, possible changes to the IFRS for SMEs, and related capacity-building needs for small and medium-sized entities.

Click to access the following on the UNCTAD website:

Agenda for November 2013 IASB meeting

10 Nov 2013

The International Accounting Standards Board (IASB) is meeting at its offices in London on 20-22 November 2013. Part of the meeting with be held jointly with the Financial Accounting Standards Board (FASB) to discuss the classification and measurement of financial instruments and leases. The IASB will consider rate regulated activities (both the interim standard and research project), possible amendments to IAS 1 (disclosure initiative and going concern disclosures), annual improvements 2010-2012 cycle, revenue recognition, financial instruments impairment, the due process followed and possible finalisation of the next due process steps in a number of narrow scope projects (annual improvements 2012-2014 cycle, amendments to IFRS 10/IAS 28, IAS 16/IAS 38 and IFRS 11), and the post-implementation review of IFRS 3.

The full agenda for the meeting, dated 8 November 2013, 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.

Report on the October IFRS Advisory Council meeting

07 Nov 2013

A report on the IFRS Advisory Council meeting, held in London on 14-15 October 2013, has been made available by the IASB.

The main topics discussed include:

In particular, the report highlighted that the Council emphasised the importance of a converged solution regarding impairment, deferred the decision on how to proceed with the leases project to its February 2014 meeting, stressed the need to be cautious with the implementation and maintenance activities of IFRS, and continued support for the effect analysis initiative.

The full report on the IFRS Advisory Council meeting is available on the IASB Web site.

New Japanese share price index refers to adoption or scheduled adoption of IFRS

07 Nov 2013

The Japan Exchange Group, the Tokyo Stock Exchange and the Nikkei have announced that they will start to calculate a new index "JPX-Nikkei Index 400" from 6 January 6 2014. Among the qualitative factors for screening entities to be covered by the index is 'adoption or scheduled adoption of IFRS (pure IFRS)'.

Making the use of IFRSs a criterion for selecting public companies that comprise a new stock price index to be developed was already expected in Japan’s Business Accounting Council report, The Present Policy on the Application of International Financial Reporting Standards (IFRS).

The idea behind the new index is to comprise companies with high appeal for investors, which meet requirements of global investment standards. Thus, it is hoped, the new index will promote the appeal of Japanese corporations domestically and abroad, thereby aiming to revitalise the Japanese stock market.

Details of the new index "JPX-Nikkei Index 400" are available on the Tokyo Stock Exchange website.

Recording of a seminar on the IASB's Conceptual Framework discussion paper

06 Nov 2013

The New Zealand Accounting Standards Board (NZASB) has recently hosted seminars on the IASB Discussion Paper DP/2013/1 'A Review of the Conceptual Framework for Financial Reporting' and has made the recording of one of the seminars freely available online.

The seminar featured a presentation by IASB member Patricia McConnell supported by the IASB's Research Director Peter Clark outlining the proposals in the Discussion Paper, comments from the NZASB's Deputy Chair Kimberley Crook, outlining some possible implications of the IASB's proposals, and a concluding question and answer session. The recording is slightly longer than 90 minutes.

The video recording and the slide deck for the IASB's presentation are available on the XRB website.

IASB work plan updated

05 Nov 2013

Following its recent meeting, the International Accounting Standards Board (IASB) has updated its work plan. The work plan formalises plans to defer to the first quarter of 2014 the discussion paper on macro hedge accounting and the finalised standards on rate-regulated activities (interim IFRS) and revenue recognition. Deferrals have also been announced on a number of narrow scope projects.

Current status

The revised time table for the major projects is now as follows:

Project

Current status

Next project step

Expected timing

Conceptual Framework — Comprehensive IASB project

Discussion paper

Redeliberations

Q1/Q2 2014*

Financial instruments — Impairment

Redeliberations

Finalised IFRS

Q1/Q2 2014

Financial instruments — General hedge accounting

Redeliberations

Finalised IFRS

Q4 2013

Financial instruments — Macro hedge accounting

Research/deliberations

Discussion paper

Q1 2014*

Financial instruments — Limited reconsideration of IFRS 9 (classification and measurement)

Redeliberations

Finalised IFRS

Q1/Q2 2014

Insurance contracts

Re-exposure

Redeliberations

Q4 2013

Leases

Re-exposure

Redeliberations

Q4 2013

Rate-regulated activities — interim IFRS

Exposure draft

Finalised IFRS

Q1 2014*

Rate-regulated activities — Comprehensive project

Research/deliberations

Discussion paper

Q1 2014

Revenue recognition

Redeliberations

Finalised IFRS

Q1 2014*

* Indicates a change since the prior work plan update.

There have also been changes to the timing of a number of narrow scope projects:


In addition, the publication of a request for information arising from the post-implementation review of IFRS 3 is now expected in the first quarter of 2014.

Click for IASB work plan dated 5 November 2013 (link to IASB website). We have updated our project pages to reflect the updated work plan and other known developments.

Agenda for November 2013 IFRS Interpretations Committee meeting

05 Nov 2013

The IFRS Interpretations Committee will meet at the IASB's offices in London on 12-13 November 2013. The agenda for the meeting is now available.

The Committee will:

  • Continue discussion on various topics (IAS 19 and IFRS 2)
  • Consider finalising three tentative agenda decisions (IAS 19, IFRS 10, IFRS 11)
  • Consider a number of new topics (IAS 39, IFRIC 21, IAS 8, IFRS 11, IAS 17, IFRS 10, IAS 12)

The full agenda for the meeting, as of 5 November 2013, 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.

Compliance checklists for 2013 issued

04 Nov 2013

Deloitte's IFRS Global Office has issued updated versions of the IFRS compliance, presentation and disclosure checklist and the IAS 34 compliance checklist for 2013.

The IFRS compliance, presentation and disclosure checklist 2013 summarises the recognition, measurement, presentation and disclosure requirements set out in IFRSs in issue as of 30 April 2013. IFRSs include Standards as issued by the International Accounting Standards Board (IASB) and the former International Accounting Standards Committee and Interpretations as issued by the IFRS Interpretations Committee and the former Standing Interpretations Committee. It may be used as a guide to assist in considering compliance with the requirements of the IFRSs. It is not a substitute for understanding such pronouncements.

The IAS 34 compliance checklist 2013 summarises the requirements of IAS 34 Interim Financial Reporting, formatted to allow the recording of a review of interim financial statements, with a place to indicate yes/no/not-applicable for each item. The checklist addresses the requirements of IAS 34 as of 30 April 2013.

Click for:

October 2013 IASB meeting notes — Part 3 (concluded)

04 Nov 2013

The IASB's meeting was held in London on 28 October through 1 November 2013, some of it a joint meeting with the FASB. We have posted the final Deloitte observer notes from the meeting, covering the discussions on Macro hedge accounting and impairment.

Click through for direct access to the notes:

Thursday, 31 October 2013

IASB meeting

You can also access the preliminary and unofficial notes taken by Deloitte observers for the entire meeting.

Correction list for hyphenation

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