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Report from recent IFASS meeting released

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12 Dec 2013

A report has been issued summarising the discussions at the meeting of the International Forum of Accounting Standard Setters (IFASS) held in Brussels on 19‐20 September 2013.

Highlights from the meeting included:

IASB and IFRS Foundation developments - general update and discussion

  • Participants discussed the strategies and governance of the work of the International Financial Reporting Standards Foundation Trustees, the IASB's efforts in developing and improving IFRSs and other noteworthy matters. General comments on the current projects of the IASB and the IFRS Foundation included concerns that the IASB and U.S. cultures regarding revenue recognition differ, the observation that the conceptual framework project is very challenging and that the issues need to be thoroughly thought through and a statement that participants are not necessarily aware where educational material is used.
  • It was also observed that although stakeholders have asked for a period of calm, IFRIC is dealing with a large number of issues, issuing negative agenda decisions and annual improvements. It was criticised that that many of the issues being dealt with through the annual improvements are not annual improvements as such but other minor amendments. Although IFRIC is very active, the output mainly consists of negative agenda decisions. Participants wondered how affected stakeholders should proceed when IFRIC issues are rejected by IFRIC because they are not widespread. They also noted that issues were not always addressed on a timely basis.

Topical Issues

Participants then discussed several topical issues:

  • Rate regulation: Potential basis for recognition,
  • Application issues related to IFRS 11 Joint Arrangements,
  • Integrated reporting – roles of NSS and views formed,
  • Disclosures required when partly owned subsidiaries are consolidated,
  • Report‐back regarding discount rate issues,
  • Presentation of exceptional items in the statement of profit or loss,
  • Post‐Implementation Review of IFRS 3 Business Combinations.

Conceptual Framework Issues

One focal point of the IFASS meeting was the conceptual framework project of the IASB, especially regarding the aspects of measurement and prudence. On measurement the key messages were that the IASB should not use a pragmatic approach as starting point and that the conceptual framework should be aspirational in nature. Prudence was discussed in three break‐out groups with one group coming to the conclusion that the conceptual framework should provide a clear definition or description of prudence, one opining that prudence should be discussed in the conceptual framework as an item to be considered in limited circumstances and one believing that an appropriate balance should be struck between all the qualitative characteristics.

Charter

Participants discussed the draft of the new Charter indented to replace the existing statement outlining relationship of IASB and NSSs and taking the creation of ASAF and other developments into account.

Reports from regional groups

Reports were received from the AOSSG, EFRAG, GLASS, and PAFA representatives.

Update on the IASB's work plan

Participants were informed about the status of major projects (leases, insurance, macro hedging, impairment, and general hedge accounting) as well as the progress regarding several (in part new) narrow-scope projects.

 

Click for the full report (link to UK Financial Reporting Council website). The next IFASS meeting will be held in New Delhi on 6‐7 March 2014.

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