January

Meeting notes from IFRS Foundation Trustees meeting

28 Jan 2014

The IFRS Foundation Trustees held an open meeting on 28 January 2014 in Milan. We have posted Deloitte observer notes from the meeting covering Mr Prada's summary of the joint IFRS Foundation Trustees / IFRSF Monitoring Board meeting held on 27 January 2014, and Mr Scott Evans report on an earlier meeting of the Due Process Oversight Committee.

Click through for direct access to the notes for each session:

IFRS Foundation Trustees meeting (15:00-15:30)

January 2014 IASB meeting notes — Part 2 (concluded)

28 Jan 2014

The IASB's meeting was held in London on 21-23 January 2014, some of it a joint meeting with the FASB. We have posted the final Deloitte observer notes from the meeting, covering the discussions on classification & measurement and impairment.

Click through for direct access to the notes:

Wednesday, 22 January 2014

Thursday, 23 January 2014

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

ESAs disagree with suggested voting model in the new EFRAG Board

28 Jan 2014

In a joint letter to Michel Barnier, European Commissioner for Internal Market and Services, the three European Supervisory Authorities (ESAs) - ESMA, EBA and EIOPA - have voiced serious concerns regarding the voting model in the new EFRAG Board proposed in Philippe Maystadt's report with recommendations for enhancing the EU’s role in promoting high quality accounting standards. The ESAs have announced to decline the offers of membership they have received should they not be given the sole right to decide on endorsement advice to the EU Commission on new and revised IFRSs.

The three ESAs have issued their letter in the middle of the deliberations on the EFRAG reform, where EFRAG is currently discussing the implementation of the reform with the European national standard-setters, the EFRAG member organisations and the organisations funding EFRAG in order to propose the details of the reformed structure to the EU Commission.

In his final report Mr Maystadt proposed to replace the current Supervisory Board with a high-level Board, which would approve the comment letters addressed to the IASB and the endorsement advice letters to the Commission, relying on the work of a technical group. The Board would consist of 16 members: four European public institutions (including the ESAs), five stakeholders representing private interests and seven national standard-setters. The Board is expected to express a single view and individual members would only have the possibility of abstaining or remaining silent should they not agree with the majority view.

The ESAs are convinced that this voting model might lead to cases where the voting results do not reflect the public interest as the objectives of the private stakeholders or national standard-setters "are unlikely to be always aligned" to the objective of protecting the public interest. They therefore suggest that only the public authorities represented in the proposed board should decide on final endorsement advice to the European Commission. Input from the members representing private interests and the results of the public consultation process would be considered by the public authorities when coming to their final conclusion.

In the final paragraph of the letter, the ESAs declare that they will only join the new Board as observers and continue with their present way of acting should their concerns not be addressed.

 

Consequently, in the absence of any changes to the proposed voting model, the three ESAs will refrain from accepting membership but ask for an observer status in the new EFRAG SB. Furthermore, the three ESAs will reserve the right to submit their opinion on the endorsement advice on the use of existing, new and amended IFRS to the EC. In line with current practice the ESAs will also continue to submit their own comment letters to the IASB by bringing their own perspectives to the development of new financial reporting standards and thus fulfilling their obligations from their respective founding regulations.

Click to download the full letter from the ESMA website.

IFRS Foundation Monitoring Board announces new members

28 Jan 2014

Following its 2012 ‘Final Report on the Review of the IFRS Foundation’s Governance’, the Monitoring Board decided to expand its membership by up to four permanent members, primarily from major emerging markets, and two rotating members. The first two new permanent members were announced today.

The appointments of the Comissão de Valores Mobiliários (CVM) of Brazil and the Financial Services Commission (FSC) of Korea will become effective once they become signatories of "Charter of the IFRSF Monitoring Board". Applications for additional permament seats on the Monitoring Board are still being analysed. The Monitoring Board also intends to start the process for appointing the two rotating seats as soon as possible.

All applications were and will be evaluated against the criteria and assessment processes for membership which were completed at the Monitoring Board's 6 February 2013 meeting.

Please click for the Monitoring Board's press release on the IOSCO website.

IASB work plan update for January 2014

28 Jan 2014

Following its recent meeting, the International Accounting Standards Board (IASB) has updated its work plan. The target date for publication of the impairment and limited classification and measurement amendments to IFRS 9 have been clarified as being expected in the second quarter of 2014, the release of a Request for Information on the post-implementation review of IFRS 3 brought forward to the first quarter of 2014, and expected redeliberation periods in a number of projects clarified. The work plan also reflects the commencement of preliminary work on the research project on the equity method of accounting.

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–Q3 2014*

Financial instruments — Impairment

Redeliberations

Finalised IFRS

Q2 2014*

Financial instruments — Macro hedge accounting

Research/deliberations

Discussion paper

Q1 2014

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

Redeliberations

Finalised IFRS

Q2 2014*

Insurance contracts

Re-exposure

Redeliberations

Q1 2014

Leases

Re-exposure

Redeliberations

Q1 2014

Rate-regulated activities — interim IFRS

Exposure draft

Finalised IFRS

Q1 2014

Rate-regulated activities — Comprehensive project

Research/deliberations

Discussion paper

Q2 2014

Revenue recognition

Redeliberations

Finalised IFRS

Q1 2014

* Indicates a change since the prior work plan update.

Changes concerning narrow scope projects are:

In addition, the IASB's research project on the equity method of accounting has been moved to 'preliminary work conducted' section of the research agenda.

Click for the IASB work plan dated 27 January 2014 (link to IASB website). We have updated our project pages to reflect the updated work plan and other known developments.

Meeting notes from joint IFRS Foundation Trustees and Monitoring Board meeting

27 Jan 2014

The IFRS Foundation Trustees held a joint meeting with the Monitoring Board on 27 January 2014 in Milan. The meeting received updates on the activities of the Monitoring Board, IFRS Foundation, International Accounting Standards Board and Due Process Oversight Committee, and received an update on the use of IFRS around the world. We have posted Deloitte observer notes from the meeting.

Click through for direct access to the notes for each session:

Joint IFRS Foundation Trustees and Monitoring Board meeting (11:30-13:00)

January 2014 IASB meeting notes — Part 1

27 Jan 2014

The IASB's meeting was held in London on 21-23 January 2014, some of it a joint meeting with the FASB. We have posted Deloitte observer notes from Wednesday's joint session on insurance contracts and Thursday's sessions on IFRS Interpretations Committee issues, amendments to IAS 1, and leases (together with the FASB).

Click through for direct access to the notes:

Wednesday, 22 January 2014

Thursday, 23 January 2014

You can also access the preliminary and unofficial notes taken by Deloitte observers for the entire meeting. Notes from the remaining sessions will be posted in due course.

Consultation paper on IPSASB governance

24 Jan 2014

The Review Group for the governance and oversight arrangements of the International Public Sector Accounting Standards Board (IPSASB) has issued a public consultation paper on the future governance and oversight of the IPSASB and IPSASs as earlier consultations found that concerns about the governance and oversight of the IPSASB are some of the reasons cited by national authorities for not adopting IPSASs. One of the possibilities mentioned is giving monitoring and oversight of the IPSASB to the IFRS Foundation's Monitoring Board and Trustees.

The consultation paper focuses on governance and oversight processes in the setting of accounting standards for the public sector and proposes changes to strengthen the position of the IPSASB and IPSASs. The consultation paper includes:

  • Background of the IPSASB.
  • Existing standard setting models.
  • The oversight and governance of the IPSASB.
  • Proposal for strengthening the IPSASB’s governance.
  • Specific questions to consider.

Among the specific questions is the following:

Question 1: Do you agree there is a need to strengthen the monitoring and oversight of the IPSASB? If so, do you favor:
  • Monitoring and oversight of the IPSASB by the IFRS Foundation’s Monitoring Board and Trustees?
  • Separate monitoring and oversight boards for the IPSASB, while it remains under the auspices of the IFAC?
  • Reestablishing the IPSASB outside of IFAC with its own monitoring and oversight bodies?
  • Another approach, including some combination or sequenced implementation (e.g., short-term/long-term approaches) of the above options?

The Governance Review Group consists of members from the World Bank, International Monetary Fund (IMF), Organization for Economic Cooperation and Development (OECD), Financial Stability Board (FSB), the International Organization of Securities Commissions (IOSCO) and the International Organization of Supreme Audit Institutions (INTOSAI). 

Comments are due by 30 April 2014. The Review Group will meet in spring of 2014 to discuss the feedback received and will finalise the recommendations by the end of 2014.

For more information, see the press release and consultation paper on the OECD website.

EFRAG and ASBJ hold joint meeting

24 Jan 2014

Representatives of the European Financial Reporting Advisory Group (EFRAG) and the Accounting Standards Board of Japan (ASBJ) held a bilateral meeting in Tokyo on 21 and 22 January 2014. The EFRAG and ASBJ provided updates on their respective projects and exchanged views on the development of accounting standards.

EFRAG and ASBJ discussed the following topics:

Further, the EFRAG and ASBJ agreed that continued mutual cooperation on accounting issues and potential concerns will enhance their viewpoints when deliberating with the ASAF or other national standard setters.

The next meeting between the EFRAG and ASBJ will be held in Brussels.

A press release is available on the EFRAG website.

FASB issues guidance on service concession arrangements

24 Jan 2014

The FASB has issued Accounting Standards Update (ASU) No. 2014-05, “Service Concession Arrangements,” which prohibits an operating entity from accounting for a service concession arrangement as a lease. In addition, the ASU states that “infrastructure used in a service concession arrangement should not be recognized as property, plant, and equipment of the operating entity.”

This ASU affects operating entities that enter into service concession contracts with a public-sector entity grantor to operate the grantor’s infrastructure to provide a public service. It is effective for public business entities with fiscal years beginning after 15 December 2014, and interim periods therein. For entities that are not public business entities, the guidance becomes effective for annual periods beginning after 15 December 2014, and interim periods beginning after 15 December 2015. Early adoption is permitted.

For more information, see Deloitte's Accounting Journal Entry and ASU 2014-05 on the FASB’s website.

 

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.