Mr Hoogervorst opened his speech by commenting on the situation in Japan and the relationship between the ASBJ and the IASB. Japanese representatives serve in all levels of the IASB's governance structure and Japan is among the top financial contributors and intellectual contributors to the IASB's work. As before, Mr Hoogervorst took this as an opportunity to invite Japan to fully embrace IFRSs.

The IASB Chairman then turned to the current work programme and mentioned that an end is in sight on three major standards many constituents have been waiting for: revenue recognition, leases and financial instruments. He promised that the new revenue recognition standard would be issued "in the next few months" and that the final standard would be almost identical between IFRS and US GAAP. On the topic of leases, he admitted that the standard was controversial and many concerns were being voiced. He added however: "We take these concerns very seriously." and pointed out that the IASB had already made some decisions designed to reduce implementation costs. Lastly, Mr Hoogervorst noted that the IASB has finalised its deliberations on financial instruments classification and measurement and impairment.

The main topic of Mr Hoogervorst's speech was the IASB's work on the conceptual framework. Feedback on the IASB's discussion paper published in July 2013 had made very clear that there is still work to be done on measurement. Although constituents had voiced support for the IASB's choice for mixed measurement, they were looking for more in-depth analysis on the different measurement bases and the information they provide.

Turning to the title of his speech, Mr Hoogervorst admitted that another hotly-debated topic in the comment letters was the question of Profit or Loss versus Other Comprehensive Income (OCI). Many constituents asked the IASB to define Profit or Loss as an element and to draw a clear distinction with OCI. Yet while many constituents asked for such a definition very few had suggestions as to how that might be achieved. At this point, Mr Hoogervorst pointed to a discussion paper (link to IASB website) the ASBJ presented at the meeting of the Accounting Standards Advisory Forum (ASAF) in December 2013. Unfortunately, he said, there had been very little consensus among ASAF participants on the details of the paper, yet he described it as "a courageous effort" and "an important contribution to the beginning of the path forward".

The IASB, Mr. Hoogervorst noted, considers Profit or Loss the ‘primary source of information about the return an entity has made on its economic resources in a period’ and should be as inclusive as possible. He added: "It is absolutely vital that Profit or Loss contains all information that can be relevant to investors and that nothing of importance gets left out." Yet he also admitted that a broad definition of Profit or Loss comes at the price of being somewhat rough. As a way out, he suggested accepting that preparers and analysts "may need non-GAAP measures to fine-tune their presentation or assessment of an entity", which he mentioned was acceptable as long as these additional measures build on IFRSs and can be reconciled with the IFRS numbers.

On OCI, Mr Hoogervorst commented that it was obvious from the comment letters received that many constituents struggled with this subject. It was even suggested that the IASB should not even deal with OCI on a conceptual level as it was unlikely that a sound conceptual basis could be found. Stressing that his comments were personal and very preliminary, Mr. Hoogervorst voiced the opinion that Profit or Loss should be the primary indicator of performance in a time period, and that the IASB should be very disciplined in its use of OCI as resorting to OCI too easily would undermine the credibility of net income. Therefore OCI should only be used as an instrument of last resort. He even added the hope that "a future financial presentation project may produce better ways of presenting income of a more uncertain nature, without having to resort to the use of OCI".

Please click for the full text of Mr Hoogervorst's speech on the IASB website.

The draft plan outlines the following in respect of accounting standards:

The SEC will continue to promote the establishment of high-quality accounting standards by independent standard setters in order to meet the needs of investors. [...] Due to the increasingly global nature of the capital markets, the agency will work to promote higher quality financial reporting worldwide and will consider, among other things, whether a single set of high-quality global accounting standards is achievable.

In a similar vein, US representatives (including SEC representatives) at the United States - European Union Financial Markets Regulatory Dialogue (FMRD) held on 30 January 2014 in Washington had stressed the need for general convergence of accounting standards. The joint statement published after the meeting notes:

On accounting, participants noted with concern delays on the convergence of accounting standards and reiterated their commitment to convergence on high quality accounting standards. In this regard, they will take stock of progress made on convergence at the next FMRD in July 2014. Participants also will continue their efforts to ensure consistent application of accounting.

Please click for:

• Press release on the release of the draft strategic plan (link to SEC website)
• Draft Strategic Plan 2014-2018 (link to SEC website, open for comment until 10 March 2014)
• Joint Statement after the United States - European Union Financial Markets Regulatory Dialogue (link to European Commission website)

In the discussion paper, various options for improving the way in which the standards relate to this class of real property were examined. After analysis of the comments made by respondents, the IVSC Standards Board tentatively agreed that the additional requirements for valuing investment property that had been identified as needing consideration would best be dealt with by making amendments to the existing IVS 200 Real Property Interests and by including a section of investment property in IVS 300 Valuations for Financial Reporting.

The discussion paper also raised the view that the current IVS 233 Investment Property under Construction is an anomaly among the standards series as it deals with a subset of an asset class and only a specific type of valuation required under limited circumstances. The Board is suggesting to withdraw the current IVS 233 and to replace it with more broadly based guidance on the valuation of any type of real property that is either in the course of construction or where construction is contemplated.

Comments on both exposure drafts are invited before 30 April 2014. They are available on the IVSC website:

• Exposure Draft - Proposed Changes to IVS 230 and IVS 300
• Exposure Draft - Development Property

The conference will feature presentations by IASB Vice-Chairman Ian Mackintosh, IASB members (Stephen Cooper, Philippe Danjou, Martin Edelmann, Jan Engström, Gary Kabureck, Sue Lloyd and Mary Tokar), senior IASB technical staff and other IFRS experts.

Some of the topics to be covered at the conference include:

• The future of financial reporting
• IASB update:
  • Major IFRSs
  • Implementation
  • Conceptual framework
  • Research projects
• Keynote address
• Panel discussion on IFRS 9

The conference will also have break-out sessions featuring:

In addition, the conference will have special interest discussions on topical reporting issues of IFRS Disclosures and Financial Instruments.

More details, including registration information, are available on the IASB website.

Philippe Maystadt was appointed by EU Commissioner Barnier as a special advisor on 19 March 2013 to set out recommendations to “reinforce the EU's contribution to International Financial Reporting Standards (IFRS), and to improve the governance of the institutions developing these standards.” In his final report presented in November 2013, Mr Maystadt recommended transforming EFRAG with a view to strengthening the European Union's influence in international accounting standard-setting.

In his continued role, Mr Maystadt is expected to co-ordinate the efforts of public and private organisations in implementing the recommendations of the report. Commissioner Barnier commented:

The EU needs a sound framework for the development of high quality accounting standards. I am happy that Mr Maystadt agreed to continue his special mission to ensure that the system for the adoption of the International Financial Reporting Standards (IFRS) put in place by the European Union is effective and enables the EU to play its full role in the debate. I am confident that the expertise of Mr Maystadt will significantly benefit the swift implementation of the necessary reforms so that our undertakings and the users of their financial statements can as soon as possible benefit from high-quality international accounting standards.

Please click for the press release on the European Commission website.

The topics discussed were as follows (click through to access detailed Deloitte observer notes for each topic):

Wednesday, 29 January 2014

Items for continuing consideration

• IAS 12 – Recognition of deferred tax assets for unrealised losses
• IAS 12 – Recognition and measurement of deferred tax assets when an entity is loss making
• IAS 19 – Employee benefit plans with a guaranteed return on contributions or notional contributions
• IFRS 10 – An investment entity subsidiary that also provides investment-related services
• IFRS 10 – Exemption from preparing consolidated financial statements requirements

Finalisation of tentative agenda decisions

• IAS 29 – Applicability of the concept of financial capital maintenance defined in constant purchasing power units
• IAS 32 – Classification of mandatorily convertible instruments subject to a cap and a floor with an issuer option to convert into the maximum (fixed) number of shares
• IAS 32 – Classification of instruments that mandatorily convert into a variable number of shares upon a ‘non-viability’ contingent event

New issues

• IAS 32 – Classification of an instrument that is mandatorily convertible into a variable number of shares, subject to a cap and a floor

Items for continuing consideration (continued)

• IFRS 11 – Analysis of implementation issues

New issues (continued)

• IAS 12 – Impact of an internal reorganisation on deferred tax
• IAS 12 – Threshold of recognition of an asset on uncertain tax position

Feedback from the IASB

• IAS 1 – Disclosure requirements about an assessment of going concern (update on IASB's decision not to proceed with proposed amendments)

Administrative session

• Interpretations Committee work in progress

Thursday, 30 January 2014 (09:00-12:55)

New issues (continued)

• IFRS 3 & IFRS 10 – Identification of the acquirer in accordance with IFRS 3 and the parent in accordance with IFRS 10 in a stapling arrangement
• IFRS 10 – A non-investment entity’s application of the equity method for investment entity investees
• IAS 16 – Disclosure of carrying amount information for assets stated at revalued amounts
• IAS 37 – Measurement of liabilities under IAS 37 within the context of emission trading schemes
• IAS 28 – Inconsistency with paragraph 31 of IAS 2
• IAS 1 – Issues related to the application of IAS 1
• IAS 34 – Condensed statement of cash flows

Highlights were the publication of:

• final comment letter on IASB DP A Review of the Conceptual Framework for Financial Reporting
• draft comment letter on IASB ED Annual Improvements to IFRSs 2012–2014 Cycle
• first papers in EFRAG's new Short Discussion Series
• final endorsement advice on IASB narrow scope amendment Defined Benefit Plans: Employee Contributions (Amendments to IAS 19)
• draft endorsement advice on the Annual Improvements to IFRSs 2010–2012 and 2011–2013 Cycles

Additional topics discussed in the newsletter are:

• IFRS 3 Business Combinations — Subsequent accounting for acquisition step-ups
• Long-term investment business models
• Accounting for macro hedge accounting
• IFRS 9 Financial Instruments — Impairment
• IFRS 11 Joint Arrangements
• Post-implementation review of IFRS 3
• IASB ED Equity Method: Share of Other Net Asset Changes — Proposed amendments to IAS 28

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

The agenda for the meeting is summarised below:

Agenda papers for this meeting will be made available on the IASB's website in due course.

Following the introduction of the <IR> Framework in December 2013, the three organisations sponsoring the research award have identified three areas that need to be developed further.  They therefore invite research proposals addressing the following areas:

1. Meeting users' information needs – looking at what users of integrated reports from large private sector, for-profit companies, want to see. This project would focus on the similarities and differences between the needs and expectations of different equity and debt holders, and others who provide financial capital.
2. Materiality and completeness vs. conciseness in Integrated Reporting – focusing on the theoretical, policy and practical issues concerning the role of materiality in determining the balance between completeness and conciseness in an integrated report.
3. Organisational characteristics and Integrated Reporting – focusing on the theoretical, policy and practical issues concerning application of the Framework to different types of organisations in different jurisdictions and under different circumstances.

A combined sum of up to £50,000 will be awarded for up to three projects that meet the criteria set. The deadline for research proposal submissions is 28 February 2014.

Please click for more information on the ACCA website:

• Press release
• Call for Research Proposals: Integrated Reporting

Participants will have the opportunity to discuss the approach for European standard-setting in public sector accounting with European and national policymakers, representatives from the public sector, accountants and auditors. The roundtable is free of charge but the number of participants is limited.

Please click for more information on the FEE website.