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August

2014 IFRS 'Green Book' — Coming Soon

29 Aug 2014

The IFRS Foundation has announced that 'A Guide through IFRS 2014' will be available soon.

This volume (nicknamed the "Green Book") will include the full text of the Standards and Interpretations and accompanying documents (such as the Basis for Conclusions) issued by the IASB as at 1 July 2014 with extensive cross-references and other annotations. This edition does not contain documents that are being replaced or superseded but remain applicable if a reporting entity chooses not to adopt the newer versions early.

The new requirements since 1 July 2013 include:

The Green Book will sell for £94 plus shipping for the two book set (academic, developing country, and volume discounts apply). You will find more information and ordering details here.

IPSASB seeks to clarify which entities should apply IPSASs

28 Aug 2014

The International Public Sector Accounting Standards Board (IPSASB) has released a consultation paper that seeks comments on the applicability of International Public Sector Accounting Standards (IPSASs) to government business enterprises (GBEs) and other public sector entities. The consultation paper is part of an IPSASB project to consider the types of entities for which IPSASs should be developed.

Currently, the scope of each IPSAS specifically excludes GBEs and references the Preface to International Public Sector Accounting Standards, which states that GBEs apply International Financial Reporting Standards (IFRSs) issued by the International Accounting Standards Board (IASB).

IPSAS 1, Presentation of Financial Statements, defines a government business enterprise as an entity with all the following characteristics:

  • Is an entity with the power to contract in its own name
  • Has been assigned the financial and operational authority to carry on a business
  • Sells goods and services, in the normal course of its business, to other entities at a profit or full cost recovery
  • Is not reliant on continuing government funding to be a going concern (other than purchases of outputs at arm’s length), and
  • Is controlled by a public sector entity.

The consultation paper, The Applicability of IPSASs to Government Business Enterprises and Other Public Sector Entities, seeks to address concerns that a wide range of entities are being identified as GBEs, through diversity of practice in the application of the definition, and some entities being described as GBEs even though they may not meet all the requirements of the definition.

The paper identifies two possible approaches as to defining the IPSAS reporting mandate:

  1. Describe the characteristics of public sector entities for which IPSASs are intended, without defining GBEs. The high-level characteristics would be based on either:
    1. current and developing IPSASB literature (including the Conceptual Framework), or
    2. terms and explanations from the Government Finance Statistics (GFS)
  2. Modifying the current definition of a GBE in IPSAS 1 to either:
    1. clarify the current GBE definition to make it easier to be consistently applied, without modifying the definition significantly, or
    2. narrowing the definition of a GBE to profit-oriented entities, so excluding entities that have a financial objective of full cost recovery.

The IPSASB has expressed a unanimous preliminary view that the first approach is the best way forward, with the majority of board members supporting the development of high-level characteristics of a public sector entity based on existing IPSASB materials. This view is supported on the basis it is high-level and principles based, and acknowledges the role of regulators and other relevant authorities in determining which entities should apply IPSASs. The consultation paper also notes that this approach is consistent with the approach the IASB takes in respect of profit-oriented entities in the Preface to International Financial Reporting Standards and individual IFRSs.

The consultation paper is open for comment until 31 December 2014. Click for IPSASB press release (link to IFAC website).

EFRAG calls for some new members of its IAWG

27 Aug 2014

The European Financial Reporting Advisory Group (EFRAG) is looking for some new members of its Insurance Accounting Working Group (EFRAG IAWG) following the retirement of some of its existing members.

Some of the members in the Working Group have indicated that they are no longer available to contribute to the Working Group. Therefore, EFRAG has decided to launch a call for applicants. More in particular EFRAG is looking for candidates with an auditors and industry background to fulfil three vacancies.

Members are expected to have a strong technical expertise on insurance issues - accounting for insurance contracts - and financial instruments as well as more general IFRS accounting issues and practice. Members are appointed intuitu personae, no substitute is allowed.

Further information can be found in the press release posted on EFRAG's website.

EFRAG issues feedback statement on its draft comment letter on the disclosure initiative

27 Aug 2014

The European Financial Reporting Advisory Group (EFRAG) has issued a feedback statement to summarise the comments received by the EFRAG on its draft comment letter on the disclosure initiative (proposed amendments to IAS 1).

On 25 March 2014, the IASB published an exposure draft containing a number of amendments to IAS 1. In response to the exposure draft, the EFRAG issued a draft comment letter that noted its support for the project and provided several suggestions to improve the proposed amendments. The EFRAG’s feedback statement provides the main comments received from constituents on its draft comment letter. The general consensus from constituents was "almost all respondents welcomed the IASB’s proposals in the ED and the overall message of the EFRAG draft comment letter. However, the majority of respondents that answered our questions did not agree with EFRAG’s suggestion to prohibit disclosure of immaterial information. Constituents also raised a number of minor concerns on the other topics covered by the amendments."

For more details on the feedback statement, please see (links to EFRAG website):

US SEC appoints new Chief Accountant

26 Aug 2014

The US Securities and Exchange Commission (SEC) has appointed James Schnurr as the new chief accountant in the SEC’s Office of the Chief Accountant to succeed Paul Beswick. In his new role, which begins in October, Mr Schnurr will oversee accounting interpretations, professional practice issues and international accounting matters.

Mr Schnurr, a retired senior partner at Deloitte, has almost 40 years of experience in the accounting and auditing profession. He spent the latter part of his career at the firm’s national office where he was consulted extensively on various SEC technical accounting issues.

For additional information, see the press release on the SEC’s website.

IASB issues three investor webcasts

22 Aug 2014

As part of its Investor Education Initiative, the IASB has published three investor-focused education webcasts to keep the investor community informed on recent accounting matters. The webcasts are done in collaboration with the CFA Institute.

The following webcasts are available:

For more information, see the Investor Education webcast series and programme on the IASB website.

IFRS Foundation publishes additional proposal for IFRS Taxonomy 2014

22 Aug 2014

The IFRS Foundation has published 'Proposed Interim Release 2 to the IFRS Taxonomy 2014' for public comment.

The proposed interim release contains additional taxonomy concepts that reflect new IFRSs and improvements to IFRSs published by the IASB and technical updates and corrections. In particular, this proposed interim release includes taxonomy elements for IFRS 15 Revenue from Contracts with Customers, which was issued on 28 May 2014.

The IFRS Foundation finalised its first interim release to the IFRS Taxonomy 2014 on 15 May 2014. It includes taxonomy elements for IFRS 14 Regulatory Deferral Accounts.

Comments on the proposed interim release are requested by 20 October 2014.

For more information, see the press release on the IASB’s website.

IASB announces membership of transition resource group for impairment of financial instruments

22 Aug 2014

The International Accounting Standards Board (IASB) has announced the membership of the transition resource group that will focus on the new requirements for impairment of financial instruments.

The Impairment Transition Resource Group (ITG) group will support stakeholders by providing a discussion forum on implementation issues that may arise as a result of the new impairment requirements under IFRS 9 Financial Instruments that were issued in July this year.

The current membership of the ITG includes:

  • Wayne Basford, BDO, Partner, IFRS leader Asia Pacific
  • Graham Dyer, Grant Thornton, Senior Manager, National Professional Standards Group
  • Paul Fallon, Standard Bank Group, Head of Group Risk Model Development and Model Management
  • William Hayward, Barclays, Director, Head of Regulatory Risk
  • Helen Killoch, Bank of Montreal, Vice-President and Chief Accountant
  • John McDonnell, PwC, Partner in Banking and Capital Markets Group and Global Accounting Consulting Services
  • Tetsuo Nanri, Bank of Tokyo-Mitsubishi, Manager, Credit Policy & Planning Division
  • Hervé Phaure, Deloitte, Partner, FSI Risk Advisory
  • George Prieksaitis, Ernst & Young, Partner, Financial Services Organisation; Leader of the EY Financial Accounting Advisory Services business in Canada
  • Jörg Michael Scharpe, Deutsche Bank, Group Reporting Director for External Capital and Risk Reporting
  • Chris Spall, KPMG, Partner, Internal Standards Group, Global IFRS Financial Instruments Leader
  • Yu Xiaofel, Bank of China, Accounting Manager

The first meeting date for the ITG is planned for the last quarter in 2014.

For more information, see the press release on the IASB website.

Staff paper on issues in the application of IFRS 9 to Islamic finance

21 Aug 2014

The IASB's Consultative Group for Shariah-Compliant Instruments and Transactions will meet in Kuala Lumpur on 5 September 2014 to discuss issues in the application of IFRS 9 'Financial Instruments' to Islamic finance. To this end a staff paper has been prepared addressing issues in the classification of financial instruments under IFRS 9.

The working group was formed as a result of the IASB's 2011 agenda consultation and held an initial meeting in Kuala Lumpur in July 2013. During the meeting, the group identified four areas that it wants to address:

  • The application of IFRS 9's classification and measurement principles;
  • the application of the IASB's proposed lease standard to Ijarah;
  • whether restricted and unrestricted investment accounts are to be presented on- or off-balance sheet; and
  • profit equalisation reserves (PER) because of significant differences in practice.

The upcoming discussion in Kuala Lumpur will address the first of these points and will be based on a staff paper made recently available on the IASB's website. The paper identifies three main issues that need to be considered:

  1. Which IFRS applies to the accounting of Islamic financial instruments? Are these contracts with customers that fall within the scope of IFRS 15 Revenue from Contracts with Customers?
  2. Do some of the instruments common in Islamic finance meet the characteristics-of-the-instrument test in IFRS 9 Financial Instruments?
  3. How should the revenue from Islamic finance instruments be described and measured?

Please click for access to the full staff paper offering background and considerations on the three issues on the IASB's website.

Summary of the June 2014 CMAC and GPF meeting

20 Aug 2014

The IASB has made available a summary and recordings of the discussions held during the joint meeting of the Capital Markets Advisory Committee (CMAC) and the Global Preparers Forum (GPF) on 30 June 2014.

The topics discussed at the meeting included:

  • Conceptual Framework — The CMAC and GPF discussed (1) the distinction between liabilities and equity, and (2) the distinction between profit or loss and other comprehensive income.
  • Disclosure Initiative — CMAC and GPF members provided input on debt reconciliation and principles of disclosure projects.
  • Leases— GPF and CMAC members discussed three areas of lessee disclosures:
    1. maturity analysis of the contractual lease payments included in lease liabilities;
    2. reconciliations of the opening and closing balances of right-of-use assets and lease liabilities and alternative quantitative disclosures; and
    3. qualitative disclosures.
  • Post-implementation Review of IFRS 3 — The IASB staff presented an overview of the status of project and solicited input from CMAC and GPF members on some of the more significant issues included in the Request for Information.

The next CMAC meeting is scheduled for 16 October 2014.

For more information, see the meeting page on the IASB's website.

Correction list for hyphenation

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