Report of the Effects Analysis Consultative Group published

28 Nov 2014

The Effects Analysis Consultative Group - an independent group of experts that was established by the IFRS Foundation Trustees as a result of its strategy review in 2012 - presented its final report to the Trustees who welcomed the conclusions of the report on topics such as fieldwork and the reporting of likely effects.

The Effects Analysis Consultative Group (EACG) was established in 2013 to provide independent advice to the IASB on how it should consider the effects of changes it develops to its financial reporting requirements (IFRS). Membership of the EACG includes representatives from a geographically and professionally diverse group of stakeholders.

The report that has now been presented to the Trustees and that is also publicly available is intended to support the IASB in further embedding effects analyses within its due process, with the objective of strengthening the standard-setting process.

The EACG’s report identified a series of recommendations among which are the following:

The IASB should assess and explain how general purpose financial reports are likely to change because of new requirements, and why those changes will improve the quality of general purpose financial reports. Furthermore, the IASB should explain why it considers those changes to be justifiable, demonstrating how it assessed the likely effects on the direct costs to preparers of meeting the new requirements and the related costs to users.

The IASB should work co-operatively with local standard-setters so that it can plan its fieldwork and outreach to see whether there are opportunities to organise fieldwork in ways that are mutually beneficial for the IASB and those local jurisdictions.

The IASB should plan its fieldwork so that it is proportionate to the changes in financial reporting being proposed. A more pervasive or significant potential change would normally warrant a more comprehensive assessment programme. The type, and depth, of fieldwork undertaken should also reflect the stage of development of the project.

The IASB should aim to undertake consultation that is geographically broad-based so that its Standards are written with principles that can be applied globally. Other accounting standard-setters can help by providing the IASB with analysis and information about factors and possible effects that might be unique to their jurisdiction.

The IASB should make available information about the nature of fieldwork and outreach that it has undertaken. This information should be made available throughout the development of the project.

The format of the analysis of the likely effects of a proposed change in financial reporting should reflect the stage of the proposals. When a new Standard is issued, the IASB should generally prepare a separate Effects Analysis Report.


The full EACG report as well as the press release are available on the IASB's website.

IFRS Advisory Council membership update

28 Nov 2014

The Trustees of the IFRS Foundation have announced the appointments of 15 new members to the IFRS Advisory Council.

The Advisory Council is the formal advisory body to the Trustees and the IASB. It advises the IFRS Foundation on its strategic direction, technical work plan and priorities.

The new Advisory Council members are:

    1. Areewan Aimdilokwong - International Organization of Securities Commissions
    2. Vania Borgerth - BNDES Brazilian Development Bank
    3. Prasan Chuaphanich - Federation of Accounting Professions, Thailand
    4. Pascale Déprez - Association for the participation of French companies in international accounting harmonisation (ACTEO)
    5. Garth Coppin - Financial Reporting Standards Council of South Africa
    6. Roxana Damianov - European Securities and Markets Authority
    7. Holger Daske - The International Association for Accounting Education and Research
    8. Paul Fitzsimon - PricewaterhouseCoopers
    9. Hidetake Ishihara - Nippon Keidanren, Japan
    10. Ann Jorissen - European Accounting Association
    11. Jürgen Kirchhof - European Central Bank
    12. Robert Koethner - European Round Table of Industrialists and European Issuers
    13. Ton Meershoek - International Organization of Securities Commissions
    14. Pam O’Connell - World Bank
    15. Uğur Yaylaönü - Capital Markets Board of Turkey

The new members will replace retiring members Valeska Barros, Roger Best, Michael Bradbury, Thomas Blöink, Laurent Degabriel, Begoña Giner, John Hitchins, Christoph Hütten, Charles Macek, Bruce Mackenzie, Fumio Muraoka, Patrick Parent, Panagiotis Strouzas and Zinga Venner as of 1 January 2015.

The following members of the Advisory Council have been reappointed: Rudolf A Bless, Wang Haoyu, Shizhong Huang, Anne Molyneux, Vincent Papa, Rajagopal Sankaraiah, Gregory Smith and Min Yang.

The press release announcing the new appointments can be found on the IASB's website.

November 2014 IASB meeting notes — Part 3

27 Nov 2014

The International Accounting Standards Board (IASB) met at its offices in London on 19-20 November 2014. We have now posted the Deloitte observer notes from Wednesday's session on the Conceptual Framework. Additional notes will be posted in due course.

Click through for direct access to the notes:

Wednesday, 19 November 2014

  • Conceptual Framework
    • Sweep issues
    • Update on the conceptual framework projects of the FASB and IPSASB
    • Measurement – transaction costs.

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

IESBA proposes update to ethics code for professional accountants in business

26 Nov 2014

The International Ethics Standards Board for Accountants (IESBA) has issued an exposure draft of proposed changes to the 'Code of Ethics for Professional Accountants' (the Code). The proposals focus on the requirements of professional accountants in business involved in the presentation of financial and non-financial information, and also provide guidance on dealing with pressure from superiors and other to engage in unethical or illegal acts.

The exposure draft, Proposed Changes to Part C of the Code Addressing Presentation of Information and Pressure to Breach the Fundamental Principles, is focused on accountants who work on their own or in organisations other than public accounting practices, such as in commerce, industry, education, and the public and not-for-profit sectors. The exposure draft addresses key priorities for such accountants contained in Part C of the Code, which were identified through a consultation process involving working groups, the International Federation of Accountants (IFAC) Professional Accountants in Business Committee (PAIB), IFAC member bodies and the IESBA Consultative Advisory Group (CAG).

The key proposals include:

  • Widening the scope of the existing requirements around the preparation and reporting of information to reduce the emphasis on external financial information, and instead focus on both financial and non-financial information for both internal and external purposes. This would mean that the requirements of the Code for information to be prepared "fairly and honestly" would apply consistently to all information produced by a PAIB. Examples provided in the exposure draft of information captured include operating and performance reports, budged and forecasts, information provided to internal and external auditors, risk analyses, general and special purpose financial statements, tax returns and regulatory reports
  • Providing additional guidance around the "fair and honest" principle when preparing financial and non-financial information, including:
    • Preparing or presenting information in a manner that is intended neither to mislead nor influence contractual or regulatory outcomes inappropriately
    • Not omitting information with the intention of rendering the information misleading
    • Presenting the information in accordance with a relevant reporting framework where applicable (this is currently a separate requirement of the Code, but is proposed to be repurposed as guidance on applying the "fair and honest" principle)
  • In relation to the "fair and honest" preparation and presentation of financial information, to introduce additional guidance that a PAIB should not exercise judgements and discretion available under the applicable financial reporting framework in a manner that is intended to mislead, including when determining estimates, selecting a particular accounting method among two or more alternatives, determining the structuring of transactions and determining disclosures
  • Proposing a new section of the Code to provide more robust and practical guidance on how a PAIB should respond when facing pressure from a superior or others that may result in a breach of the fundamental principles of the Code. The new section would introduce a explicit requirements for a PAIB not to allow pressure to result in a breach of the fundamental principles, and to prohibit a PAIB from placing pressure on others that would result in such a breach.

The exposure draft is open for comment until 15 April 2015. Click for IESBA press release (link to IFAC website).

November 2014 IASB meeting notes — Part 2

25 Nov 2014

The International Accounting Standards Board (IASB) met at its offices in London on 19-20 November 2014. We have now posted the Deloitte observer notes from Wednesday's session on insurance contracts. Additional notes will be posted in due course.

Click through for direct access to the notes:

Wednes­day, 19 November 2014

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

We comment on a number of tentative agenda decisions of the IFRS Interpretations Committee

25 Nov 2014

We have published our comment letters on IFRS Interpretations Committee agenda decisions on IAS 28, IAS 39, IFRS 12, IFRS 13, and IFRIC 21, as published in the September IFRIC Update.

More in­for­ma­tion about the issues is set out below:

IssueMore information

IAS 28 Investments in Associates and Joint Ventures — Fund manager’s significant influence over a fund

IAS 39 Financial Instruments: Recognition and Measurement — Accounting for embedded foreign currency derivatives in host contracts

IFRS 12 Disclosure of Interests in Other Entities — Disclosures for a subsidiary with a material non-controlling interest and for a material joint venture or associate

IFRS 13 Fair Value Measurement — The fair value hierarchy when third-party consensus prices are used

IFRIC 21 Levies — Levies raised on production property, plant and equipment

You can access all our comment letters to the IASB, IFRS Foun­da­tion, and IFRS In­ter­pre­ta­tions Com­mit­tee here.

IASB proposes amendments to IFRS 2 to clarify the classification and measurement of share-based payment transactions

25 Nov 2014

The International Accounting Standards Board (IASB) has published an Exposure Draft (ED) of proposed amendments to IFRS 2 'Share-based Payment' that would clarify the classification and measurement of share-based payment transactions. The ED addresses several requests the IASB and the IFRS Interpretations Committee received and the IASB decided to deal with in one combined narrow-scope project. Comments are requested by 25 March 2015.


The IASB and the IFRS Interpretations Committee received a number of requests related to IFRS 2 Share-based Payment. Respondents asked for clarification on:

  • the accounting for cash-settled share-based payment transactions that include a performance condition;
  • the classification of share-based payment transactions with net settlement features; and
  • the accounting for modifications of share-based payment transactions from cash-settled to equity-settled.

After debating the issues in earlier meetings, the IASB decided in April 2014 to address them together in one narrow-scope project.

Suggested changes

ED/2014/5 Classification and measurement of share-based payment transactions proposes the following clarifications and amendments regarding the issues:

Accounting for cash-settled share-based payment transactions that include a performance condition

IFRS 2 currently contains no guidance on how vesting conditions affect the fair value of liabilities for cash-settled share-based payments. The IASB proposes to clarify that the accounting in the case of cash-settled share-based payments should follow the same approach as used for equity-settled share-based payments.

Classification of share-based payment transactions with net settlement features

The IASB proposes to include an exception into IFRS 2 so that a share-based payment where the entity settles the share-based payment arrangement net would be classified as equity-settled in its entirety provided the share-based payment would have been classified as equity-settled had it not included the net settlement feature.

Accounting for modifications of share-based payment transactions from cash-settled to equity-settled

IFRS 2 currently does not specifically address situations where a cash-settled share-based payment changes to an equity-settled share-based payment because of modifications of the terms and conditions. The IASB proposes the following amendments:

  • On such modifications, the original liability recognised in respect of the cash-settled share-based payment is derecognised and the equity-settled share-based payment is recognised at the modification date fair value to the extent services have been rendered up to the modification date.
  • Any difference between the carrying amount of the liability as at the modification date and the amount recognised in equity at the same date would be recognised in profit and loss immediately.

Effective date and transition requirements

The ED does not contain a proposed effective date but states that earlier application would be permitted. The amendments would be applied prospectively. However, retrospective application would also be permitted if an entity has all necessary information and if the information is available without the use of hindsight.

Additional information

ED/2014/5 is open for comment until 25 March 2015. Please click for:

IASB issues work plan update for November 2014

24 Nov 2014

Following its November meeting, the International Accounting Standards Board (IASB) has updated its work plan. The revised plan adds a target date for amendments to IFRS for SMEs (Q1 2015) and a timeframe for the comment letter analysis (Q1 2015) on the discussion paper on macro hedging. Further, the IASB now expects to issue an exposure draft on the elimination of gains or losses arising from transactions between an entity and its associate or joint venture in Q1 2015 (previously Q4 2014). Lastly, it includes updates to the expected timing of board discussions for the short-term research projects on business combinations under common control (Q1 2015), discount rate (Q1 2015), emissions trading scheme (Q4 2014 through Q1 2015), equity method (Q4 2014 through Q2 2015), and financial instruments with characteristics of equity (Q4 2014), as well as, long-term research project on post-employment benefits (Q1 and Q2 2015).

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


Exposure draft

Q1 2015

Fi­nan­cial in­stru­ments — Macro hedge accounting

Dis­cus­sion paper

Comment letter analysis

Q1 2015*

In­sur­ance con­tracts



Q4 2014



Target IFRS

H2 2015

Dis­clo­sure ini­tia­tive — Prin­ci­ples of dis­clo­sure

Board dis­cus­sion

Targeted Dis­cus­sion Paper

Q2 2015

Dis­clo­sure ini­tia­tive — Amend­ments to IAS 1

Exposure draft

Target IFRS

Q4 2014

Dis­clo­sure ini­tia­tive — Rec­on­cil­i­a­tion of li­a­bil­i­ties from fi­nanc­ing ac­tiv­i­ties


Exposure draft

Q4 2014

IFRS for SMEs — Com­pre­hen­sive review


Target IFRS

Q1 2015*

Rate-reg­u­lated ac­tiv­i­ties

Dis­cus­sion paper

Public con­sul­ta­tion

Q4 2014 and Q1 2015

* In­di­cates a change since the previous work plan update on 28 October 2014.

Click for the IASB work plan dated 24 November 2014 (link to IASB website). We have updated our project pages to reflect the updated work plan and other known de­vel­op­ments.

November 2014 IFRS Interpretations Committee meeting notes — Part 3 (concluded)

24 Nov 2014

The IFRS Interpretations Committee met in London on 11 November 2014. We've posted the Deloitte observer notes for the sessions on IAS 12, IAS 19, IFRS 5, and IFRS 11.

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


November 2014 IASB meeting notes — Part 1

21 Nov 2014

The International Accounting Standards Board (IASB) met at its offices in London on 19-20 November 2014. We have now posted the Deloitte observer notes from Wednesday's session on IFRS for SMEs as well as Thursday's session on leases. Additional notes will be posted in due course.

Click through for direct access to the notes:

Wednesday, 19 November 2014

Thursday, 20 November 2014

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

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