Report from recent IFASS meeting released

  • IFASS (International Forum of Accounting Standard Setters) (dark green) Image

04 Dec 2014

A report has been issued summarising the discussions at the meeting of the International Forum of Accounting Standard Setters (IFASS) held in London on 30 September and 1 October 2014.

Highlights from the meeting included:

IASB research programme

Participants discussed the role of research in the standard‐setting process, the role of national standard setters and the priority and longer‐term projects on the IASB's research programme. Projects discussed were:

  • Dynamic risk management,
  • Business combinations under common control,
  • Discount rates,
  • Equity method of accounting,
  • Financial instruments with characteristics of equity,
  • Foreign currency translation,
  • Income taxes,
  • Liabilities – amendments to IAS 37,
  • Performance reporting,
  • Rate‐regulated activities,
  • Post‐employment benefits, and
  • Extractive activities / Intangible assets / R&D activities.

The Chairman also asked participants to advise the IASB of potential research topics not on the list yet.

IPSASB matters

Participants discussed the IPSASB's Conceptual Framework project as the IPSASB's main strategic project at present and other current projects. It was stated stated that guidance on social benefits is a big gap in IPSASB's literature. In connection with the question of IPSASB governance it was mentioned that it is likely that IPSASB will remain under the aegis of IFAC with a separate oversight board.

Administrative matters

The next IFASS meeting's location was moved from Jordan to Dubai; the timing (23-24 March 2015) was not changed.

Report back on IFASS member projects

Participants discussed four projects run by IFASS members: 'Goodwill impairment and amortisation' (OCI, EFRAG, ASBJ), 'The equity method' (EFRAG), 'Cash flow statement issues' (FRC), and 'Separate Financial Statements' (EFRAG, ICAC, OIC, RJ).

Economic consequences of IFRS adoption in Korea

The Chairman of the Korea Accounting Standards Board explained that the adoption of IFRSs in Korea was proceeding well. He provided details of the IFRS adoption process in Korea, compared Korean GAAP with IFRSs and gave details of a relevant literature review.

Changes to the Interpretations Committee processes

The IASB representative explained that the IASB is seeking better evidence of diversity in practice and asked participants to share examples of such diversity with the IASB staff. He also mentioned that the IASB is seeking to get a local perspective on how jurisdictions gather feedback and asked asked to be advised if there is an overlap as to whom the IASB asks for feedback as the IASB relies on feedback from many sources. Participants discussed NIFRICs (negative IFRIC agenda decisions) at length, which are seen by some as being equivalent to authoritative literature. The IASB representative explained that in some instances, NIFRICs could be regarded as educational material in nature. Participants felt that the discussion was in danger of undermining the concept of principle‐based standards as it was important to be sure what is authoritative and what is educational. The IFASS Chairman commented that the Interpretations Committee could indicate in the NIFRICs that the Committee's comments should be viewed as being educational in nature but are not authoritative.

Topical Issues

Participants then discussed several topical issues:

  • Retirement benefit plans,
  • Presentation of reversals of acquisition step‐ups,
  • Income recognition during the construction phase in the case of service concession
    arrangements, and
  • EU Expert Group on the evaluation of the IAS Regulation.

New IFASS member projects

Participants discussed three new projects taken up by IFASS members: 'The Financial Reporting Lab' (FRC) including information on the Lab's purpose, structure and current projects; 'Not‐for‐profit reporting in the private and public sectors' (AcSB), which was supplemented by participants with information about the reporting regimes in various jurisdictions; and 'Classification of claims' (EFRAG), which was greeted by participants as "very helpful in dealing with an age‐old problem".

Please click for the full report (link to the website of the Malaysian Accounting Standards Board).

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