Final endorsement of IFRS 15 is currently expected in the second quarter of 2015.

The report also reflects that vote of the Accounting Regulatory Committee (ARC) on three amendments to standards (bearer plants, acceptable methods of depreciation, and acquisitions of interests in joint operations) has been postponed to the first quarter of 2015.

The endorsement status report, dated 15 October 2014, is available here.

Mr Prada made the case for global reporting standards by stressing that these liberate companies from the burden of complying with different, and often incompatible, national accounting requirements, give investors access to revenue and profit numbers all calculated on the same basis regardless of the country they are calculated in, and provide market supervisors and government leaders around the world with a standardised set of performance metrics on which to build globally consistent regulatory initiatives. He noted: "[I]t is in everyone's interest to reduce friction in the global system. That is what IFRS does."

However, Mr Prada also warned that these benefits can only fully be realised when IFRSs are adopted as issued by the IASB:

Of course, global standards only function properly if everyone adheres to them. As tempting as it may be for jurisdictions to pick and choose those standards that appeal and omit those that do not, doing so would undermine the very essence of what we are aiming to achieve. The reality is that if you want to reap the benefits of global standards, then everyone must commit themselves to adopt the same, single set of high quality standards.

Turning to the ISAR meeting's overall topic of monitoring of compliance and enforcement of international corporate reporting standards and codes he admitted that although IFRSs are a success story, adoption of them can only be part of the package. As a next step, it must ensure that the standards are being used correctly and consistently within a strong regulatory and legal framework. In this connection he mentioned that the IASB does not have the mandate nor the resources to enforce and monitor application of the standards that it creates. That would be up to governments, financial regulators, and auditors in individual jurisdictions.

Nevertheless, as Mr Prada pointed out, the IFRS Foundation has undertaken a number of initiatives aimed at promoting the correct use and application of IFRSs. In September 2013 for example, the IFRS Foundation and the International Organization of Securities Commissions (IOSCO) announced that the two organisations will deepen their cooperation in the development and implementation of IFRS on a globally consistent basis. And in July 2014 this was followed by similar agreement with the European Securities and Markets Authority (ESMA). Mr Prada also highlighted the efforts of the IFRS Foundation Education Initiative that produces freely available training material that is also translated into all of the world's most widely spoken languages and offers regional multi-day IFRS teaching workshops, especially in the emerging markets.

Summing up the initiatives of the IFRS Foundation, Mr Prada expressed the hope that these efforts should bring great long-term benefits to the global financial reporting community:

By improving the quality of accounting in every jurisdiction, we are not only working to the benefit of those individual countries. We are also contributing to the overall health of the global financial system.

Please click for access to the full text of Mr Prada's speech on the UNCTAD website.

Today's morning session also saw a keynote adress by Gonzalo Ramos, Secretary-General of the Public Interest Oversight Board (PIOB), and presentations by Richard Thorpe, Head of Accounting and Auditing Issues and Policy of the  Financial Stability Board (FSB), Gert Luiting, Advisor at the International Forum of Independent Audit Regulators (IFIAR), Mike Hathorn, Board Member of the International Federation of Accountants (IFAC), Teresa Fogelberg, Deputy Chief Executive of the Global Reporting Initiative (GRI), and Neil Stevenson, Brand Director of the International Integrated Reporting Council (IIRC). All speeches are available on the general homepage of the thirty-first ISAR meeting (under the tab "Presentations").

Highlights included approval of the following documents by EFRAG TEG:

• an invitation to comment relating to the endorsement for use in the European Union and European Economic Area of IFRS 15 Revenue from Contracts with Customers (not published yet);
• final endorsement advice on bearer plants;
• a final comment letter in response to ED/2014/2 Investment Entities: Applying the Consolidation Exception (Proposed amendments to IFRS 10 and IAS 28);
• a final comment letter in response to IOSCO's proposed guidance on the presentation of non-GAAP financial measures.

Additional topics discussed in the newsletter are:

• IFRS 3 - Post-implementation review
• Discount rates
• Disclosure initiative
• Financial instruments with characteristics of equity
• Leases
• Conceptual framework
• IFRS 9
• IASB’s annual improvements to IFRS (2012-2014 cycle)
• Equity Method in Separate Financial Statements (Amendments to IAS 27)
• Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (Amendments to IFRS 10 and IAS 28)
• Insurance contracts
• ED/2014/4 Measuring Quoted Investments in Subsidiaries, Joint Ventures and Associates at Fair Value (Proposed amendments to IFRS 10, IFRS 12, IAS 27, IAS 28 and IAS 36 and Illustrative Examples for IFRS 13)
• IASB Discussion Paper on Macro Hedging

Please click for the new issue of the EFRAG Update (link to EFRAG website).

The full agenda for the meeting, dated 13 October 2014, can be found here.  We will post any updates to the agenda, and our Deloitte observer notes from the meeting, on this page as they are available.

PIEs as presently defined in EU legislation are:

• entities whose transferable securities are admitted to trading on a regulated market,
• credit institutions,
• insurance undertakings, and
• entities designated by Member States as public-interest entities.

Therefore, Member States have the option to designate undertakings that are of significant public relevance because of the nature of their business, their size or the number of their employees as PIEs and thus expand the number of companies falling under the Accounting Directive or the Audit Directive.

FEE has surveyed PIE definitions in all EU Member States, Iceland, and Norway. The survey showed that

• there is a wide diversity of definitions of PIEs applicable across European countries with some countries having implemented the minimum requirements and others having included a number of other entities to their applicable PIE definition;
• as a consequence, the number of PIEs per European country is very variable;
• in most countries the PIE definition has not changed significantly over recent years; and
• in the context of implementing the 2013 Accounting Directive and the 2014 Audit Directive, Belgium, Germany, the Netherlands, Slovenia, Sweden and the UK are considering extending the definition while Spain and Denmark might see a reduction in scope.

The FEE survey offers several tables and charts showing PIE definitions and the number of PIEs, describes changes that can be anticipated and contains an appendix with the exact definition of a PIE for each of the countries surveyed.

Please click to access the survey on the FEE website.

In the response to the questionnaire, FEE states that the adoption of IFRSs has made companies' financial statements in the EU "significantly more transparent" due to increased disclosure, reduced divergence and increased comparability. As a consequence of increased transparency, comparability and reliability, FEE also sees significantly increased investor protection.

Given all these benefits, FEE believes that the scope of the IAS Regulation should be expanded by making IFRS compulsory for the individual accounts of listed companies on regulated markets and by allowing any company to opt for reporting under IFRS.

FEE also warns that the endorsement criteria for the EU adoption of IFRSs should remain as they are and that moving towards flexible endorsement of IFRSs would in fact be detrimental to Europe: "FEE fundamentally disagrees with 'opening a door' towards more flexibility for the EU in endorsing IFRSs as this would not bring flexibility, but would defeat the very purpose of having global standards."

FEE also warns that any implementation guidance on IFRSs should only come from the IASB and not from the EU or the national level.

Please click to download the full response (link to FEE website).

Note: On 30 October 2014, FEE supplemented its response to the questionnaire with a comment letter stressing once more and elaborating on FEE's views in relation to the endorsement and the enforcement of IFRSs in the EU. The comment letter can be accessed on the FEE website.

As the complexity of IFRS requirements and the length of associated disclosures have led to concerns about a lack of transparency in financial statements, the survey looked into the various components of management's communication with investors to provide an extended review of narrative reporting. As, moreover, 2013 was not a peaceful year in the world of IFRS with many changes to pensions, consolidation and fair value measurement, it also looked at the impact of these changes on financial statements. Lastly, discussions with Swiss listed groups have revealed an increasing interest in Swiss GAAP FER following the conversion of certain high-profile companies to these accounting standards, so the study includes an analysis of the impact of this change on financial statements.

Please click to download IFRS Survey 2014: Financial reporting by listed companies - Spotlight on Swiss trends.

The IFAC classified each recommendation within one of three categories: (1) global consistency for sound financial regulation, (2) financial management, reporting, transparency, and accountability by governments, and (3) effective taxation systems.

Global consistency for sound financial regulation

In this category, the IFAC provides recommendations that will assist in providing a consistent global framework when addressing issues. These recommendations to the G-20 include:

• Continue its momentum for regulatory reform and convergence.
• Governments and regulators adhere to principles of high-quality regulation.
• Strengthening international regulatory organizations’ resourcing and governance arrangements, including a clarification of expectations and responsibilities of standard setters.
• Adoption and implementation of IFRSs, ISAs, IPSASs and the Code of Ethics for Professional Accountants’ requirements for auditor independence.
  
  

Financial management, reporting, transparency, and accountability by governments

In this category, the IFAC provides recommendations that may enhance a government and/or public sector’s financial management practices. These recommendations to the G-20 include:

• Adoption of accrual-based accounting by governments and public sector institutions.
• Increase transparency and accountability in public sector financial management to protect the public and investors in government bonds.
• Require the FSB to encompass public sector arrangements; create a working group within the FSB that examines public sector financial reporting, transparency (including deficit spending), and accountability; direct the FSB to include IPSASs.
  
  

Effective taxation system

In this category, the IFAC recommends an enhancement to the taxation system that applies to all organizations, regardless of size. In addition, the G-20 should support the OECD in its work concerning the transparency and integrity of the taxation system and reporting.

For more information, see the letter to the G-20 on the IFAC’s website.

The CMAC, formerly called the Analyst Representative Group (ARG), consists of a number of professional financial analysts who meet at least three times a year with members of the IASB to provide the views of professional investors on financial reporting issues.

A summary of the agenda for the meeting is set out below:

Agenda papers for the meeting are available on the IASB's website.