The original effective date of IFRS 9 Financial Instruments was 1 January 2013 and later amended to be 1 January 2015. In November 2013, the IASB removed the mandatory effective date completely and decided to revisit the effective date when all phases of the project are complete and a final version of IFRS 9 is issued.

Today's decision is intended to align the effective dates of the requirements for financial instruments and the requirements for insurance contracts. Should the completion of the insurance contracts project be delayed, a solution for insurance contracts will be sought separately.

Deloitte observer notes from the meeting are available here.

The FASB tentatively decided to focus its future efforts on making targeted improvements to the existing U.S. GAAP insurance accounting model instead. Factors the Board considered in this decision included constituent feedback, implementation costs, and the likelihood that the FASB and IASB would be unable to agree on a converged accounting model. For short-duration contracts, the FASB tentatively decided that its targeted improvements should focus only on disclosure requirements; for long-duration contracts, the targeted improvements will take into account the requirements for recognition, measurement, and disclosure.

This decision would result in a U.S. insurance accounting model that would diverge significantly from the insurance accounting model proposed by the IASB. Several FASB members indicated that its targeted improvement efforts could possibly result in a long-duration accounting model similar to the building block approach being pursued by the IASB; however, such an outcome is not the primary objective of such improvements.

A recording of the session and minutes from the meeting reached during the meeting are available on the FASB website.

The draft framework outlines the preparation and disclosure of environmental information included in, or in conjunction with, 'mainstream reports'.  These are annual reporting packages prepared under jurisdictional laws and include financial statements and explanatory notes prepared in accordance with a financial reporting framework such as International Financial Reporting Standards (IFRSs). Other financial reporting, such as management commentary (often termed 'management discussion and analysis') are also included where relevant, and the framework is also considered suitable for small and medium sized entities.

Environmental information covered by the draft framework includes information about the following 'environmental elements': greenhouse gases, forest risk commodities (biofuels, cattle products, palm oil, soy and timber), water and fossil fuel energy resources. In summary terms, the framework is to require disclosure of environmental information that enable users of mainstream reports to assess:

• How the organisation manages, uses and relies on the environmental elements
• Which environmental elements are owned, used and consumed as inputs, together with their providence and measures of consumption
• Outputs of or to environmental elements, including greenhouse gas emissions and discharge of water
• The availability, quality, price of, and access to, environmental elements
• Business risks and opportunities associated with each of the items above
• The response to environmental challenges, e.g. degradation or depletion of environmental elements, climate change, regulatory restrictions and societal expectations.

The framework is structured into a number of sections, focusing on the identification and determination of information to report, an organisation's environmental information reporting practices, and guidance on how to report to ensure the quality of environmental information to investors. Each of these sections contain a number of requirements which have to be met in order to claim compliance with the framework. A separate section contains guidance on associated matters such as disclosure tools, standards and methodologies representing current practice.

The proposed framework notes that it has been developed to enhance and complement rather than to duplicate existing corporate reporting approaches that support disclosure of environmental information. This includes:

• financial reporting pronouncements issued by the International Accounting Standards Board (including IFRS Practice Statement Management Commentary) and other bodies
• legislation and guidance issued by regulators, such as the Australian Water Accounting Standard, and United Kingdom environmental reporting requirements on greenhouse gas emissions
• developing and final voluntary frameworks such as the International Integrated Reporting Council (IIRC) International <IR> Framework, Global Reporting Initiative (GRI) G4 guidelines, OECD guidelines for multinational enterprises, United Nations Global Compact principles, and others
• various other sources of specific guidance, such as the The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard developed by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD).

Consistent with the IIRC <IR> Framework, the proposed CDSB framework focuses on the needs of investors as the primary users of information. The consultation document notes that "organizations rely on continuing inputs of 'capital' from different sources including the financial system and the environment, which provides natural capital" and that the framework "enables investors to exercise their duty of stewardship in relation to both types of capital".

The proposed framework would apply on a voluntary basis. The consultation draft is open for comment until 19 May 2014. Click for more information (link to CDSB website).

Government Finance Statistics (GFS) reporting guidelines include the International Monetary Fund (IMF) Government Finance Statistics Manual (GFSM) and the European System of Accounts (ESA). Such frameworks aim to be consistent with the overarching standards in the United Nations System of National Accounts (SNA), which is an internationally agreed standard set of recommendations on how to compile measures of economic activity.

The policy paper, Process for Considering GFS Reporting Guidelines during Development of IPSASs, notes that the IPSASB, in pursuing its objective of developing high-quality accounting standards for use by public sector entities in preparing general purpose financial reports, "supports the convergence of... accounting and statistical bases of financial reporting where appropriate". The paper further notes that both IPSAS and GFS reporting guidelines have significant overlap in being concerned with financial information, the assets, liabilities, revenues and expenses of governments, and information about cash flows. However, the paper notes that GFS reports have different uses to general purpose financial reports, as GFS reports have a focus on government policy and evaluating the impact of government on the economy, notwithstanding that many countries adopt GFS reporting for their fiscal reporting.

The policy paper expresses the impact of these differences as follows:

GFS reporting guidelines and IPSASs have different objectives. Although the two sets of financial information necessary to meet these different objectives have many similarities, the different objectives do result in some fundamental differences on how, what and where information is reported. In considering scope to reduce differences the IPSASB will remain true to the objectives of financial reporting. Where differences appear to warrant referral to the statistical community for its consideration, the IPSASB recognizes that the statistical community’s consideration of issues will be in light of the objectives of the GFS reporting framework.

Accordingly, the paper envisages that amendments to both IPSASs and the GFS reporting guidelines may need to be considered as part of the harmonisation process. In the event the GFS reporting guidelines are identified as requiring revision, the paper notes that consistency with the SNA may be problematic, and that whilst "a major endeavor", that "revisions to the SNA may be possible in the longer term".

Some of the steps outlined in the paper that the IPSASB intends to follow in seeking to eliminate differences between IPSASs and GFS reporting guidelines include:

• A table of the main differences between IPSASs and GFS reporting guidelines will be maintained, including assessments of whether differences should be resolved through changes in IPSASs or changes in the GFS guidelines
• IPSASB observers at the International Monetary Fund (IMF) and Eurostat will provide input
• Differences that can be resolved through relatively minor revisions to IPSASs may be included in the IPSASB biennial improvements process, but only where they are minor, consistent with the IPSASB Framework and do not conflict with existing IPSASs (including those converged with IFRSs)
• The process for each IPSASB project will consider addressing differences relevant to that project, and projects will seek to avoid introducing new differences, and explicitly consider such differences are part of deliberations
• Issues may be referred to the statistical community for resolution, after input is sought from the IPSASB IMF and Eurostat observers

The paper notes that "fundamental differences" arising from underlying conceptual differences will not be able to be eliminated, but instead "are expected to continue and will need to be managed". Additionally, in some cases, non-fundamental differences may be able to be addressed through accounting policy choices, guidance on application of existing requirements, and the design of information systems to allow preparation of both IPSAS and GFS information.

In relation to the impacts on the ongoing convergence efforts between IPSASs and IFRSs, the paper notes the following:

The IPSASB’s “Process for Reviewing and Modifying IASB Documents” sets out the process that the IPSASB follows when considering International Accounting Standards Board (IASB) documents for convergence, including determining whether public sector issues warrant departures from the IASB document. Step 1 of that process includes consistency with the statistical bases as one factor for consideration when making decisions. This document is intended to complement and support that process, rather than conflict with it in any way.

Click for access to the policy paper (link to IFAC website).

The report which is based on a survey of 200 CFOs and “other senior finance professionals” (“CFOs”) indicates that CFOs see benefits to an integrated reporting model including enabling them to “align the company’s risks with its opportunities, adopt a more holistic view of the true drivers of corporate performance, and build better relationships with external stakeholders”.  Past research by the ACCA in their report, Understanding investors: direction for corporate reporting, also indicated “strong support for integrated reporting among investors” with 93 per-cent of those investors surveyed supporting the concept of integrated reporting.  

However, despite the benefits and investor appetite, the majority of companies (48 per-cent) surveyed are choosing to adopt a ‘wait and see’ approach to integrated reporting and 10 per-cent of those surveyed “have no intention” of moving towards an integrated reporting model unless it becomes compulsory. Only 38 per-cent of those surveyed are taking active steps to move towards an integrated reporting model in the next three years and only 5 per-cent have already implemented one and published an integrated report.  

The report also shows “cautious support” from CFOs for the adoption of real-time reporting even though there is “genuine demand” from investors as highlighted in an earlier ACCA report, Understanding investors: the road to real-time reporting, published in September 2013. This showed that “70 per-cent of investors said that companies reporting in real time would have an advantage in attracting investment” and “73 per-cent would consider companies that report in real-time to have more robust corporate governance”.  

Many CFOs (two-thirds) would “welcome” a move to real-time reporting but fear that this “could compromise competition-sensitive information and lead to misstatements”. A number of CFOs also indicated that there were obstacles to implementing an effective real-time reporting system such as “the difficulty in instituting effective controls to ensure accuracy” (45 per-cent) and 60 per-cent of CFOs “see auditors as the biggest barrier to real-time reporting”. 

To support a real-time reporting approach the report highlights that CFOs have the challenge to speed up their reporting processes and that many companies have made the effort to take the necessary steps to achieve this. The findings show that CFOs believe that there are benefits of a faster close process with 63 per-cent indicating that “a key benefit of a faster close is that external stakeholders see it as a sign of good management”.     

With regards to the relationships with external auditors, CFOs indicated that although relationships are good, there were certain areas in the audit profession where they would like to see improvements. Key highlights are that 60 per-cent of respondents would like lower audit fees, 47 per-cent would like more competition between audit firms and 45 per-cent would like to see more frequent communication with their auditors.

The full report can be obtained from the ACCA website.

The other three reports in the series are:

• Understanding investors: direction for corporate reporting and Understanding investors: the changing landscape were published in June 2013
• Understanding investors: the road to real-time reporting published in September 2013 

Not part of the series but also investor focused is the ACCA survey, What do investors expect from non-financial reporting?, published in July 2013.

The 'Red Book' contains all official pronouncements issued at 1 January 2014, including all pronouncements with an effective date after 1 January 2014, but not the pronouncements that will be replaced or superseded. Accordingly, the 2014 edition contains pronouncements as a result of amendments from IFRS 9 Financial Instruments (Hedge Accounting and amendments to IFRS 9, IFRS 7 and IAS 39), amendments to IAS 19, IAS 36, and IAS 39, two sets of Annual Improvements to IFRSs (2011-2013 and 2010-2012), one new Interpretation (IFRIC 21 Levies), and the IFRS Foundation Constitution and Due Process Handbook.

More information is available on the IASB's 'register my interest' webpage (link to IASB website).

The presentation will be delivered by Kristy Robinson, IASB technical principal, and Brian Singleton-Green, ICAEW financial reporting faculty. The presentation, which will include a question and answer session, will discuss the following:

• The overwhelming amount of information in financial reporting.
• Issues enforcing disclosures.
• Changes that need to occur.
• Future IASB’s plans for disclosure.

For the convenience of participants in different time zones, two slots have been scheduled:

• 09.00 (London time),
• 16.00 (London time).

Registration for the different slots is available through the ICAEW website.

The conference will feature presentations by IASB Chairman Hans Hoogervorst and IASB members (Stephen Cooper, Sue Lloyd, Patricia McConnell, and Chungwoo Suh).

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
• Panel discussions on IFRS disclosures and IFRS 9

The conference will also have break-out sessions featuring:

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

Among the speakers invited to the forum are IASB Chairman Hans Hoogervorst, AOSSG Chairman Clement Chan, and Tricia O’Malley, Chairperson of the IFASS.

Topics discussed will include:

• Fair valuation under IFRS - Concerns and safeguards
• Goodwill - Impairment only or with amortisation
• New approach to lease accounting
• Do IFRS ignore prudence?
• Challenges of evolving nations in convergence/adoption of IFRS
• Post-implementation review of new IFRS

Please click for more information about the forum on the ICAI website. The Forum will be telecast: http://icaitv.com/?p=5617

The first outreach event will discuss the post-implementation review of IFRS 3 Business Combinations. It will provide users of financial statements and other non-users, the chance to provide their input on the usefulness of the information resulting from the implementation of IFRS 3. Registration for this event is requested by 20 March 2014. A programme for the event is available on the EFRAG website.

Additional events on macro hedging and a high level roundtable on topical developments in financial reporting are expected in the near future.

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