The comment letter notes that equity accounting remains an area of controversy due to the lack of guidance in IAS 27 Separate Financial Statements on the purpose of separate financial statements or the principles underpinning the measurement of an entity’s investment in its separate financial statements. We suggest that the IASB develop an underlying basis for the preparation of separate financial statements and should evaluate whether in its separate financial statements an entity should be permitted to account for different types of investments on an inconsistent basis.

We do not agree with the suggested amendment to IAS 28 because we do not believe that the principles applied to loss of control over a subsidiary in IFRS 10 Consolidated Financial Statements should be applied in a situation where loss of control does not result in a change in the method of accounting applied because both subsidiaries and associates or joint ventures are accounted for using the equity method.

Click for the full comment letter.

This bulletin discusses:

• Unavoidable and avoidable issues of complexity in financial statements.
• Possible causes for complexity.
• Suggested guidance to the conceptual framework that may reduce the complexity.

Constituents wishing to comment on the views in the bulletins are invited to do so by 30 April 2014.

Please click to access the conceptual framework bulletin on complexity.

The full agenda for the meeting, dated 7 February 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.

The GRI has announced the availability of a new Content Index Tool which will create customised Content Index templates based on a reporter’s preferences. Also, a new G4 brochure has been developed to guide new reporters on sustainability reporting and the GRI. For more information, see the press release on the GRI website.

In addition, the GRI has developed linkage documents that align the guidance between G4 and other internationally-recognised frameworks. The linkage documents are:

• Making the Connection: Using the GRI G4 Guidelines to Communicate Progress on the UN Global Compact Principles
• GRI G4 Guidelines and ISO 26000: 2010 How to use the GRI G4 Guidelines and ISO 26000 in conjunction

Additional linkage documents are currently under development. For more information, see the press release on the GRI website.

The GRI has also developed “Sector Disclosures” documents which transition G3 and G3.1 Sector Supplements to be compatible with G4. Currently, Sector Disclosures are available for the following sectors: (1) financial services, (2) oil and gas, (3) mining and metals, and (4) electric utilities. It is expected that six additional Sector Disclosures on airport operators, construction and real estate, event organisers, food processing, media, and NGO will be completed by the end of February. For more information, see the press release on the GRI website.

Further, the GRI has initiated a G4 XBRL Reports Program to promote the benefits of the GRI Taxonomy 2013, increase the interest in its voluntary filing program, and provide examples of XBRL-tagged reports. For more information, see the press release on the GRI website.

The Terms of Reference and Operating Procedures are updated by the Trustees of the IFRS Foundation from time to time to reflect changes in circumstances, due process or requirements.

In October 2012, the Trustees approved an expansion of the membership of the SMEIG from 22 to a maximum of approximately 30 as of 1 July 2014, together with proposals to stagger the terms of membership from that date. And in April 2013, the IASB decided that the current SMEIG Q&A programme would continue as a two-tier system which will result in 'authoritative guidance' and non-mandatory 'educational material'.

The Terms of Reference and Operating Procedures have therefore been updated to reflect these decisions. Nominations for membership of the expanded SMEIG are still possible until 28 February 2014.

Please click for the following information on the IASB website:

• Press release
• Updated Terms of Reference and Operating Procedures

Members are expected to attend approximately six two-day meetings each year held in London. Terms of membership will begin on 1 July 2014 and will expire on 30 June 2017. Membership is unpaid, but the IFRS Foundation meets members' expenses of travel on IFRIC business.

Applications are accepted until 8 March 2014.

Please click for more information on the IASB's website.

Mr Hoogervorst opened his speech by commenting on the situation in Japan and the relationship between the ASBJ and the IASB. Japanese representatives serve in all levels of the IASB's governance structure and Japan is among the top financial contributors and intellectual contributors to the IASB's work. As before, Mr Hoogervorst took this as an opportunity to invite Japan to fully embrace IFRSs.

The IASB Chairman then turned to the current work programme and mentioned that an end is in sight on three major standards many constituents have been waiting for: revenue recognition, leases and financial instruments. He promised that the new revenue recognition standard would be issued "in the next few months" and that the final standard would be almost identical between IFRS and US GAAP. On the topic of leases, he admitted that the standard was controversial and many concerns were being voiced. He added however: "We take these concerns very seriously." and pointed out that the IASB had already made some decisions designed to reduce implementation costs. Lastly, Mr Hoogervorst noted that the IASB has finalised its deliberations on financial instruments classification and measurement and impairment.

The main topic of Mr Hoogervorst's speech was the IASB's work on the conceptual framework. Feedback on the IASB's discussion paper published in July 2013 had made very clear that there is still work to be done on measurement. Although constituents had voiced support for the IASB's choice for mixed measurement, they were looking for more in-depth analysis on the different measurement bases and the information they provide.

Turning to the title of his speech, Mr Hoogervorst admitted that another hotly-debated topic in the comment letters was the question of Profit or Loss versus Other Comprehensive Income (OCI). Many constituents asked the IASB to define Profit or Loss as an element and to draw a clear distinction with OCI. Yet while many constituents asked for such a definition very few had suggestions as to how that might be achieved. At this point, Mr Hoogervorst pointed to a discussion paper (link to IASB website) the ASBJ presented at the meeting of the Accounting Standards Advisory Forum (ASAF) in December 2013. Unfortunately, he said, there had been very little consensus among ASAF participants on the details of the paper, yet he described it as "a courageous effort" and "an important contribution to the beginning of the path forward".

The IASB, Mr. Hoogervorst noted, considers Profit or Loss the ‘primary source of information about the return an entity has made on its economic resources in a period’ and should be as inclusive as possible. He added: "It is absolutely vital that Profit or Loss contains all information that can be relevant to investors and that nothing of importance gets left out." Yet he also admitted that a broad definition of Profit or Loss comes at the price of being somewhat rough. As a way out, he suggested accepting that preparers and analysts "may need non-GAAP measures to fine-tune their presentation or assessment of an entity", which he mentioned was acceptable as long as these additional measures build on IFRSs and can be reconciled with the IFRS numbers.

On OCI, Mr Hoogervorst commented that it was obvious from the comment letters received that many constituents struggled with this subject. It was even suggested that the IASB should not even deal with OCI on a conceptual level as it was unlikely that a sound conceptual basis could be found. Stressing that his comments were personal and very preliminary, Mr. Hoogervorst voiced the opinion that Profit or Loss should be the primary indicator of performance in a time period, and that the IASB should be very disciplined in its use of OCI as resorting to OCI too easily would undermine the credibility of net income. Therefore OCI should only be used as an instrument of last resort. He even added the hope that "a future financial presentation project may produce better ways of presenting income of a more uncertain nature, without having to resort to the use of OCI".

Please click for the full text of Mr Hoogervorst's speech on the IASB website.

The draft plan outlines the following in respect of accounting standards:

The SEC will continue to promote the establishment of high-quality accounting standards by independent standard setters in order to meet the needs of investors. [...] Due to the increasingly global nature of the capital markets, the agency will work to promote higher quality financial reporting worldwide and will consider, among other things, whether a single set of high-quality global accounting standards is achievable.

In a similar vein, US representatives (including SEC representatives) at the United States - European Union Financial Markets Regulatory Dialogue (FMRD) held on 30 January 2014 in Washington had stressed the need for general convergence of accounting standards. The joint statement published after the meeting notes:

On accounting, participants noted with concern delays on the convergence of accounting standards and reiterated their commitment to convergence on high quality accounting standards. In this regard, they will take stock of progress made on convergence at the next FMRD in July 2014. Participants also will continue their efforts to ensure consistent application of accounting.

Please click for:

• Press release on the release of the draft strategic plan (link to SEC website)
• Draft Strategic Plan 2014-2018 (link to SEC website, open for comment until 10 March 2014)
• Joint Statement after the United States - European Union Financial Markets Regulatory Dialogue (link to European Commission website)

In the discussion paper, various options for improving the way in which the standards relate to this class of real property were examined. After analysis of the comments made by respondents, the IVSC Standards Board tentatively agreed that the additional requirements for valuing investment property that had been identified as needing consideration would best be dealt with by making amendments to the existing IVS 200 Real Property Interests and by including a section of investment property in IVS 300 Valuations for Financial Reporting.

The discussion paper also raised the view that the current IVS 233 Investment Property under Construction is an anomaly among the standards series as it deals with a subset of an asset class and only a specific type of valuation required under limited circumstances. The Board is suggesting to withdraw the current IVS 233 and to replace it with more broadly based guidance on the valuation of any type of real property that is either in the course of construction or where construction is contemplated.

Comments on both exposure drafts are invited before 30 April 2014. They are available on the IVSC website:

• Exposure Draft - Proposed Changes to IVS 230 and IVS 300
• Exposure Draft - Development Property

The conference will feature presentations by IASB Vice-Chairman Ian Mackintosh, IASB members (Stephen Cooper, Philippe Danjou, Martin Edelmann, Jan Engström, Gary Kabureck, Sue Lloyd and Mary Tokar), senior IASB technical staff and other IFRS experts.

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
• Keynote address
• Panel discussion on IFRS 9

The conference will also have break-out sessions featuring:

In addition, the conference will have special interest discussions on topical reporting issues of IFRS Disclosures and Financial Instruments.

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