Philippe Maystadt was appointed by EU Commissioner Barnier as a special advisor on 19 March 2013 to set out recommendations to “reinforce the EU's contribution to International Financial Reporting Standards (IFRS), and to improve the governance of the institutions developing these standards.” In his final report presented in November 2013, Mr Maystadt recommended transforming EFRAG with a view to strengthening the European Union's influence in international accounting standard-setting.

In his continued role, Mr Maystadt is expected to co-ordinate the efforts of public and private organisations in implementing the recommendations of the report. Commissioner Barnier commented:

The EU needs a sound framework for the development of high quality accounting standards. I am happy that Mr Maystadt agreed to continue his special mission to ensure that the system for the adoption of the International Financial Reporting Standards (IFRS) put in place by the European Union is effective and enables the EU to play its full role in the debate. I am confident that the expertise of Mr Maystadt will significantly benefit the swift implementation of the necessary reforms so that our undertakings and the users of their financial statements can as soon as possible benefit from high-quality international accounting standards.

Please click for the press release on the European Commission website.

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

Wednesday, 29 January 2014

Items for continuing consideration

• IAS 12 – Recognition of deferred tax assets for unrealised losses
• IAS 12 – Recognition and measurement of deferred tax assets when an entity is loss making
• IAS 19 – Employee benefit plans with a guaranteed return on contributions or notional contributions
• IFRS 10 – An investment entity subsidiary that also provides investment-related services
• IFRS 10 – Exemption from preparing consolidated financial statements requirements

Finalisation of tentative agenda decisions

• IAS 29 – Applicability of the concept of financial capital maintenance defined in constant purchasing power units
• IAS 32 – Classification of mandatorily convertible instruments subject to a cap and a floor with an issuer option to convert into the maximum (fixed) number of shares
• IAS 32 – Classification of instruments that mandatorily convert into a variable number of shares upon a ‘non-viability’ contingent event

New issues

• IAS 32 – Classification of an instrument that is mandatorily convertible into a variable number of shares, subject to a cap and a floor

Items for continuing consideration (continued)

• IFRS 11 – Analysis of implementation issues

New issues (continued)

• IAS 12 – Impact of an internal reorganisation on deferred tax
• IAS 12 – Threshold of recognition of an asset on uncertain tax position

Feedback from the IASB

• IAS 1 – Disclosure requirements about an assessment of going concern (update on IASB's decision not to proceed with proposed amendments)

Administrative session

• Interpretations Committee work in progress

Thursday, 30 January 2014 (09:00-12:55)

New issues (continued)

• IFRS 3 & IFRS 10 – Identification of the acquirer in accordance with IFRS 3 and the parent in accordance with IFRS 10 in a stapling arrangement
• IFRS 10 – A non-investment entity’s application of the equity method for investment entity investees
• IAS 16 – Disclosure of carrying amount information for assets stated at revalued amounts
• IAS 37 – Measurement of liabilities under IAS 37 within the context of emission trading schemes
• IAS 28 – Inconsistency with paragraph 31 of IAS 2
• IAS 1 – Issues related to the application of IAS 1
• IAS 34 – Condensed statement of cash flows

Highlights were the publication of:

• final comment letter on IASB DP A Review of the Conceptual Framework for Financial Reporting
• draft comment letter on IASB ED Annual Improvements to IFRSs 2012–2014 Cycle
• first papers in EFRAG's new Short Discussion Series
• final endorsement advice on IASB narrow scope amendment Defined Benefit Plans: Employee Contributions (Amendments to IAS 19)
• draft endorsement advice on the Annual Improvements to IFRSs 2010–2012 and 2011–2013 Cycles

Additional topics discussed in the newsletter are:

• IFRS 3 Business Combinations — Subsequent accounting for acquisition step-ups
• Long-term investment business models
• Accounting for macro hedge accounting
• IFRS 9 Financial Instruments — Impairment
• IFRS 11 Joint Arrangements
• Post-implementation review of IFRS 3
• IASB ED Equity Method: Share of Other Net Asset Changes — Proposed amendments to IAS 28

Click for the EFRAG Update (link to EFRAG website).

The agenda for the meeting is summarised below:

Agenda papers for this meeting will be made available on the IASB's website in due course.

Following the introduction of the <IR> Framework in December 2013, the three organisations sponsoring the research award have identified three areas that need to be developed further.  They therefore invite research proposals addressing the following areas:

1. Meeting users' information needs – looking at what users of integrated reports from large private sector, for-profit companies, want to see. This project would focus on the similarities and differences between the needs and expectations of different equity and debt holders, and others who provide financial capital.
2. Materiality and completeness vs. conciseness in Integrated Reporting – focusing on the theoretical, policy and practical issues concerning the role of materiality in determining the balance between completeness and conciseness in an integrated report.
3. Organisational characteristics and Integrated Reporting – focusing on the theoretical, policy and practical issues concerning application of the Framework to different types of organisations in different jurisdictions and under different circumstances.

A combined sum of up to £50,000 will be awarded for up to three projects that meet the criteria set. The deadline for research proposal submissions is 28 February 2014.

Please click for more information on the ACCA website:

• Press release
• Call for Research Proposals: Integrated Reporting

Participants will have the opportunity to discuss the approach for European standard-setting in public sector accounting with European and national policymakers, representatives from the public sector, accountants and auditors. The roundtable is free of charge but the number of participants is limited.

Please click for more information on the FEE website.

Due to the integration of XBRL into the IASB standard-setting process and the creation of a new IASB staff group for the Disclosure Initiative, the IASB conducted a review of the IFRS Taxonomy Due Process. As a result, IFRS Taxonomy Consultative Group was created. The group replaces the XBRL Advisory Council (XAC) and the XBRL Quality Review Team (XQRT). The XAC is no longer operational, while the XQRT will only remain in existence until the new IFRS Taxonomy Consultative Group is up and running. In addition, the IFRS Advisory Council has taken on some of the general strategic responsibility of the XAC that specifically relate to how technology may impact standard setting and future corporate reporting. 

The IFRS Taxonomy Consultative Group will consist of 16-20 members, including a Chair and Vice-Chair. Candidates should have an expertise in at least one of the following areas:

• XBRL
• General taxonomy design
• Financial reporting ontology
• Consumption and preparation of electronically marked-up IFRS financial statements.

Application will be accepted until 28 February 2014.

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

Annual Improvements to IFRSs 2010–2012 Cycle affects seven standards (IFRS 2, IFRS 3, IFRS 8, IFRS 13, IAS 16, IAS 24 and IAS 38), Annual Improvements to IFRSs 2011–2013 Cycle affects four standards (IFRS 1, IFRS 3, IFRS 13, IAS 40). EFRAG's initial assessment is that all of the amendments satisfy the technical criteria for EU endorsement and EFRAG should therefore recommend their endorsement.

The endorsement status report, dated 31 January 2014, is available here.

The IFAC / ICAS paper, Do We Need a Roadmap for Financial Reporting: Developing the IASB’s Conceptual Framework, discusses the role conceptual framework serves in (1) the standard-setting process and (2) practical use in financial reporting. It also explores whether the scope of the IASB’s conceptual framework covers today’s evolving financial reporting landscape and whether a single framework is globally feasible.

In addition, the paper examines the potential core building blocks and characteristics of the conceptual framework. These core building blocks include:

• Scope of financial reporting.
• Stewardship.
• Business model.
• Entity versus proprietary perspectives.
• Prudence.
• Unit of account.
• Concept of capital.

The IFAC and ICAS have prepared this paper to encourage discussion between stakeholders as they provide feedback to the IASB’s Discussion Paper, A Review of the Conceptual Framework for Financial Reporting.

For more information, see:

• Press release and IFAC/ICAS paper (links to IFAC website).
• IAS Plus project page on the Conceptual Framework project.