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IFRS Foundation appoints two Trustees

18 Nov 2014

The IFRS Foundation has announced the appointments of Alan Beller and Werner Brandt as Trustees of the IFRS Foundation. The appointments will begin on 1 January 2015 and will expire on 31 December 2017.

Mr Alan Beller was Director of the Division of Corporation Finance of the US Securities and Exchange Commission (SEC) and a Senior Counsellor to the SEC from January 2002 until February 2006. Mr Beller's tenure at the SEC saw far-reaching corporate governance, financial disclosure and securities offering reforms, including the implementation of the corporate provisions of the Sarbanes-Oxley Act of 2002.

Dr Werner Brandt is the Chairman of the Board of the German Financial Reporting Enforcement Panel (FREP) and was a member of the Board of the Accounting Standards Committee of Germany (DRSC) from 2003 to 2011, in which he played a leading role in defining the future positioning and structure of the DRSC.

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

Agenda for the December 2014 ASAF meeting

18 Nov 2014

The International Accounting Standards Board (IASB) has released the tentative agenda for the meeting of the Accounting Standards Advisory Forum (ASAF), which is to be held at the IASB's offices in London on 4-5 December 2014. The meeting will discuss a number of the IASB's active projects, including the disclosure initiative, leases, insurance contracts, and the upcoming agenda consultation.

The agenda for the meeting is summarised below:

Thursday, 4 December 2014 (9:35-17:15)

  • Disclosure initiative
  • Emissions trading schemes
  • Rate-regulated activities
  • Leases
  • Post-employment benefits
  • Dynamic risk accounting

Friday, 5 December 2014 (9:00-15:25)

  • Equity method of accounting
  • Foreign currency translation
  • Inflation accounting
  • Insurance contracts
  • Current projects and research update
  • 2015 Agenda Consultation
  • Agenda planning and debrief

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

2015 IFRS Blue Book — Coming soon

18 Nov 2014

The IFRS Foundation has announced that the '2015 IFRS Consolidated without early application' will be published in December 2014. This volume (nicknamed the "Blue Book") will contain all official pronouncements that are mandatory on 1 January 2015. It does not include IFRSs with an effective date after 1 January 2015. The Blue Book differs from the traditional Bound Volume (the "Red Book"), which includes all pronouncements issued at the publication date, including those that do not become mandatory until a future date.

The Blue Book will sell for £70 plus shipping (academic, developing country, and volume discounts apply). You will find more information and ordering details here.

Japan updates list of 'designated' IFRSs

17 Nov 2014

The Financial Services Agency (FSA) of Japan has announced that additional IFRSs were designated for use by companies voluntarily applying IFRSs in Japan. The announcement effectively includes all IASB pronouncements issued up to 30 June 2014.

Newly designated IFRSs include:

  • IFRS 14 Regulatory Deferral Accounts;
  • IFRS 15 Revenue from Contracts with Customers;
  • the amendments bringing bearer plants into the scope of IAS 16;
  • the amendments regarding the clarification of acceptable methods of depreciation and amortisation; and
  • the amendments regarding the accounting for acquisitions of an interest in a joint operation.

Click for the FSA press release (in Japanese only, link to FSA website).

Prada reiterates the case for global accounting standards

17 Nov 2014

The Chairman of the IFRS Foundation Trustees, Michel Prada, delivered a speech entitled 'Korea and IFRS' at a seminar hosted by the Korean Accounting Standards Board (KASB). In his speech, he praised the efforts of the KASB and provided an update on the progress of achieving a single set of global accounting standards.

Following the theme of his recent speeches made in Japan and China earlier this month, Mr Prada provided a case for global accounting standards and uses the actions taken in Korea to serve as “an exemplary role model in the region.” 

Mr Prada states that businesses in Korea benefit from full adoption of IFRS because they can report a set of financial statements that are familiar with investors around the world. According to a recent KASB review of the consequences of the move to IFRS, the introduction of IFRS has “led to an improvement in the quality of earnings, as well as improving comparability between different Korean companies as well as their international peers.” Mr Prada noted that other jurisdictions have experienced similar conclusions. He also states that the continued economic and financial globalisation has caused the G20, International Monetary Fund, World Bank and IOSCO to support the work of the IFRS Foundation (IFRSF) and the IASB.

In addition, Mr Prada commented on progress made in the development of high quality, global accounting standards, which included IFRSF study on the use of IFRS around the world and the requirement of 114 out of 138 countries to require the use of IFRS for all or most public companies. Significant progress has been made in jurisdictions that have not yet required the use of IFRS, such as China, India, Japan and United States.

Lastly, he reflected on the “evolution” of the IFRSF and IASB and how the upcoming public consultation on the structure and effectiveness of the organisation will provide stakeholders with an opportunity to voice their comments.

The full text of Mr Prada's speech is avail­able on the IASB's website. The KASB has published a press release on the seminar on its website.

EU Directive on disclosure of non-financial and diversity information published

17 Nov 2014

The Directive on disclosure of non-financial and diversity information by large companies and groups addressing environmental, social, and governance (ESG) issues has been published in the Official Journal of the EU on 15 November 2014.

According to the new Directive, large public-interest companies with more than 500 employees are required to disclose relevant and material environmental and social information in their annual reports. Disclosures shall be provided at group level, rather than by each individual company within a group.

Large listed companies will also be required to provide information on their diversity policy, covering age, gender, geographical diversity, and educational and professional background. Disclosures shall set out the objectives of the policy, how it has been implemented, and results.

The Directive enters into force on the twentieth day after its publication. Member States have to transpose the Directive into national law by 6 December 2016. The new provisions have to be applied to all undertakings within the scope of the Directive for the financial year starting on 1 January 2017 or during the calendar year 2017.

Please click for access to the full text of the Directive in the Official Journal (available in all languages of the EU).

Association of German Banks supports IASB

13 Nov 2014

The 'Bundesverband deutscher Banken' (Association of German Banks), representing more than 200 private commercial banks in Germany, has contributed to the discussion around IFRSs in Europe and voiced strong support for existing structures and processes.

Without being a direct response to the European Commission's questionnaire seeking respondents' views on the impact of International Financial Reporting Standards (IFRS) in the European Union, the timing and content of a booklet The future of IFRSs in Europe published today shows that not all European voices criticise and question the application of full and unaltered IFRSs in Europe.

The booklet claims that the debate on appropriate accounting reveals fears and worries that prove to be unwarranted on closer scrutiny. It therefore provides a detailed overview of how an IFRS is developed and becomes applicable law in Europe. The booklet concedes that the process for developing IFRSs is "unlike the conventional legislative process we are familiar with in Europe", but it also notes that the IASB's standard-setting process has been continuously improved over the past ten years to strengthen transparency and participation and the setting-up of a Monitoring Board in 2009 has established a direct link to the major regulators around the world.

Therefore, the German private banks view recent international developments (first in the US, where the FASB turned away from some convergence projects, and now in Europe, where politicians call for more of a European influence and maybe a European version of IFRSs) critical:

We take a critical view of these developments. So that it can continue to perform its job as an independent global standard-setter, the IASB should not be allowed to become a plaything of diverging national interests. Purely national interests inevitably have to take a back seat in efforts to develop an internationally accepted financial reporting convention. The IASB’s work as a standard-setter should therefore be kept largely free of political influence in the future as well. This is the only way to ensure high-quality standards and uphold the IASB's good reputation in the long term.

The banks also believe that any tinkering with the European endorsement process would be harmful:

Any European go-it-alone approach must be avoided, however. The non-recognition of individual IFRSs in Europe (carve-out) or the establishment of European accounting rules would be at odds with the target of uniform international accounting standards. The comparability of financial information would be impaired; the result would be a competitive handicap for internationally operating companies based in Europe.

In the press release accompanying the publication of the booklet, the German banks even express the hope that the endorsement process of IFRS 9 Financial Instruments, which is currently postponed in the EU, would be taken up soon and concluded speedily.

The booklet also states that a strict and efficient enforcement is needed to reap the benefits of using international standards. However, similar to the points made above, the banks maintain that European Securities and Markets Authority (ESMA) must avoid interfering with international processes:

We support ESMA's activities as long as there is a strict separation between standard-setting and enforcement. On the other hand, setting actual accounting and valuation rules is not ESMA's job in our view, but should be left to the IASB and the IFRS Interpretations Committee.

Please click for the following information on the website of the Association of German Banks:

  • Access to the booklet The future of IFRSs in Europe(it can either be downloaded or ordered as printed copy free of charge):
  • Press release (German language only)

Prada warns that modification of IFRSs will lead to lack of international recognition

13 Nov 2014

The Chairman of the IFRS Foundation Trustees, Michel Prada, delivered a speech entitled 'Accounting, markets and global economic growth' at the Shanghai National Accounting Institute. In his speech, he explained how the application of global standards is interrelated with economic growth and commented on the situation in China.

Mr Prada's overview of the success of IFRSs around the world was similar to his explanations in Tokyo earlier this week. He praised IFRSs as global standards for financial information that can help to power the global economy, which would be especially important today, "because every major jurisdiction seeks to maintain a level of economic growth, to provide further time to heal the wounds from the global financial crisis and to facilitate a continued economic recovery".

From the world economy Mr Prada turned to the role of efficient markets in China in connection with the 2020 reform programme that identifies the decisive role of markets and the need to facilitate overseas companies' entry to China and Chinese companies' expansion abroad. He stressed that the IFRS Foundation is very willing to work with the Chinese authorities to achieve this goal and he also included the hope, that a funding mechanism might be found that allows China to fully contribute to the costs of the IFRS Foundation and would see increased Chinese support for the Asia-Oceania office of the IFRS Foundation in Tokyo.

However, Mr Prada identified the modification of IFRSs as the major challenge China is facing. He noted the efforts China made in modernising its accounting systems and called them a "considerable undertaking for a country the size of China". He also mentioned that is was very impressive that the new Chinese standards are required for use by all large and medium-sized Chinese companies, not just listed ones. Yet similar to the point about familiarity he made in Japan, Mr Prada pointed out that international investors are wary when the IASB's standards are modified, even if only in small ways. He commented:

China has not fully received the international recognition it deserves by your efforts to move to global accounting standards. It is the same problem faced by any jurisdiction that chooses to adjust IFRS to meet local requirements. Other jurisdictions that have adopted IFRS in full and without modification often assume that the adjustments must be substantial to warrant such a change. So, the question for China is whether the relatively minor deviations from IFRS warrant the lack of international recognition that results from those changes? This is a question that China alone can answer.

The full text of Mr Prada's speech is available on the IASB's website.

IFRS Foundation updates the IFRS Taxonomy

12 Nov 2014

The IFRS Foundation has published IFRS Taxonomy 2014 Interim Release 2 which updates the taxonomy for IFRS 15 and common reporting practice in transport and pharmaceuticals sectors.

The interim release provides additional taxonomy concepts that support the consistent adoption and implementation of IFRS.

More details (and a link to the interim release) are available in the press release on the IASB website. Our dedicated XBRL page is here.

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.