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February

Agenda for the upcoming meeting of the IASB's Rate-regulated Activities Consultative Group

27 Feb 2015

The IASB's Rate-regulated Activities Consultative Group will meet in London on Wednesday, 4 March 2015. Main purpose of the meeting is to discuss an overview of the feedback received on the Discussion Paper on rate regulation, disclosure requirements, performance, types of regulatory deferral account balances, and the interaction with IFRIC 12.

The full agenda for the meeting is summarised below:

Wednesday, 4 March 2015 (10:15-16:00)

  • Overview of papers
  • Overview of feedback received
  • User information needs
  • What is performance?
  • What types of regulatory deferral account balances are there?
  • Service concession arrangements
  • Next steps and closing remarks

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

Agenda for the March 2015 Global Preparers Forum meeting

27 Feb 2015

Representatives of the International Accounting Standards Board (IASB) will meet with the Global Preparers Forum (GPF) in London on Thursday, 5 March 2015. The agenda for the meeting has been released, which includes updates from the IASB and IFRS Interpretations Committee, together with discussion on specific topics including the agenda consultation 2015, income tax accounting, business combinations under common control, a review of IAS 8, discount rates, share-based payments, and performance reporting.

The full agenda for the meeting is summarised below:

Thursday, 5 March 2015 (09:40-17:10)

  • IASB update
  • IFRS Interpretations Committee update:
    • IAS 2/IAS 38: Should interest be accreted on prepayments for long-term supply contracts?
    • IAS 16: Accounting for proceeds and costs of testing of PPE
    • IAS 12: Reflecting uncertainty in the recognition and measurement of income taxes
  • Agenda consultation 2015
  • Income tax accounting: The need for change?
  • Business combinations under common control
  • Review of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors
  • Discount rates
  • Share-based payments
  • Performance reporting

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

Assessment of the FASB's Private Company Council

27 Feb 2015

The US Financial Accounting Foundation (FAF) has issued a request for comment asking stakeholders for their assessment of the Private Company Council's (PCC) effectiveness and accomplishments as well as it's future role in setting standards for private companies.

While the IASB issued the IFRS for SMEs in July 2009, a set of international accounting requirements developed specifically for small and medium-sized entities (SMEs) prepared on IFRS foundations but a stand-alone product separate from the full set of International Financial Reporting Standards (IFRSs), the FAF went down a different road: After a long consultative process, which also included the question whether the IFRS for SMEs might be an appropriate solution for granting US private companies relief from listed company requirements under US GAAP, the FAF announced in May 2012 that a new body would be established to determine whether exceptions or modifications to existing US GAAP are necessary to address the needs of users of private company financial statements.

The PCC has two responsibilities:

  • It determines whether alternatives to existing US GAAP are necessary for private companies.
  • It serves as an advisory body to the FASB for private company aspects of projects on the FASB's active technical agenda.

While at first there were calls for creating a separate standard-setting board for private companies overseen by the FAF (an approach that was not chosen because of the danger of establishing two separate sets of US accounting standards), the impression has been lately that the PCC, even though working under the FASB, has not only been successful in developing alternatives for private companies, it has also proved to be a catalyst for the FASB's simplification efforts aimed at all companies – public and private. The FAF Chairman states: "The PCC has made significant progress in addressing issues that are important to private companies and the wider financial reporting community."

Please click for access to the press release and the request for comment on the FASB website. Comments are requested by 11 May 2015.

IASB member writes about the use of IFRSs around the world

27 Feb 2015

IASB member Philippe Danjou has written an article for 'Finance & Gestion' analysing the use of IFRS around the world.

Based on the jurisdiction profiles the IFRS Foundation has compiled, the article describes developments in the adoption of IFRSs since the European Union adopted IFRSs in 2005. Mr Danjou writes about the many jurisdictions that have adopted IFRSs since then as well as about the jurisdictions that haven't  - among them China and the United States. He lists three lessons that are to be learned from this anlysis:

  • IFRSs now play a preeminent role throughout the world - the majority of jurisdictions have made a commitment to IFRSs and the jurisdictions that apply them represent more than half of the world's wealth.
  • The European Union continues to be a major user of IFRSs but it is no longer the dominant one.
  • IFRSs are applied by 52 per cent of the Fortune 500 companies; US GAAP is applied by 29 per cent of these companies.

Please click to access Mr Danjou's article (English translation) on the IASB website. It is also available in the original version (French).

February 2015 IASB meeting notes — concluded

27 Feb 2015

The IASB met at its offices in London on 18–20 February 2015. Some of the meeting was a joint session with the FASB. We have posted the Deloitte observer notes from the joint session on revenue recognition.

Click through for direct access to the notes:

Wednesday, 18 February 2015

The preliminary and unofficial notes taken by Deloitte observers for the entire meeting are also available.

IASB issues 'Investor Perspectives' on insurance

26 Feb 2015

The International Accounting Standards Board (IASB) has released a new edition in its 'Investor Perspectives' series. In this edition, Steve Cooper (member of the IASB) provided an update on the IASB’s insurance contracts project.

Mr Cooper described four key advances made during deliberation concerning issues in practice. These key advances include:

  • Current, updated measure of insurance contract liabilities.
  • Using an asset-based discount rate only where relevant.
  • Recognising profit as services are delivered.
  • Recognising that in many respects insurance is not that different from other industries.

In addition, he stated one of the next steps for the IASB is to resolve issues concerning the pattern of profit recognition for participating contracts.

For more information, see the ‘Investor Perspective’ on the IASB’s website.

Paper on the use of OCI for the presentation of unearned profits

26 Feb 2015

For the upcoming meeting of the Accounting Standards Advisory Forum (ASAF), which is to be held at the IASB's offices in London on 26-27 March 2015, the Accounting Standards Board of Japan (ASBJ) has submitted a paper 'Insurance Contracts: Use of OCI for Presentation of Unearned Profits'. In the paper, the ASBJ proposes that the contractual service margin (CSM) could be presented as accumulated other comprehensive income (AOCI) as opposed to being presented in the liability section of the statement of financial position.

The ASBJ stresses that it very much appreciates the IASB's long-term efforts in developing an accounting standard for insurance contracts. Yet the ASBJ believes that there are still controversies that reflect technical aspects as well as significant impact on insurers' financial reporting. Among these, the ASBJ has come to believe that the presentation of the CSM warrants further consideration.

The proposal to presented the CSM as AOCI  aims at promoting consistency between the presentation requirement of the CSM and the definition of a liability under the Conceptual Framework. The ASBJ also believes that this AOCI presentation could be applied irrespective of whether insurance contracts contain non-participating or participating features as the CSM would not significantly differ between participating contracts and non-participating contracts.

The paper was prepared by the ASBJ to stimulate discussions at the next ASAF meeting as well as globally. It's overall aim is to contribute to the IASB's ongoing deliberations and thus to support the Board in developing an insurance contract accounting standard that will be accepted globally.

Please click to access the paper on the ASBJ's website.

IASB issues work plan update

26 Feb 2015

Following its February meeting, the IASB has published a new work plan. The only change to note is a change of scope and name in a research project.

Current status

The time table for the major projects remains as follows:

Project Current status Next project step Expected timing

Conceptual Framework — Comprehensive IASB project

Redeliberations

ED

Q1 2015

Financial instruments — Macro hedge accounting

Discussion paper

Comment letter analysis

Q1 2015

Insurance contracts

Re-exposure

Redeliberations

Q1 2015

Leases

Re-exposure

Target IFRS

H2 2015

Disclosure initiative — Reconciliation of liabilities from financing activities

ED

Public consultation

Q1 2015

IFRS for SMEs — Comprehensive review

Redeliberations

Target IFRS

Q1 or Q2 2015

Rate-regulated activities

Discussion paper

Comment letter analysis

Q1 2015

The research project on Emission trading schemes has been renamed "Pollutant pricing mechanisms". This reflects a January 2015 Board decision to change the scope, the approach and the direction of the project. The Board decided to take a fresh start and discard all tentative decisions taken in previous versions of the project. In addition, the scope of the project will be broadened to consider a variety of schemes that use emissions allowances to manage the emission of pollutants.

The revised IASB work plan (dated 24 February 2015) is available on the IASB's website. We have updated our project pages to reflect the updated work plan and other known developments.

February 2015 IASB meeting notes posted — part III

25 Feb 2015

The IASB met at its offices in London on 18–20 February 2015. Some of the meeting was a joint session with the FASB. We have posted the Deloitte observer notes from the sessions on dynamic risk management and the post-implementation review of IFRS 3.

Click through for direct access to the notes:

Thursday, 19 Feb­ru­ary 2015

Friday, 20 Feb­ru­ary 2015

The pre­lim­i­nary and un­of­fi­cial notes taken by De­loitte ob­servers for the entire meeting are also avail­able.

 

Summary of joint outreach event on rate-regulated activities

24 Feb 2015

The European Financial Reporting Advisory Group (EFRAG), the European Federation of Financial Analysts Societies (EFFAS) and the Association Belge des Analystes Financiers (ABAF), and the International Accounting Standards Board (IASB) have made available a report that summarises the discussions held during their outreach event held on 18 December 2014, which discussed how to achieve the objectives proposed in the IASB’s Discussion Paper ‘Reporting the Financial Effects of Rate Regulation’.

The topics discussed at the meeting included:

  • “What information about an entity’s rate-regulated activities and the rate-regulatory environment do users need?
  • Where do users currently obtain information about rate regulation?; and
  • Whether users prefer the impact of rate regulation to be included in the primary financial statements or/and as disclosures.”

For more in­for­ma­tion, see the press release and report on the EFRAG's website.

This reports complements a feedback statement on additional EFRAG outreach activities on rate regulation.

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