April 2015 IASB meeting notes posted — Part 1

30 Apr 2015

The IASB met at its offices in London on 27–29 April 2015. We have posted the Deloitte observer notes from the sessions on fair value measurement and IFRS implementation issues.

Click through for direct access to the notes:

Monday, 27 April 2015

Tuesday, 28 April 2015

You can also access the preliminary and unofficial notes taken by Deloitte observers for the entire meeting.

FASB proposes ASU to defer the effective date of the new revenue standard

30 Apr 2015

The FASB has issued a proposed ASU, 'Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date', which would defer for one year the effective date of the new revenue standard for public and nonpublic entities reporting under US GAAP.

For public business entities, as well as certain nonprofit entities and employee benefit plans, the effective date under the proposal would be annual reporting periods, and interim periods therein, beginning after 15 December 2017. The effective date for all other entities would be one year later than this (i.e., 15 December 2018). Early adoption would be permitted if certain conditions are met (detailed in the proposal). Comments on the proposed ASU are due by 29 May 2015.

On 28 April 2015, the IASB tentatively decided to defer by one year the effective date of IFRS 15 Revenue from Contracts with Customers, to 1 January 2018, but did not propose changing the standard’s early-adoption provisions. As a result, the effective date of IFRS 15 would generally align with that in the proposed ASU. In May 2015, the IASB is expected to issue an exposure draft with a 30-day comment period on the deferral.

For more information, see Deloitte's related Heads Up newsletter and the press release and proposed ASU on the FASB’s website.

IASB will propose to defer the effective date of IFRS 15

28 Apr 2015

In its afternoon session today on IFRS 15 issues, the IASB has just decided to propose to defer the effective date of IFRS 15 'Revenue from Contracts with Customers' to 1 January 2018.

In this decision, the IASB followed its staff's recommendation included in an agenda paper for the meeting. The staff had argued that since IFRS 15 is a converged standard with US GAAP it would be "less confusing for the market if both IFRS and US GAAP preparers apply the new Standard at the same time". The US FASB has recently tentatively decided to defer for one year the effective date of its new revenue standard (ASU 2014-09 Revenue from Contracts with Customers) for public and nonpublic entities reporting under US GAAP. The IASB staff had also pointed out that the IASB is considering proposing some limited clarifying amendments to IFRS 15, so a degree of uncertainty regarding what IFRS 15 will finally look like exists until the IASB decides to either finalise, or not proceed with, these amendments. The staff also mentioned that even if these clarifying amendments have a different effective date than the standard itself, many entities might wish to apply the amendments at the same time as they first apply IFRS 15 to avoid repeated changes of their accounting methods.

The IASB granted these points and decided to propose to defer the effective date of IFRS 15 by one year to 1 January 2018. The IASB staff has been asked to prepare an exposure draft to this effect, which will be a stand-alone exposure draft only dealing with the effective date so it can be processed more quickly. The exposure draft will have a comment period of no less than 30 days and is expected to be issued in May 2015.

EFRAG's recommendation to the European Commission to adopt IFRS 15 without deferral of the effective date is not negatively affected by today's decision of the IASB as EFRAG recommends adoption of IFRS 15 in the European Union "with the effective date set by the IASB".

Please see also our observer notes from the meeting, our IFRS in Focus newsletter on the IASB's tentative decision and the IASB's corresponding press release.

IASB member discusses financial instruments

24 Apr 2015

In a report issued by the ‘Banking magazine: Association of Banks in Israel’, IASB member Sue Lloyd talks about IFRS 9, specifically looking at the new loan loss accounting model.

Ms Lloyd began by stating the reasons why IFRS 9 is an improvement over IAS 39, such as combining all aspects of financial instruments accounting into one standard and enhanced disclosures. Next, she describes the loan model under IFRS 9 which requires “financial institutions and other companies to estimate and account for expected credit losses from when they first lend money or invest in a financial instrument.” She notes that although the IASB and FASB have worked together to create a converged model, the FASB has taken a different approach. Lastly, she comments that the implementation of the expected loss model for loan loss provisions will require significant changes to financial institutions and other companies' systems and processes, which is the reason why the IASB set the mandatory effective date to 1 January 2018.

For more in­for­ma­tion, see the report on the IASB’s website.

ITG discusses implementation of impairment requirements in IFRS 9

24 Apr 2015

On 22 April 2015, the IFRS Transition Resource Group for Impairment of Financial Instruments (‘ITG’) held its first meeting. The ITG is a discussion forum established by the International Accounting Standards Board (IASB) to provide support for stakeholders on implementation issues arising from the new impairment requirements following the issue of IFRS 9 'Financial Instruments' (2014).

 Topics discussed at the meeting included:

  • Forecasts of future economic conditions.
  • Loan commitments — scope.
  • Expected credit losses — measurement date.
  • Assessment of significant increase in credit risk for guaranteed debt instruments.
  • The maximum period to consider when measuring expected credit losses.
  • Revolving credit facilities.
  • Measurement of expected credit losses for an issued financial guarantee contract.
  • Measurement of expected credit losses in respect of a modified financial asset.

For more information, and a summary of the discussions at the meeting, see Deloitte’s IFRS in Focus as well as the meeting summary on the IASB's website.

IASB publishes update on the conceptual framework project

24 Apr 2015

The staff of the IASB has published a document setting out the key tentative decisions made by the IASB up to the end of March 2015 that affect the proposals in the discussion paper on the conceptual framework.

On 18 July 2013, the IASB issued Discussion Paper A Review of the Conceptual Framework for Financial Reporting to consider areas where revisions and amendments of the existing conceptual framework was needed. At its January 2015 meeting the IASB substantially completed its redeliberations on the Discussion Paper and published a first summary of tentative decisions. In March 2015, the IASB discussed issues that have arisen in drafting the Conceptual Framework exposure draft. This new update includes the tentative decisions made in March. An exposure draft is expected in the second quarter of 2015.

For more information, see the document on the IASB’s website. In addition, Deloitte has followed the redeliberations of the IASB and all tentative decisions to date; see our conceptual framework project page for details.

Video recording of the stakeholder event at the IFRS Foundation Trustees’ meeting

24 Apr 2015

On 15 April 2015, the IFRS Foundation Trustees and the Canadian Accounting Standards Oversight Council (AsSOC) jointly hosted an event to discuss Canada's perspective on IFRS and global standards.

The event saw an opening address by Linda Mezon, Chair of the Canadian Accounting Standards, a eulogy to Harvey Goldschmid, who passed away in February 2015, by Michel Prada, Chairman of the IFRS Foundation, a keynote speech by Hans Hoogervorst, Chairman of the IASB, and a panel discussion "IFRS and Global Standards: A Canadian Perspective".

We already reported on the speech by Mr Hoogervorst who presented a mission statement for the IASB and the IFRS Foundation. A video recording of the whole event including the panel discussion has now been made available on the IASB's website. The whole recording is about one hour and twenty minutes long - the press release indicates the timing of each contribution. Please click to access the recording through the press release.

IASB member speaks about 'Financial Reporting and Financial Markets'

22 Apr 2015

At a conference in Madrid, Spain, IASB member Philippe Danjou gave a speech offering an inventory of IFRS adoption around the world and looked at trends and mega-trends in financial reporting.

Mr Danjou split his speech into three parts. He began by looking at the mega-trends that shape the IASB's technical work. Globalisation, currency changes, high leverage and asset valuation problems, low interest rates, diversification, and key performance indicators, non-GAAP figures and disclosure overload were the trends he identified.

Mr Danjou then turned to the adoption of IFRSs around the world. He offered a general overview as well as more detailed analyses of several jurisdictions including Japan, China, India and the United States.

Finally, Mr Danjou turned to the question of whether the adoption of IFRSs in the European Union brought the expected benefits. His analysis was based mainly on the responses to the European Commission's public consultation on the impact of  IFRS in the European Union. He concluded:

I am confident that IFRS has delivered most of the benefits that were expected and that the initial costs of learning and implementing the system, while they have not been capitalised on the balance sheets of companies and investors, would not need to be written off if they had been.

Please click to access the full text of the speech on the IASB website.

IFRS Foundation issues Formula Linkbase 2015

20 Apr 2015

The IFRS Foundation has issued the 2015 IFRS Taxonomy Formula Linkbase. The Formula Linkbase is updated from the 2014 version; it is designed to help improve the data quality of IFRS Taxonomy filings and to provide additional guidance for both technical and financial reporting audiences so that they can better understand the IFRS concepts and their meanings.

From a business perspective, the formula linkbase provides additional validation opportunities for preparers to help ensure that the facts reported in their filings are of a high quality. From a technical perspective, it improves the quality of IFRS Taxonomy filings based on the final IFRS Taxonomy 2015.

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

IASB to discuss effective date of IFRS 15

20 Apr 2015

In preparation for the IASB's meeting next week, an agenda paper has been released today discussing the effective date of IFRS 15 and asking the IASB whether it wishes to defer the effective date in the light of (i) issues emerging from discussions of the Revenue Transition Resource Group (TRG) and (ii) the FASB’s tentative decision regarding the effective date.

In the paper the IASB staff makes the following recommendations:

We recommend that the IASB defer the effective date of IFRS 15 by one year to 1 January 2018. An entity would continue to be permitted to apply the requirements to annual periods beginning before that date.

If the IASB agrees to propose a deferral of the effective date, we recommend publishing the proposed deferral for comment as a separate narrow-scope Exposure Draft. That Exposure Draft would include a comment period of no less than 30 days that allows for the finalisation of the IASB’s discussions in this respect at the July 2015 board meeting.

In May 2014, the IASB and FASB issued converged standards on revenue recognition and also agreed a common effective date. However, in April 2015 the FASB tentatively decided to defer for one year the effective date of its new revenue standard (ASU 2014-09 Revenue From Contracts With Customers) for public and nonpublic entities reporting under US GAAP. The IASB staff is now asking the IASB whether it wants to follow suit in the light of issues discussed at the TRG meetings and intended clarifications as well as in order to keep up convergence with the FASB.

Please click to access the agenda paper on the IASB website. It offers the staff's recommendations, historical background, an explanation of what the FASB has decided, and a summary of IFRS stakeholder feedback.

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.