The IASB proposed deferring the effective date of IFRS 15 in May 2015 to give entities additional time to implement targeted amendments to IFRS 15 Revenue from Contracts with Customers that the IASB has tentatively decided on and to acknowledge that IFRS 15 was issued later than had been intended, so implementation time was shorter than anticipated in the first place. Although the AOSSG sees the validity of these arguments it believes that the IASB should try to avoid similar cases in the future:

In principle, the AOSSG believes that the IASB should undergo sufficient due process to carefully consider every aspect of the standard (including the effective date) before finalising the standard. Although the AOSSG generally agrees with the need to extend the effective date for this case, the AOSSG encourages the IASB to seek to improve its due process based on the lessons learnt, such that the IASB will minimize the risks of delaying the effective date in future standards.

The AOSSG makes two suggestions how this could be achieved:

• The IASB could introduce a protocol to redeliberate the effective date when the issuance of the standard is later than originally anticipated or to defer the final decision of the effective date until immediately before the issuance of the standard.
• The IASB could set a formula for determining the implementation lead-time when it decides on the effective date.

Please click to access the comment letter on the AOSSG website.

Meeting ac­tiv­i­ties in­cluded the fol­low­ing:

• Ex­ec­u­tive session — The trustees and IFRS Foundation Monitoring Board were updated on (1) governance developments, (2) due-process activities, (3) the IFRS Foundation’s financial situation, and (4) the IASB’s technical activities and mission statement. In addition, the trustees discussed significant international developments concerning use of IFRSs in Europe, the Americas, Asia-Oceania, Africa, and the Middle East. Further, the trustees were updated on the (1) progress of the IFRS Foundation’s review of its structure and effectiveness and (2) nominations of new ASAF members.
• IASB chair­man’s report — IASB Chairman Hans Hoogervorst gave an update on the IASB’s progress on its conceptual framework, leases, disclosure initiative, and insurance projects.
• Report of the Due Process Over­sight Com­mit­tee (DPOC) — Jim Quigley led a discussion about the DPOC’s June 2015 meeting. For more in­for­ma­tion, see our related news item.
• Tommaso Padoa-Schioppa lecture — The IFRS Foundation jointly hosted an event with the European University Institute to discuss “systemic drivers of the 2008 financial crisis” and proposed reforms.

The full report on the IFRS Foun­da­tion trustees’ meeting is avail­able on the IASB’s website.

Meeting ac­tiv­i­ties in­cluded the fol­low­ing:

• Updates on tech­ni­cal ac­tiv­i­ties — The DPOC was updated on (1) the activity of the IASB’s and FASB’s joint transition resource group (TRG) for revenue recognition; (2) some of the IASB’s major projects, including leases, insurance contracts, the conceptual framework, macro hedging, rate-regulated activities, and inflationary environments; and (3) progress made on the IASB’s agenda consultation.
• IFRS Taxonomy — The DPOC analyzed two trials that the IASB conducted to assess proposed changes to the due process for the IFRS taxonomy and was pleased with the direction the IASB has taken.
• Review of Con­sul­ta­tive group — The DPOC reviewed various consultative groups (e.g., the ASAF, the revenue recognition TRG) to determine their effectiveness and ultimately concluded that most of the groups assessed were functioning well.
• Due process protocol — The DPOC discussed a report on the availability of comment letters that the IASB and IFRS Interpretations Committee have received, the availability of the IASB’s agenda papers, and the relationship between the IASB and IFRS Foundation and securities regulators.
• Cor­re­spon­dence — No new correspondence has been received since the DPOC’s previous meeting.

The full report on the DPOC meeting is avail­able on the IASB’s website.

The International Accounting Standards Board (IASB) published the comprehensive Exposure Draft ED/2015/3 Conceptual Framework for Financial Reporting containing proposals for topical areas where it considers a revision and amendment of the existing Conceptual Framework necessary on 28 May 2015. Included in the ED are proposals to revise the definitions of an asset and a liability, to introduce guidance on measurement and derecognition, and to set a framework for presentation and disclosure.

The consultation document published by EFRAG today seeks constituents' views on issues related to the ED. It contains preliminary positions of the EFRAG Board to facilitate discussion.

Generally, the view presented is that the Conceptual Framework as drafted in the ED would fail to meet European expectations. Cited are a lack of guidance, in particular on controversial issues that have discussed in the past (how to select a measurement basis and how to report performance, including what should be reported in profit or loss and when). EFRAG welcomes the greater emphasis given to stewardship and the reintroduction of prudence, however, it feels that more needs to be done in these two areas. EFRAG also disagrees with changing the qualitative characteristics of relevance and reliability instead of seeking a common understanding with constituents of what constitutes a reliable measurement.

The consultation document also indicates that EFRAG intends to request that the IASB extends its deadline for comments by 2 months (up to 26 December 2015) given the critical role the conceptual framework is intended to play in the effectiveness of the IASB standard-setting process in the future.

EFRAG requests comments on its consultation document by 26 October 2015 (possibly extended to 20 November if the IASB grants an extended comment period).

Please click to access the following documents on the EFRAG website:

• press release
• consultation document

The purpose of the TRG is to seek feed­back on po­ten­tial issues related to im­ple­men­ta­tion of the boards’ new revenue stan­dard. By an­a­lyz­ing and dis­cussing po­ten­tial im­ple­men­ta­tion issues, the TRG will help the boards de­ter­mine whether they need to take ad­di­tional action, such as pro­vid­ing clar­i­fi­ca­tion or issuing other guid­ance.

The agenda for the meeting is as follows:

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

The IFRS Foundation Constitution requires the IFRS Foundation Trustees to undertake a review of the entire structure of the IFRS Foundation and its effectiveness every five years. As announced last year, the Trustees are convinced that the last strategy review (2010-2012) already covered many issues that would be part of a Constitution review. Therefore, the Trustees have limited this review to three strategic areas:

• Relevance of IFRS
  • to consider whether the IASB should extend its remit beyond the current focus of the organisation, either in terms of the types of entity covered or the types of reporting;
  • to seek views on the Foundation's strategy for the IFRS Taxonomy; and
  • to consider the impact of developments in technology on maintaining the relevance of IFRS
• Consistent application of IFRS
  • to consider whether the Foundation is doing the right things to support the consistent application of IFRS and whether there is anything more it could and should be doing in this area;
• Governance and financing of the IFRS Foundation
  • to consider the current governance structure of the Foundation, including the functioning of the three-tier structure;
  • to review the provisions in the Constitution that relate to the Trustees’ geographical distribution, how to ensure an appropriate balance of professional backgrounds, and their terms of appointment;
  • to consider the focus and the frequency of the reviews of structure and effectiveness specified in the Constitution;
  • to review the provisions in the Constitution that relate to the IASB, including the optimum size of the Board and its geographical distribution, the balance between full-time and part-time members and their professional backgrounds, and their terms of appointment; and
  • seeking views on the Foundation’s funding model and how its functioning might be strengthened.

The Trustees believe that it is not necessary to open up all aspects of the Foundation for consultation and decided not to cover the primary objective of the Foundation and the processes and procedures in support of that objective, including the IASB's due process; what the Foundation and the IASB are doing in support of its commitment to the long-term goal of the adoption of IFRS; and the operations and performance of the Advisory Council.

Comments on the Request for Views document are requested by 30 November 2015. Please click for the following information on the IASB website:

• Press release
• Request for Views document

In our comment letter, we agree with the proposal to defer the effective date of IFRS 15 by one year. We also encourage the IASB and the FASB to continue with the targeted clarifications to the revenue requirements to ensure that a converged, stable, and operational standard is available to preparers sufficiently far in advance of the effective date. Lastly, we encourage the IASB to continue to monitor the implementation progress to make sure the revised effective date remains appropriate.

Please click to access the full comment letter.

In its comment letter, the ASBJ states that it finds some of the proposals useful and believes they would help entities avoid significant practical challenges when implementing the new revenue recognition requirements while also maintaining the usefulness of the resulting financial information. However, the ASBJ stresses that it is important that the FASB and the IASB try to remain converged on the requirements. Therefore, the ASBJ urges the FASB not to continue with these amendments and finalise them until "after the FASB sufficiently consult with the IASB on the optimal scope and contents of possible changes to the two standards". The IASB's proposed clarifications to IFRS 15 are currently expected for the third quarter of 2015.

US GAAP are one set of accounting standards for consolidated financial statements in Japan. The others are the newly issued Japan’s Modified International Standards (JMIS), designated IFRSs (IFRS as issued by the IASB), and Japanese GAAP.

Please click to access the comment letter on the ASBJ website.