July 2015 IASB meeting notes posted — part 2

31 Jul 2015

The IASB met at its offices in London on 20 and 22-23 July 2015. We have posted the Deloitte observer notes from the sessions on dynamic risk management, revenue, financial instruments with characteristics of equity, and the agenda consultation.

Please click through for direct access to the notes:

Wednesday, 22 July 2015

Thursday, 23 July 2015

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

IPSASB issues consultation paper on accounting for social benefits

30 Jul 2015

The International Public Sector Accounting Standards Board (IPSASB) has issued a consultation paper that requests feedback on recognition and measurement requirements for social benefits, which the paper broadly defines as “benefits provided to individuals and households, in cash or in kind, to mitigate the effect of social risks.”

The paper proposes three approaches to accounting for social benefits:

  • Obligating event approach — Social benefits are considered in the context of the definition of a liability in the IPSASB’s conceptual framework for public-sector entities.
  • Social contract approach — The benefits are viewed from the standpoint of a social contract between a state and its citizens (e.g., because citizens have agreed to pay taxes).
  • Insurance approach — This approach is based on the assumption that “some social benefits are similar in practice to insurance contracts.”

Comments on the consultation paper are due by 31 January 2016.

For more in­for­ma­tion, see the press release and con­sul­ta­tion paper on IFAC’s Web site. On 21 September 2015, the IPSASB offers a webinar to discuss key issues in the consultation paper.

IASB proposes clarifications to IFRS 15

30 Jul 2015

The International Accounting Standards Board (IASB) has published an Exposure Draft (ED/2015/6) with proposed clarifications of IFRS 15 'Revenue from Contracts with Customers'. Comments are requested by 28 October 2015.



On 28 May 2014, the IASB issued IFRS 15 Revenue from Contracts with Customers. After issuing the new revenue standard, which is substantially the same as the FASB's ASU 2014-09, the IASB and the FASB formed the joint Revenue Transition Resource Group to support the implementation of the new standard. The substantial majority of the issues discussed by the TRG were resolved without the need for standard-setting activity. However, five topics (identifying performance obligations, principal versus agent considerations, licensing, collectability, and measuring non-cash consideration) were identified as requiring consideration by the Boards. In addition, some stakeholders asked for practical expedients. After considering the five topics and possible practical expedients, the IASB has decided to propose targeted amendments in three areas of IFRS 15 as well as some transition relief.


Suggested changes

The amendments proposed in ED/2015/6 Clarifications to IFRS 15 (proposed amendments to IFRS 15) address three of the five topics identified (identifying performance obligations, principal versus agent considerations, and licensing) and aim at transition relief for modified contracts and completed contracts. The IASB concluded that it was not necessary to amend IFRS 15 with respect to collectability or measuring non-cash consideration. In all its decisions, the IASB considered the need to balance helping entities with implementing IFRS 15 and not disrupting the implementation process.

Identifying performance obligations. IFRS 15 requires an entity to identify performance obligations on the basis of distinct promised goods or services. To clarify the concept of 'distinct', the IASB is proposing to amend the illustrative examples in IFRS 15.

Principal versus agent considerations. When another party is involved in providing goods or services to a customer, IFRS 15 requires an entity to determine whether it is the principal in the transaction or the agent on the basis of whether it controls the goods or services before they are transferred to the customer. To clarify how to assess control, the IASB is proposing to amend and extend the application guidance on this issue, amend some of the existing examples, and to add two more examples.

Licensing. When an entity grants a licence to a customer that is distinct from other promised goods or services, the entity has to determine whether the licence is transferred at a point in time or over time on the basis of whether the contract requires the entity to undertake activities that significantly affect the intellectual property to which the customer has rights. To clarify when an entity's activities significantly affect the intellectual property, the IASB is proposing to amend and extend the application guidance on this issue and some examples. Additionally, the IASB is proposing to extend the application guidance with respect to the application of the royalties constraint.

Transition relief. The IASB is proposing two additional practical expedients on transition to IFRS 15.

  • An entity may use hindsight in identifying the satisfied and unsatisfied performance obligations in a contract that has been modified before the beginning of the earliest period presented and in determining the transaction price.
  • An entity electing to use the full retrospective method does not have to apply IFRS 15 retrospectively to completed contracts at the beginning of the earliest period presented.

Other topics. In the ED the IASB expressly asks whether constituents agree with the assessment that amendments to IFRS 15 with respect to collectability, measuring non-cash consideration and a practical expedient with respect to the presentation of sales taxes are not required.


Alternative view

One Board member voted against the publication of the ED. This Board member supports all proposed clarifications and the additional transition relief, but disagrees with the proposal to require an entity to apply the amendments retrospectively.



The FASB has decided to propose more extensive amendments to its revenue standard. A first proposed Accounting Standards Update (ASU) on identifying performance obligations and on licensing was published in May 2015. A second proposed ASU relating to clarifications on principal versus agent considerations, collectability, measuring non-cash consideration and practical expedients relating to transition and the presentation of sales taxes is expected later in 2015. The Basis for Conclusions of the IASB's ED notes where differences in outcomes may arise as a consequence of the different decisions reached by both Boards.


Next steps

The IASB expects to complete its redeliberations by the end of 2015. The ED does not include a proposed an effective date, but the IASB’s objective is to finalise the proposed amendments with sufficient time to set an effective date that aligns with the revised effective date of IFRS 15.


Additional information

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EFRAG supports the IASB’s deferral of IFRS 15

29 Jul 2015

On 17 March 2015, the European Financial Reporting Advisory Group (EFRAG) submitted an endorsement advice letter to the European Commission (EC) that recommended IFRS 15 be adopted "with the effective date set by the IASB". This phrase means that if the IASB should at a future point of time decide to delay the effective date, it will also be delayed in Europe. With the IASB’s decision at its 22 July 2015 meeting to defer the effective date of IFRS 15 by one year; the EFRAG has notified the EC that it recommends the 1 January 2018 effective date, as set by the IASB, for application in Europe.

For more information, see the press release and the endorsement advice letter on the EFRAG’s website.

EFRAG draft comment letter on the IASB's exposure draft on amendments to IAS 19 and IFRIC 14 on pension accounting

24 Jul 2015

The European Financial Reporting Advisory Group (EFRAG) has issued a draft comment letter on IASB exposure draft (ED) ED/2015/5 “Remeasurement on a Plan Amendment, Curtailment or Settlement / Availability of a Refund from a Defined Benefit Plan (Proposed amendments to IAS 19 and IFRIC 14).”

On 18 June 2015, the IASB issued ED/2015/5 to address two issues submitted to the IFRS Interpretations Committee. The two issues are to clarify (1) the calculation of current service cost and net interest when an entity remeasures the net defined benefit liability (asset) when a plan amendment, curtailment or settlement occurs; and (2) whether a trustee's power to augment benefits or to wind up a plan affects the employer's unconditional right to a refund and thus, in accordance with IFRIC 14, restricts recognition of an asset.

In its draft comment letter, EFRAG supports the proposed amend­ments; however, the EFRAG would like input from constituents regarding any impediments concerning the limited retrospective application proposals.

Comments on the draft comment letter are due by 9 October 2015.

For more in­for­ma­tion, see the press release and draft comment letter on the EFRAG’s website.

Financial reporting implications of the Greek debt crisis

23 Jul 2015

Deloitte’s IFRS Global office has issued a newsletter which outlines the financial reporting implications of the Greek debt crisis and the main issues preparers should consider in their IFRS financial statements as at 30 June 2015.

The topics discussed in the newsletter include:

  • Financial reporting consequences related to (1) general disclosures, (2) impairment, and (3) going concern.
  • An outlook of additional measures the Greek government must take to secure its third bailout.
  • Direct consequences and broader economic consideration in case of Greek exit from the Eurozone.

 Please click to view the IFRS in Focus — The Greek debt crisis: Financial reporting implications for 30 June.

Latest IASB 'Investor Update' issued

23 Jul 2015

The IASB has issued the sixth edition of its newsletter 'IASB Investor Update' to provide investors with quick access to information on current accounting and financial reporting issues. The newsletter aims to keep investors informed on new and changing guidance.

This issue features:

  • Current projects that need input from the in­vest­ment community.
  • Spotlight: The Es­sen­tials — discussing how investors can use note disclosures to understand bank leverage.
  • In profile: An interview with Anne Simpson, Investment Director at the Global Governance division at California Public Employees’ Retirement System, discussing her views on financial reporting, integrated reporting and corporate governance.
  • Stay up-to-date: current events calendar.

The IASB Investor Update newslet­ter is available on the IASB's website.

IASB votes to defer the effective date of IFRS 15

22 Jul 2015

The IASB has just unanimously affirmed its proposal to defer the effective date of IFRS 15 'Revenue from Contracts with Customers' to 1 January 2018. Earlier application of IFRS 15 continues to be permitted.

The IASB had proposed the deferral as it has tentatively decided to propose some targeted amendments to IFRS 15 that some entities may wish to apply at the same time as they first apply IFRS 15. The IASB also acknowledges that IFRS 15 was issued later than had been intended, so implementation time was shorter than anticipated.

Earlier this month, the FASB affirmed its proposal to defer for one year the effective date of its new revenue standard ASU 2014-09 Revenue From Contracts With Customers.

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

Survey on the impact of the forthcoming new IFRS on leases on financial covenants in loan agreements

22 Jul 2015

EFRAG, the IASB and the National Standard Setters of France, Germany, Italy, Lithuania, and the UK invite companies to participate in a public survey on impact of the forthcoming new IFRS on Leases on financial covenants in loan agreements.

The objective the survey is

  • to assess the possible impact of the new IFRS on leases on lenders' business practices,
  • to increase the awareness of the effects of the new IFRS on financial covenants, and
  • to better understand the extent to which covenants are based on figures reported in accordance with IFRS.

More information, a link to the survey, and a list of contacts in the different countries are available in the press release on the EFRAG website. Participants are requested to answer the survey questions and submit their replies not later than 30 September 2015.

17th ESMA enforcement decisions report released

22 Jul 2015

The European Securities and Markets Authority (ESMA) has published further extracts from its confidential database of enforcement decisions taken by European national enforcers. This batch deals with decisions in relation to IAS 1, IAS 11, IAS 27, IAS 28, IAS 36, IAS 39, IFRS 3, IFRS 6, IFRS 10, IFRS 13, and IFRIC 19.

The European national enforcers of financial information monitor and review financial statements published by issuers with securities traded on a regulated European market and who prepare their financial statements in accordance with International Financial Reporting Standards (IFRS) and consider whether they comply with IFRS and other applicable reporting requirements, including relevant national law.

ESMA has developed a confidential database of enforcement decisions taken by individual European enforcers as a source of information to foster appropriate application of IFRS.

The publication of enforcement decisions is designed to inform market participants about which accounting treatments European national enforcers may consider as complying with IFRS, i.e. whether the treatments are considered as being within the accepted range of those permitted by IFRS. ESMA considers the publication of the decisions, together with the rationale behind them, will contribute to a consistent application of IFRS in the European Union.

Topics covered in the latest batch of extracts, covering the period from February 2012 to November 2014, include:



IAS 27 Separate Financial Statements
IAS 39Financial Instruments: Recognition and Measurement
IFRS 10Consolidated Financial Statements
IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments

Extinguishment of debt

IAS 39 Financial Instruments: Recognition and Measurement

Impairment charge for a decline in the fair value of available for sale financial assets

IFRS 13 Fair Value Measurement

Measurement of financial instruments at fair value

IFRS 3Business Combinations
IFRS 13Fair Value Measurement

Fair value measurement in business combination

IAS 1Presentation of Financial Statements
IAS 28Investments in Associates and Joint Ventures

Presentation of financial statements

IAS 11 — Construction Contracts

Accounting for claims in construction contracts

IAS 36Impairment of Assets
Exploration for and Evaluation of Mineral Resources 

Impairment testing

Click for access to the full report (link to ESMA website). The ESMA has also published an updated overview of all enforcement decisions ever published.

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