October

Due Process Oversight Committee holds October 2015 meeting

26 Oct 2015

The Due Process Oversight Committee (DPOC) met in Beijing on 13 October 2015.

Meeting activities included the following:

  • Updates on technical activities — The DPOC was presented with a report that outlined the due process activities for all projects on the IASB’s current agenda and questioned the IASB representatives on the Conceptual Framework project (especially around the extended comment deadline), Dynamic risk management (divergence of views between users and preparers), Materiality (practice statement vs. standard), Discount rates (way forward), and High inflation (inactive status of the project).
  • Different effective dates of IFRS 9 and the new standard on insurance contracts — The DPOC noted in particular that the views of Board members were very split on proposing the deferral approach, but that there were sufficient votes from the Board to push ahead with the issue of the ED. The DPOC also noted the ‘sunset’ clause included in the proposed deferral approach as this would send out a strong signal that the IASB was determined to complete the insurance contracts project. Lastly, the DPOC approved of the shortened comment period for the ED.
  • Agenda consultation — The DPOC noted that the questions asked as part of the agenda consultation were relatively open, which means that considering the feedback, summarising it, and acting on it could be a challenge. The DPOC asked to be provided with a summary of the feedback received and the IASB’s intended reaction.
  • IFRS Taxonomy — The DPOC was informed that the trial of integrating proposed taxonomy updates with exposure drafts the IASB publishes had resulted in the highest ever level of response to a proposed change to the IFRS Taxonomy. However, it also showed limited support for the approach. It is now proposed to consult on taxonomy updates at the same time as but not integrated with the standard development.
  • Review of Consultative group — The DPOC reviewed various consultative groups (e.g., the TRG, the ITG, and the ITCG) to determine their effectiveness and ultimately concluded that the groups assessed were functioning well.
  • 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.

Agenda for the October 2015 ITCG meeting

26 Oct 2015

The agenda is available for the next meeting of the IFRS Taxonomy Consultative Group (ITCG), which be held in London on 27 October 2015.

The agenda is summarised below:

Tuesday 27 October 2015 (09:00-17:00)

  • Welcome
  • Update on activities
  • Consultation Paper — European Single Electronic Format (ESEF)
  • IFRS Foundation's Review of Structure and Effectiveness
    • Overview
    • World standard-setters meeting discussions
  • Role of technology and the IFRS Taxonomy strategy
    • Introduction to small group discussions
    • Small group discussions
    • Report back from small group discussions
  • IFRS Taxonomy versioning control
  • IFRS Taxonomy due process update
  • IFRS Taxonomy content areas for review

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

Upcoming agenda consultation events in Europe

26 Oct 2015

The European Financial Reporting Advisory Group (EFRAG) along with the International Accounting Standards Board (IASB) will be hosting joint outreach events in November on the 2015 IASB Agenda Consultation and EFRAG’s own proactive Agenda Consultation.

On 12 November 2015, a joint outreach event will occur in Paris and will be co-hosted by the French standard-setter ANC in Paris. The event, which will be in French, will feature IASB member Philippe Danjou as a speaker, and is titled "What should EFRAG, the ANC and the IASB focus on before 2020?" Please click for more information in the press release on the EFRAG website. Registration for the event is available through the ANC.

The next joint outreach event will occur on 23 November 2015 in Brussels. The event, which will be in English, will feature IASB Senior Technical Manager April Pitman and EFRAG TEG Chairman Francoise Flores. For more information, including how to register, see the press release on the EFRAG website.


October 2015 IASB meeting notes posted — part 2 (concluded)

23 Oct 2015

The IASB met at its offices in London on 20–22 October 2015. We have posted the remaining Deloitte observer notes from the sessions on definition of a business, goodwill and impairment, IFRS implementation issues, insurance and IFRS 9, and insurance contracts.

Please click through for direct access to the notes:

Wednesday, 21 October 2015

Thursday, 22 October 2015

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

IASB publishes update on its investor programme

22 Oct 2015

In December 2014, the International Accounting Standards Board (IASB) launched a new 'Investors in Financial Reporting' programme designed to foster greater investor participation in the development of International Financial Reporting Standards (IFRS). In anticipation of the one-year anniversary of the programme and since four new investors have joined, the IASB has published an article on the achievements so far.

The article assesses the impact of the programme on both the IASB and the investors involved. Please click to access the article and a press release on the four new joiners to the programme on the IASB website.

October 2015 IASB meeting notes posted — part 1

21 Oct 2015

The IASB is meeting at its offices in London on 20–22 October 2015. We have posted the Deloitte observer notes from the sessions on leases, pollutant pricing mechanisms, Impairment Transition Group update, financial instruments with characteristics of equity, and the disclosure initiative.

IFRS Interpretations Committee publishes draft interpretation on foreign currency transactions and advance consideration

21 Oct 2015

The IASB’s IFRS Interpretations Committee has published a draft interpretation 'Foreign Currency Transactions and Advance Consideration'. Comments are requested by 19 January 2016.

 

Background

The IFRS Interpretations Committee observed some diversity in practice regarding the exchange rate used when reporting transactions that are denominated in a foreign currency in accordance with IAS 21 The Effects of Changes in Foreign Exchange Rates in circumstances in which consideration is received or paid in advance of the recognition of the related asset, expense or income. As a consequence, the Interpretations Committee decided to develop an interpretation.

 

Proposed guidance

Scope

The interpretation is intended to address foreign currency transactions where

  • there is consideration that is denominated or priced in a foreign currency;
  • the entity recognises a prepayment asset or a deferred income liability in respect of that consideration, in advance of the recognition of the related asset, expense or income; and
  • the prepayment asset or deferred income liability is non-monetary.

Consensus

The Interpretations Committee came to the following conclusion:

  • The date of the transaction, for the purpose of determining the exchange rate, is the earlier of (a) the date of initial recognition of the non-monetary prepayment asset or deferred income liability and (b) the date that the asset, expense or income is recognised in the financial statements.
  • If the transaction is recognised in stages, a date of transaction is established for each stage.
  • When there is more than one date of the transaction, the exchange rate for each date is to be applied to translate that part of the transaction.

Transition

On initial application, entities would apply the interpretation either:

  • retrospectively in accordance with IAS 8; or
  • prospectively to all foreign currency assets, expenses and income in the scope of the interpretation initially recognised on or after the beginning of the reporting period an entity first applies the interpretation in or the beginning of a prior reporting period presented as comparative information.

 

Comment deadline and additional information

Comments on DI/2015/2 Foreign Currency Transactions and Advance Consideration are requested by 19 January 2016. Please click for:

 

IFRS Interpretations Committee publishes draft interpretation on accounting for uncertainties in income taxes

21 Oct 2015

The IASB’s IFRS Interpretations Committee has published a draft interpretation 'Uncertainty over Income Tax Treatments'. Comments are requested by 19 January 2016.

 

Background

The IFRS Interpretations Committee observed diversity in practice regarding the recognition and measurement of current tax, deferred tax liabilities and deferred tax assets as defined by paragraph 5 of IAS 12 Income Taxes, when there are uncertainties in the amount of income tax payable (recoverable). As a consequence, the Interpretations Committee decided to develop an interpretation.

 

Proposed guidance

Scope

The draft proposes that the interpretation be applied to the determination of taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates, when there is uncertainty over income tax treatments under IAS 12.

Issues

Whether tax treatments should be considered collectively

An entity is required to use judgement to determine whether each tax treatment should be considered independently or whether some tax treatments should be considered together. The decision should be based on which approach provides better predictions of the resolution of the uncertainty.

Assumptions for taxation authorities' examinations

An entity is to assume that a taxation authority with the right to examine any amounts reported to it will examine those amounts and will have full knowledge of all relevant information when doing so.

Determination of taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates

An entity has to consider whether it is probable that the relevant authority will accept each tax treatment, or group of tax treatments, that it used or plans to use in its income tax filing.

  • If the entity concludes that it is probable that a particular tax treatment is accepted, the entity has to determine taxable profit (tax loss), tax bases, unused tax losses, unused tax credits or tax rates consistently with the tax treatment included in its income tax filings.
  • If the entity concludes that it is not probable that a particular tax treatment is accepted, the entity has to use the most likely amount or the expected value of the tax treatment when determining taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates. The decision should be based on which method provides better predictions of the resolution of the uncertainty.

Effect of changes in facts and circumstances

An entity has to reassess its judgements and estimates if facts and circumstances change.

Disclosures

The draft interpretation does not contain any new disclosure requirements. Instead it highlights existing disclosure requirements in IAS 1, IAS 12 and IAS 37.

Transition

An entity has to apply the requirements by recognising the cumulative effect of initially applying them in retained earnings, or in other appropriate components of equity, at the start of the reporting period in which an entity first applies them, without adjusting comparative information. Full retrospective application is permitted, if an entity can do so without using hindsight.

 

Comment deadline and additional information

Comments on DI/2015/1 Uncertainty over Income Tax Treatments are requested by 19 January 2016. Please click for:

 

IFAC urges G20 to call for global adoption of IFRSs

21 Oct 2015

The International Federation of Accountants (IFAC) has submitted 12 recommendations for endorsement by the Group of Twenty (G20), urging action on issues impacting the G20 priorities of robust, inclusive growth.

In addition to an urgent assessment of the evolving regulatory environment, IFAC’s recommendations include that the G20 promote development and adoption of clear principles for high quality regulation, which, for financial information and financial reporting, includes globally consistent and effective regulation based on the global adoption and implementation of high-quality standards. Therefore, Recommendation 4 in the IFAC's letter reads:

Issue a clear call for the adoption and implementation, across all jurisdictions, of:

  • International Financial Reporting Standards;
  • International Standards on Auditing;
  • Auditor independence requirements set out in the Code of Ethics for Professional Accountants, issued by the International Ethics Standards Board for Accountants; and
  • International Public Sector Accounting Standards (IPSAS).

Please click to access the full letter and a corresponding press release on the IFAC website.

IASB tentatively decides on effective date of IFRS 16

20 Oct 2015

The IASB has just voted on the effective date of IFRS 16, the new standard on leases.

As recommended by the staff, the IASB voted for an effective date of 1 January 2019, with early application permitted but only if the entity is also applying IFRS 15 Revenue from contracts with customers.

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