The FRC calls on the IASB to reconsider its proposed Conceptual Framework so that it properly reflects the importance of stewardship, prudence and reliability, which it considers to be fundamental to financial reporting. The FRC stresses that prudence is more than taking a cautious approach to accounting. Rather prudence requires a greater readiness to recognise losses than profits:

The reintroduction to the Conceptual Framework of a specific reference to prudence is very welcome. However, the treatment of it in the Exposure Draft — as support for the idea of neutrality — is wholly inadequate. The essence of prudence is the idea referred to in the Basis for Conclusions as ‘asymmetric prudence’ — a lower threshold for the recognition of liabilities and losses than for assets and gains — which is absent from the text of the draft Conceptual Framework itself.

The FRC adds that the term 'neutrality' that is used in the framework might be misleading and suggests it should be replaced 'unbiased'.

Finally, the FRC notes that it is "particularly odd" that the IASB acknowledges that the concept of asymmetric prudence is reflected in current accounting standards (for example in IFRS 15), but has omitted it from its draft Framework.

Please click to access the full comment letter and a corresponsing press release on the FRC website.

In our comment letter on ED/2015/3, we note that we think further improvements are necessary before the revised Conceptual Framework is issued. Please click to access the full comment letter.

In our comment letter on ED/2015/4, we agree with the proposed amendments to reference to the Conceptual Framework and with the Board’s proposed means of transition. Please click to access the full comment letter.

Specifically, Mr Finnegan discussed:

• “the IASB’s current Agenda Consultation;
• where the IASB stands on previously identified investor priorities, such as financial statement presentation and disclosures; and
• how other corporate reporting initiatives and technology are influencing the IASB’s strategy and agenda-setting process.”

The webcast is available on the CFA Institute’s website.

The project uses the different terms of 'likelihood' that are used in IFRSs to trace the influences of cultural background and translation. The key findings arrived at so far are:

• There are differences in interpretation of the terms between Australian and Korean accounting professionals when used in context and not in context.
• Some terms are interpreted differently in different contexts.
• Some terms some terms are not interpreted differently from each other.
• Some terms are interpreted differently in different languages by Korean accounting professionals indicating that there may be a translation issue that should be addressed.
• Some terms cannot even be translated into Korean or are translated into a single Korean term even when the IASB uses different terms.

Based on these findings, the two standard-setters make several recommendations that would apply to the IASB as follows:

• The IASB should give considerable attention to how terms might be interpreted and translated in different jurisdictions when developing a standard.
• The IASB should narrow the number of different terms used in standards and consideration should be given to establishing a set of terms that can only be departed from in exceptional cases.
• If a set of ‘accepted’ terms were to be developed, the process should include consulting with specialist linguists who have familiarity with IFRS.
• Standard-setting outreach and consultative processes should explicitly seek to obtain input on translation and interpretation issues in different jurisdictions.

As reported earlier, translation issues are a recurring motif in connection with the use of IFRSs around the word. In 2011, the Institute of Chartered Accountants of Scotland (ICAS) published a study that arrived at the conclusion that translation is not impossible, but exact equivalence is - which is something every standard-setter and regulator needs to be aware of.

Please click to access the AASB/KASB study (which is still a work in progress) as submitted for the ASAF meeting on the IASB website.

The hearing (from 15:00 to 16:30) will see presentations by invited experts followed by a discussion between ECON members and the experts. The hearing will be webstreamed on http://europarltv.europa.eu.

The ECON is currently paying close attention to IFRS 9 and its possible endorsement. Only recently, the Committee commissioned four studies on the standard.

The open letter published yesterday on the A4S website notes that professional accountants can help to address climate change, as accounting is central to decision-making and professional accountants can provide relevant analysis, reporting and assurance to help organisations generate and preserve value, and can therefore be influential in driving sustainable behaviours. In order to do so, however, it is essential that world leaders agree a common framework. The open letter therefore states:

Please click to access the open letter and the corresponding press release on the A4S website.

A joint statement, available on the IASB's website, contains the following key features:

• The IFRS Foundation and the Chinese Ministry of Finance will establish a joint working group to advance the use of IFRS within China, especially for internationally oriented Chinese companies.
• Both parties support the vision of Chinese Accounting Standards to become fully converged with IFRS Standards.
• Both parties will encourage continued co-operation between the IASB and Chinese stakeholders in the future development of IFRS Standards.

Please click to access the press release on the IASB website.

Commission Regulation (EC) No 2015/2113 of 23 November 2015 amending Regulation (EC) No 1126/2008 adopting certain international accounting standards in accordance with Regulation (EC) No 1606/2002 of the European Parliament and of the Council published in the Official Journal on 24 November 2015 adopts Agriculture: Bearer Plants (Amendments to IAS 16 and IAS 41) issued by the IASB in June 2014. The EU effective date is the same as the IASB's effective date (annual periods beginning on or after 1 January 2016 with earlier appication permitted).