November

ASBJ continues short discussion paper series

12 Nov 2015

The Accounting Standards Board of Japan (ASBJ) has published the second issue of a new series of short discussion papers intended to contribute to the global discussion around financial reporting standards. Issue No.2 is entitled 'Recognition Criteria in the Conceptual Framework'.

The ASBJ publishes the paper as a contribution to the global debate about the recognition criteria in the Conceptual Framework. In the paper, the ASBJ analyses the need for a probability criterion. The ASBJ concludes that a robust description of such a criterion would be necessary while the use of the critrion is not always necessary. In particular, the ASBJ believes that:

  • for the recognition of an asset or a liability that reflects a right or an obligation that results from a transaction, it is not necessary to apply a probability criterion;
  • for the recognition of an asset or a liability that reflects a right or an obligation that results from other events, it will be necessary to apply a probability criterion.

Please click to access the discussion paper on the ASBJ website. The first paper in the series, entitled 'Is OCI Unnecessary?' was published in May 2014.

Pre-meeting-summaries for the November IASB meeting

12 Nov 2015

The International Accounting Standards Board (IASB) will meet at its offices in London on 18–19 November 2015. We have posted our pre-meeting summaries for the meeting that allow you to follow the IASB’s decision making more closely. For each topic to be discussed we summarised the agenda papers made available by the IASB staff and point out the main issues to be discussed by the IASB and the staff recommendations.

Check out the summaries for the forthcoming discussions on fair value measurement, post-employment benefits, goodwill and impairment, insurance contracts, the research project on share-based payment, and IFRS implementation issues. We have added them to our meeting note page and will supplement them with our popular meeting notes after the meeting.

TRG discusses implementation of new revenue standard

11 Nov 2015

At its 9 November 2015, meeting, the FASB’s and IASB’s joint revenue transition resource group (TRG) discussed potential issues related to implementing the boards’ new revenue standard.

Topics dis­cussed at the meeting in­cluded:

  • Customer options for additional goods and services.
  • Pre-production activities.
  • Licenses — Specific application issues related to restrictions and renewals.
  • Whether fixed-odds wagering contracts are inside or outside the scope of ASC 606.

For more in­for­ma­tion, see De­loitte’s TRG Snap­shot.

IASB to host live web presentation on the proposed practice statement on materiality

11 Nov 2015

On 19 November 2015, the International Accounting Standards Board (IASB) will give a live web presentation on Exposure Draft (ED) of the IFRS Practice Statement, “Application of Materiality to Financial Statements.”

The pre­sen­ta­tion will include an overview of the ED and a question and answer session. It will start at 10:00 GMT time and will last ap­prox­i­mately 45 minutes. For more in­for­ma­tion, including how to reg­is­ter, see the IASB's website.

November 2015 IFRS Interpretations Committee meeting notes posted — Part 2 (concluded)

11 Nov 2015

The IFRS Interpretations Committee met in London on 10–11 November 2015. We've posted the Deloitte observer notes for the sessions on the definition of a business, IAS 20, IAS, 36, the agenda consultation, IAS 32, IAS 39, IFRIC 12, and the work in progress.

November 2015 IFRS Interpretations Committee meeting notes posted — Part 1

10 Nov 2015

The IFRS Interpretations Committee met in London on 10–11 November 2015. We've posted the Deloitte observer notes for the sessions on IAS 16/IAS 38/IFRIC 12, IFRS 9/IAS 39, IFRS 9/IAS 28, IAS 2, and IAS 12.

EFRAG "not in a position to amend" its endorsement advice on IFRS 9

10 Nov 2015

In September 2015, the European Financial Reporting Advisory Group (EFRAG) finalised the long-awaited endorsement advice on IFRS 9 ‘Financial Instruments’ and recommended endorsement of IFRS 9, but withheld comments on insurance industry.

In its endorsement advice, EFRAG committed to sending an update on the IASB's progress in addressing concerns relevant to the insurance industry. A draft letter to be send to the European Commission has now been made available on the EFRAG website. EFRAG notes that the IASB has decided to propose a deferral approach and an overlay approach, both aimed at addressing the mismatch, in December this year, but states:

The IASB is progressing options to address the issues facing the insurance industry. However, as of the date of this letter, we are not in a position to amend our recommendation that “all businesses other than those carrying out insurance activities are required to account for their financial instruments in compliance with IFRS 9 in 2018 and businesses carrying out insurance activities are permitted to do so in compliance with IFRS 9 from the same date”.

EFRAG explains that any final decisions in the project will be made at the earliest in six to nine months from now and that uncertainty exists as to whether the IASB will provide an appropriate remedy when it makes these final decisions:

EFRAG assesses, on a very preliminary basis, that the IFRS 4 amendments, if finalised on the basis of current IASB tentative decisions, would not allow EFRAG to lift the reservations included in its endorsement advice of IFRS 9.

Please click to access the draft letter on the EFRAG website. Comments are requested by 20 November 2015 as the intention is to finalise the letter during the meeting of the EFRAG Board on 24 November 2015.

IOSCO reports on transparency of firms that audit public companies

09 Nov 2015

IOSCO has published a final report, “Transparency of Firms That Audit Public Companies.”

The final report discusses “audit firm transparency reporting,” which is a practice “employed by audit firms to be transparent in their own reporting to investors and other stakeholders about the firm itself, notably, with respect to firm governance and elements of their system of quality control for their financial statement audits.”

According to the final report, an au­dit firm trans­parency re­port should contain in­for­ma­tion that is:

  • “[C]lear, use­ful and pre­sented in suf­fi­cient de­tail to be mean­ing­ful to the dif­fer­ent groups of likely users of the re­port.”
  • “[F]act-based and not po­ten­tially mis­lead­ing.”
  • “[U]n­bi­ased and not ori­ented to­ward mar­ket­ing or sell­ing ser­vices.”
  • “[C]on­cise, spe­cific to the firm and avoids the use of boil­er­plate lan­guage.”
  • “[T]imely, ac­cu­rate and com­plete.”
  • “[B]al­anced in com­mu­ni­cat­ing the au­dit firm’s out­put mea­sures of au­dit qual­ity in ad­di­tion to any in­put mea­sures.”
  • “[S]uf­fi­cient in terms of ex­plain­ing the lim­i­ta­tions of the in­di­ca­tors of au­dit qual­ity, in­clud­ing that the in­di­ca­tors may not be com­pa­ra­ble across au­dit firms.”

For more information, see the press release and final report on IOSCO’s Web site.

EFRAG finalises consultation document on the IASB Exposure Draft of a new Conceptual Framework

09 Nov 2015

In July 2015, the European Financial Reporting Advisory Group (EFRAG) published a 'consultation paper' rather than a 'draft comment letter' on the proposed new Conceptual Framework for Financial Reporting as EFRAG had not fully concluded on its preliminary views. The consultation document with preliminary views has now been finalised.

The finalised perliminary views only differ slightly from the position published in July. These changes concern the position on stewardship and on users of general purpose financial statements. EFRAG has published a document explaning the changed position, which can be downloaded from the EFRAG website.

Given it took EFRAG four months to finilase its preliminary views after publishing the first consultation document, the deadline for submitting comments on EFRAG's final preliminary position is now very short. Comments are requested by 18 November 2015. Please click for the press release on the EFRAG website.

November 2015 IASB meeting agenda posted

06 Nov 2015

The IASB has posted the agenda for its next meeting, which will be held at its offices in London on 18–19 November 2015.

The most sig­nif­i­cant items on the agenda include:

  • Insurance contracts — Similarities and differences between the general measurement model and the variable fee approach for insurance contracts as well as three narrow issues arising from the variable fee approach will be considered.
  • Goodwill and impairment — Identification and measurement of intangible assets in a business combination will be discussed.

In addition, the IASB will discuss fair value measurements, post-employment benefits, IFRS implementation issues, and the research project on share-based payment.

The full agenda for the meeting can be found here. We will post any updates to the agenda, as well as our Deloitte observer notes from the meeting, on this page as they become available.

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