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2015

Accounting bodies call upon world leaders to put in place a sustainability framework

24 Nov 2015

The Accounting Bodies Network (ABN), established by the Prince of Wales' Accounting for Sustainability project (A4S), is calling on world leaders ahead of the COP 21 Climate Change meeting in Paris to put in place a framework that will enable investors to make informed decisions that will support the goal of a sustainable future.

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:

We urge governments to:

  1. Commit to an agreement in Paris that provides a clear signal that governments will act to achieve a low carbon, sustainable future 
  2. Put in place a framework that sets out necessary government actions, reduces uncertainty and enables investors, businesses and others to make informed decisions that are consistent with this aim.

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

Joint working group agreed to advance the use of IFRS in China

24 Nov 2015

The IFRS Foundation and the Chinese Ministry of Finance have announced that they will work together to explore possibilities to advance the use of IFRS within China.

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.

European Union formally adopts amendments to IAS 16 and IAS 41

24 Nov 2015

The European Union has published a Commission Regulation endorsing 'Agriculture: Bearer Plants (Amendments to IAS 16 and IAS 41)'.

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).

Agenda for the December 2015 ASAF meeting

24 Nov 2015

The International Accounting Standards Board (IASB) has released an agenda for the meeting of the Accounting Standards Advisory Forum (ASAF), which is to be held at the IASB's offices in London on 7-8 December 2015.

The agenda for the meeting is summarised below:

Monday, 7 December 2015 (9:30-17:30)

  • AASB/KASB joint research project on IFRS implementation — Accounting judgments on terms of likelihood in IFRS: Korea and Australia
  • Disclosure initiative — Materiality practice statement
    • ASAF members’ preliminary views on the exposure draft
    • if and how ASAF members plan to implement the practice statement in their region
  • Conceptual Framework — recognition criteria in the Conceptual Framework
  • Post-employment benefits — possible approaches that might address the issue of hybrid plans
  • Goodwill and impairment — ASAF members’ views on the IASB’s initial discussions at its meetings in October 2015 and November 2015
  • Different effective dates of IFRS 9 and the new standard on insurance contracts
    • explanation of the overlay approach and request for ASAF members’ views on that approach
    • how ASAF members can support the project outreach


Tuesday, 8 December 2015 (9:00-15:00)

  • Business combinations under common control (BCUCC)
    • HKICPA paper on how BCUCC have been accounted for in Hong Kong and presentation on Hong Kong investor analysts' views on what information is useful when a BCUCC takes place
    • ASAF members’ views on how predecessor method should be applied when a BCUCC takes place
  • Role of post-implementation reviews — ASAF members' views on the PiR process, its benefits and possible improvements
  • Disclosure initiative — next steps
  • Equity Method — EFRAG is seeking the ASAF’s view on the proposed scope of the equity method project
  • Project updates and agenda planning
    • Primary financial statements
    • Changes in accounting policies

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

IASB updates work plan

23 Nov 2015

Following its November 2015 meeting, the IASB has updated its work plan. As mentioned before, directly tracing the Board's progress on the individual projects has become impossible since the change of the work plan format in July, unless the Board makes definite progress or has to make larger corrections. Of these, a few can be identified in the November work plan.

On major projects, the Board notes no changes, which means that for all of these projects the next project steps may or may not have been pushed back by one month since the last work plan update.

Updates regarding the implementation projects are several:

Regarding interpretations, the projects on uncertainty over income tax treatment and foreign currency transactions and advance considerationwill now see decisions on the project direction within three months (was within six months).

Finally, two research projects have been updated:

The revised IASB work plan is available on the IASB's website.

ACCA interview with IASB Chairman Hans Hoogervorst

23 Nov 2015

The Association of Chartered Certified Accountants (ACCA) has made available a short recorded interview with IASB Chairman Hans Hoogervorst entitled 'IASB takes stock'.

In the interview, Mr Hoogervorst generally takes stock and then expands on four questions:

  • Has the Board's private, not-for-profit status been a hindrance or a help?
  • Who are IFRS for?
  • How do you think the Board's due process has been working?
  • What's next for the IASB?

Please click to access the interview, which runs slightly over five minutes, on the ACCA website.

FEE calls for an international solution of the effective date problem

21 Nov 2015

The Federation of European Accountants (Fédération des Experts-comptables Européens, FEE) has commented on the draft letter from the European Financial Reporting Advisory Group (EFRAG) to the European Commission supplementing its endorsement advice on adoption of IFRS 9 'Financial Instruments'.

Just as the European Securities and Markets Authority (ESMA) yesterday, FEE believes the problem should not be solved on a European level alone (by means of a carve-out). On 10 November 2015, EFRAG published a draft letter to the European Commission, stating that EFRAG is "not in a position to amend" its endorsement advice on IFRS 9 and extend it to businesses carrying out insurance activities.

FEE point out that the problem does not only affects European companies, therefore an international solution needs to be found - as the IASB is trying to do in its dedicated limited scope project. However, FEE notes in its letter that the approaches the IASB is pursuing are of different merit. FEE believes that the deferral approach should be chosen over the overlay approach as the latter was too complex. However, FEE also points out that the deferral approach needs to be investigated further as the current requirement of passing an insurance activities’ predominance test at the reporting entity level would mean that some insurers and more generally the insurance activities included in the financial statements of banking groups would not qualify. FEE suggests finding a deferral solution that goes below the reporting entity level or to widen the scope of the solution by reconsidering the predominance test for insurance activities.

Please click to access the full comment letter on the FEE website.

ESMA believes IFRS 9 carve-out for insurance activities "not a feasible solution"

20 Nov 2015

The European Securities and Markets Authority (ESMA) has commented on the draft letter from the European Financial Reporting Advisory Group (EFRAG) to the European Commission supplementing its endorsement advice on adoption of IFRS 9 'Financial Instruments'.

On 10 November 2015, EFRAG published a draft letter to the European Commission, stating that EFRAG is "not in a position to amend" its endorsement advice on IFRS 9 although the IASB has decided to propose a deferral approach and an overlay approach, both aimed at addressing the mismatch, in December this year. EFRAG argued 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.

In its letter to EFRAG, ESMA emphasises the importance of fully implementing IFRS 9 and of applying the expected loss model to financial assets in a timely manner, as the introduction of the expected loss model responds to an important G20 request following the financial crisis. Even though final amendments to IFRS 4 adressing the mismatch are not to be expected until mid-2016, ESMA highlights that the IASB responded quickly and adequately to EFRAG’s concerns about the different application dates. ESMA states:

ESMA reiterates its position that a European carve-out is not a feasible solution for insurance activities in light of their global nature. [...] In light of the solution for the insurance industry being developed by the IASB, ESMA is of the view that EFRAG should enable endorsement of IFRS 9 in the EU as soon as possible.

Please click for access to the full comment letter on the ESMA website.

Summary of the October 2015 ITCG meeting

20 Nov 2015

The IASB has published notes to the IFRS Taxonomy Consultative Group (ITCG) meeting held on 27 October 2015.

The ITCG discussed:

For more information, see the meeting notes on the IASB website.

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