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November

Trustees update IFRS Foundation Constitution

30 Nov 2016

The Trustees of the IFRS Foundation have announced amendments to the IFRS Foundation Constitution. These amendments include the reduction of Board members from 16 to 14 and a reclassification of the geographical distribution of Board members and Trustees.

In July 2015, the Trustees began its review of the structure and effectiveness of the IFRS Foundation. The review focused on three strategic areas: (1) relevance of IFRS, (2) consistent application of IFRS, and (3) governance and financing of the IFRS Foundation. In June 2016, the Trustees completed its review and issued an exposure draft with the proposed amendments. After reviewing feedback on its amendments, the Trustees agreed in October 2016 to update the Constitution. The updated Constitution is effective on 1 December 2016.

For more information, see the press release and the updated Constitution on the IASB’s website.

Recent sustainability and integrated reporting developments

30 Nov 2016

A summary of recent developments at the IIRC and FEE.

The International Integrated Reporting Council (IIRC) has released the latest in its Creating Value series, Creating Value: The cyclical power of integrated thinking and reporting. The publication explores how integrated thinking is an integral component of integrated reporting. For organisations to truly adopt integrated reporting they need to embrace the concept of integrated thinking throughout the organisation. The publication also picks up on the release by the Italian Network for Business Reporting of a handbook on integrated thinking, giving step by step stages for companies to follow in order to 'make integrated thinking concrete and usable'. Please click for for the new creating value publication on the IIRC website and access to the handbook on integrated thinking.

The Federation of European Accountants (Fédération des Experts-comptables Européens, FEE) has released a publication providing practical guidance to companies that will have to comply for the first time with the EU Directive on the disclosure of non-financial and diversity information by certain large undertakings and groups. The publication applies the Directive’s requirements in a ‘mock-up’ management report of a fictional company in the food industry. This will especially help companies without prior experience in reporting on non-financial and diversity information. Please click to access Disclose what truly matters on the FEE website.

Françoise Flores appointed to the IASB

29 Nov 2016

The IFRS Foundation Trustees have announced the appointment of Françoise Flores to serve as a member of the International Accounting Standards Board (IASB). Ms Flores will join the IASB in January 2017 for an initial term ending 31 December 2021.

Ms Flores served as Chief Executive Officer of the European Financial Reporting Advisory Group (EFRAG) and Chairman of EFRAG’s Technical Expert Group (TEG) until April 2016. Most recently, she had returned to work as a partner at accountancy firm Mazars in Paris, France.

Please click for the announcement on the IASB website.

IFRS 9 published in Official Journal of the EU

29 Nov 2016

The European Union has published a Commission Regulation endorsing IFRS 9 'Financial Instruments', confirming the decision to adopt the standard announced last Friday.

Commission Regulation (EC) No 2016/2067 of 22 November 2016 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 29 November 2016 adopts IFRS 9 Financial Instruments. The EU effective date is the same as the IASB's effective date (annual periods beginning on or after 1 January 2018 with earlier appication permitted).

Please click to access the entry in the Official Journal (available in all official languages of the EU).

As a result of the EU's adoption, the EFRAG has updated its endorsement status report.

European Commission announces decision to adopt IFRS 9

25 Nov 2016

On 22 November, the International Financial Reporting Standard (IFRS) 9 on Financial Instruments was adopted into EU law. There is no entry in the Offical Journal yet, however, the European Commission (EC) communicated the decision by press release.

After a positive opinion by the Accounting Regulatory Committee on 27 June 2016 and after a 3 months scrutiny period by the European Parliament and the Council that ended on 7 October 2016, the Commission has completed the endorsement process of IFRS 9 Financial Instruments.

The decision was made public in the EC's Banking and finance newsletter and a press release on the EC's Company reporting website.

Two AASB papers for the upcoming ASAF meeting

25 Nov 2016

The Australian Accounting Standards Board (AASB) has published two papers that will be discussed by members during the upcoming meeting of the Accounting Standards Advisory Forum (ASAF) at the IASB's offices in London on 8 and 9 December 2016: one on digital currency and one on country-by-country reporting.

Digital currency – A case for standard setting activity recommends the IASB develop a standard that addresses the accounting for investments in intangible assets or other commodity type assets that are not financial instruments or inventory as the current alternatives to account for digital currencies (IAS 2 or IAS 38) do not provide relevant information to users of financial statements and as this issue highlights a broader issue with IFRSs in that there is no accounting standard that deals with investments in intangible assets or other commodity type assets that are not financial instruments or inventory. Please click to access the paper on the AASB website.

The second paper offers an update on the AASB approach to country-by-country reporting and argues that while much of the tax transparency initiative to date has been driven by the tax authorities, as part of remaining relevant in an ever-changing regulatory environment, it is timely for accounting standard-setters to take a leadership role in improving income tax disclosures for users of financial reports. Please click to access the paper on the AASB website.

EBA launches second impact assessment of IFRS 9 on banks

25 Nov 2016

The European Banking Authority (EBA) has launched a second impact assessment of IFRS 9 'Financial Instruments' on a sample of approximately 50 institutions across the European Union.

The second assessment builds on the on the results of the first exercise published on 10 November 2016. As announced, the EBA expects that institutions will be able to provide more detailed and accurate insights into their implementation of IFRS 9 as the information provided by the respondents in the first exercise reflected the early stage of implementation. The new exercise builds on the objectives of the first impact assessment, namely the estimated impact of IFRS 9 on regulatory own funds, the interaction between IFRS 9 and other prudential requirements, and the implementation issues relating to IFRS 9.

Please click for the press release on the EBA website.

IASB podcast on tentative decisions in the insurance project

24 Nov 2016

The IASB has released a podcast discussing the deliberations at the November 2016 IASB meeting on the issues that have arisen from the external testing of a draft of IFRS 17 'Insurance Contracts' and in the drafting process thus far.

During the insurance contracts session, the Board also decided to set the mandatory effective date for IFRS 17 as for annual periods beginning on or after 1 January 2021.

Please click to access the podcast (approx. 9 minutes long) on the IASB website.

Report on corporate governance policy in the European Union

24 Nov 2016

The CFA Institute, a global association of investment professionals, has published 'Corporate Governance Policy in the European Union: Through an Investor’s Lens'. The report identifies that investors believe there is still much that could be done in Europe to simplify mechanisms to enhance corporate accountability and realise maximum value from reforms that have already been undertaken.

The findings note that investors are open to many stakeholder issues, such as promoting board diversity, environmental reporting, or good corporate citizenship more generally. The 2013 Accounting Directive including provisions on country-by-country reporting for the extractive industries and the 2014 amendments to the Accounting Directive with its focus on nonfinancial statement disclosures, including information relating to ESG issues, sustainability, and disclosure of diversity policies, are cited as examples of the need for integrated reporting and for harmonising reporting and disclosure standards, including nonfinancial reporting.

Please click to access the full report on the CFA Institute website (includes access to abstract, full PDF, summary, and references).

Agenda for the November 2016 GPF meeting

23 Nov 2016

Representatives of the IASB will meet with the Global Preparers Forum (GPF) in London on Tuesday, 29 November 2016. The agenda for the meeting has been released.

The full agenda for the meeting is sum­marised below:

Tuesday, 29 November 2016 (13:00-16:30)

  • IASB and Interpretations Committee Update
  • Post-implementation Review of IFRS 13 Fair Value Measurement
  • Education Initiative commercial publications — possible improvements to the usefulness of
    • A Guide through IFRS Standards (the ‘Green Book’); and
    • A Briefing for Chief Executives, Audit Committees and Boards of Directors
  • Definition of a business

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

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