Tom Scott appointed to the IASB

11 Jan 2017

The IFRS Foundation Trustees have announced the appointment of Tom Scott to serve as a member of the International Accounting Standards Board (IASB). Mr Scott will join the IASB in April 2017 for an initial term 5-year term.

Mr Scott has been an academic in the field of accounting at various universities in Canada since the late 1970s. Most recently, he acted as a Director and Professor of Accounting at the School of Accounting and Finance, University of Waterloo, Canada. He also served as a member of the Canadian Accounting Standards Board from 2003 to 2011.

Please click for the announcement on the IASB's website.

IFAC updates Policy Position Paper on enhancing organisational reporting

11 Jan 2017

The International Federation of Accountants (IFAC) has issued an updated version of its Policy Position Paper 8 on enhanced organisational reporting. The update emphasises IFAC's position that integrated reporting is the way to achieve a more coherent corporate reporting system, fulfilling the need for a single report that provides a fuller picture of organisations’ ability to create value over time.

While IFAC had originally maintained that there are a range of different organisational reporting frameworks and that it was important to examine the relationship between these frameworks, this position has now been modified and IFAC puts the International Integrated Reporting Council (IIRC) and the implementation of its Framework first claiming that integrated reporting is the key to enhanced organisational reporting. The paper states:

[T]he integrated report can be used as an “umbrella” report for an organization’s broad suite of reports and communications, enabling greater interconnectedness between different reports and recognizing that there is a range of different frameworks and regulations available, and under development.

The updated version of the paper also includes a new section that describes integrated reporting in more detail.

Please click for the following information on the IFAC website:

FRC believes the IFRS Foundation should remain in the UK

10 Jan 2017

As reported, the IFRS Foundation is seeking a new office location and had not excluded the possibility of moving overseas.

The UK Financial Reporting Council (FRC) has now responded to the Foundation’s call for tenders on relocation services and states that the UK is the most powerful centre of accounting expertise outside the US that offers the IFRS Foundation unique access to IFRS knowledge and experience. Therefore, the FRC concludes:

A move overseas for the IFRS Foundation would be counter-productive. It is logical for the Foundation to remain in the UK.

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

IASB posts update on insurance webinars

10 Jan 2017

In April and May 2016, the IASB posted a series of eight webinars on the forthcoming insurance contracts standard. Now a twenty minute update has been made available that reflects more recent decisions in the project.

The new webinar covers:

  • The need for change and the history of the project
  • Level of aggregation
  • Applying the Standard for the first time

Please click to access the update as well as all previous webinars on the IASB website.

Pre-meeting summaries for the January IASB meeting

09 Jan 2017

The International Accounting Standards Board (IASB) will meet at its offices in London on 18 January 2017. 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 summarise 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.

The first meeting for 2017 has a light agenda, with the IASB scheduled to meet in public only on Wednesday 18 January 2017.

The first session focuses on a post-implementation review of IFRS 13 Fair Value Measurement. The requirements in IFRS 13 are substantially the same as those in the FASB’s requirements, the two boards having worked to have converged standards. The staff is recommending that the IASB move ahead with a post-implementation review and that the Board should issue a request for information as part of that process.

The Board will continue its discussions from December 2016 on a possible amendment to IFRS 9 Financial Instruments in relation to symmetric prepayment options, to allow instruments with a prepayment options to qualify for amortised cost measurement. The staff are recommending that the Board proceed with an amendment.

The Board is currently preparing an exposure draft to clarify the difference between an accounting policy and a change in estimate. The staff will provide feedback on the testing of the proposed wording.

The Staff will also provide the IASB with a brief (ten minute) oral update on the insurance contracts project.

The Conceptual Framework session focuses on factors specific to initial measurement; the use of more than one measurement basis; and whether to confirm the proposals to update the references in Standards and Interpretations to the Conceptual Framework.

Our pre-meeting summaries are available on our January meeting note page and will be supplemented with our popular meeting notes after the meeting.

Two new IPSASB videos on adopting and implementing IPSASs

09 Jan 2017

The International Public Sector Accounting Standards Board (IPSASB) has issued two new videos as part of a series examining the challenges and benefits of governments adopting International Public Sector Accounting Standards (IPSASs) and accrual accounting.

In the video interviews, IPSASB members from different nations describe the process and share key details, timelines, and lessons learned in their jurisdictions in connection with the adoption of IPSAS. The two new videos are for Austria and Australia.

In 2015, the IPSASB had already published videos for South Africa, Panama, New Zealand, Switzerland, and Brazil.

All videos are available on the IPSASB website.

January 2017 IASB meeting agenda posted

06 Jan 2017

The IASB has posted the agenda for its next meeting, which will be held at its offices in London on 18 January 2017.

The Board will discuss the post-implementation review of IFRS 13, symmetric prepayment options related to IFRS 9, accounting policies/estimates and the Conceptual Framework.

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

SEC Chair states that high-quality, globally accepted accounting standards are a "U.S. Imperative"

06 Jan 2017

In a public statement on global accounting released on 5 January 2017, Mary Jo White, Chair of the United States Securities and Exchange Commission (SEC) stressed that the strength of the U.S. capital markets depended on investors knowing that they could rely on the financial information that is available to them when they make investment decisions. And since U.S. investors also made many investment decisions using IFRS financial statements, ensuring that IFRS, as well as U.S. GAAP, were of the highest quality was one of the Commission's "highest priorities".

While Ms White acknowledged that there had been no formal action by the Commission since 2010 and that any further action would be in the responsibility of the new SEC Chair Clayton, she nevertheless described the last years as a success:

Although the FASB and IASB have completed their agreed-upon, priority convergence projects, this milestone must not mark the end of the intense collaboration that has occurred between the two Boards over the last few years. These efforts have greatly enhanced the quality of accounting standards in a number of important areas, including recently narrowing many differences in the accounting standards for revenue recognition, leases, credit losses on financial instruments, and recognition and measurement of financial assets and liabilities.

She also noted that this progress was very important and that it needed to continue as both Boards, as well as investors, would benefit greatly from their sustained engagement. She concluded:

The United States cannot afford to be myopic about this issue in light of the benefits of these efforts for all stakeholders. Strong support of both the FASB and the IASB by U.S. investors, companies, auditors, and others, including the Commission, is essential. Indeed, it should be self-evident that the pursuit of high-quality globally accepted accounting standards is part of the SEC’s continuing responsibility to encourage, facilitate and direct efforts to enhance the quality of all financial reporting that directly impacts the protection of investors and the strength of our markets.

Please click to access the full statement on the SEC website

FASB clarifies the definition of a business

05 Jan 2017

The US Financial Accounting Standards Board (FASB) has issued Accounting Standards Update (ASU) 2017-01 'Clarifying the Definition of a Business', which provides guidance on evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses.

The ASU amends ASC 805 to “provide a more robust framework to use in determining when a set of assets and activities is a business.” In addition, the amendments “provide more consistency in applying the guidance, reduce the costs of application, and make the definition of a business more operable.”

The ASU discusses its divergence with IFRS:

The definition of a business in GAAP is currently identical to the definition in IFRS. However, the Board observed that although the definition is identical, it does not appear to be interpreted or applied consistently in practice between jurisdictions that apply GAAP and jurisdictions that apply IFRS. That is, stakeholders have said that in jurisdictions that apply IFRS, the definition of a business generally is not applied as broadly as it is in jurisdictions that apply GAAP. In response to concerns from its stakeholders about the complexity of the definition of a business, the IASB added a project on the definition of a business to its agenda and issued an Exposure Draft, Definition of a Business and Accounting for Previously Held Interests, which proposes similar amendments to those in this Update.

For more information, see the press release, ASU, and FASB in Focus newsletter on the FASB’s website.

ESMA publishes 20th enforcement decisions report

05 Jan 2017

The European Securities and Markets Authority (ESMA) has published further extracts from its confidential database of enforcement decisions taken by European national enforcers. This batch deals with decisions in relation to IFRS 7, IFRS 10, IFRS 12, IAS 1, IAS 8, IAS 12, IAS 16, IAS 17, IAS 32, IAS 36, IAS 37, IAS 38, IAS 39, and IFRIC 4.

The European national enforcers of financial information monitor and review financial statements published by issuers with securities traded on a regulated European market and who prepare their financial statements in accordance with International Financial Reporting Standards (IFRS) and consider whether they comply with IFRS and other applicable reporting requirements, including relevant national law.

ESMA has developed a confidential database of enforcement decisions taken by individual European enforcers as a source of information to foster appropriate application of IFRS.

The publication of enforcement decisions is designed to inform market participants about which accounting treatments European national enforcers may consider as complying with IFRS, i.e. whether the treatments are considered as being within the accepted range of those permitted by IFRS. ESMA considers the publication of the decisions, together with the rationale behind them, will contribute to a consistent application of IFRS in the European Union.

Topics covered in the latest batch of extracts, covering the period from March 2014 to June 2016, include:

Standard Topic
IFRS 7Financial Instruments: Disclosures Qualitative disclosures of the risks arising from financial instruments
IFRS 12 Disclosure of Interests in Other Entities Disclosure of significant judgements and assumptions in determining the existence of significant influence
IAS 36Impairment of Assets Disclosures relating to determination of value in use
IAS 39Financial Instruments: Recognition and Measurement Recognition of losses on loans upon conversion to shares
IAS 1Presentation of Financial Statements Presentation of equal and opposite gains and losses in the statement of profit or loss and other comprehensive income for the period
IAS 8Accounting Policies, Changes in Accounting Estimates and Errors
IAS 38Intangible Assets
Reclassification of capitalised milestone payments by a pharmaceutical company to the statement of profit or loss
IFRS 10Consolidated Financial Statements Legal requirements that prevent a shareholder from exercising its rights
IFRS 10Consolidated Financial Statements Determining whether an entity is an investment entity
IAS 16Property, Plant and Equipment Depreciation of vessels in the oil and gas industry
IAS 8Accounting Policies, Changes in Accounting Estimates and Errors
IAS 36Impairment of Assets
Application of value in use methodology in impairment testing
IAS 36Impairment of Assets
IAS 37Provisions, Contingent Liabilities and Contingent Assets
Recognition of onerous contract provisions
IAS 36Impairment of Assets Identification of cash-generating units
IAS 8Accounting Policies, Changes in Accounting Estimates and Errors
IAS 17Leases
IAS 32Financial Instruments: Presentation
IFRIC 4Determining whether an Arrangement contains a Lease
Purchase of a car fleet with an agreed buy-back agreement
IAS 12Income taxes Recognition of deferred tax assets for unused tax losses

Click for access to the full report (link to ESMA website). The ESMA has also published an updated overview of all enforcement decisions ever published.

Correction list for hyphenation

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