Report from spring 2017 IFASS meeting

04 May 2017

A report has been issued summarising the discussions at the meeting of the International Forum of Accounting Standard Setters (IFASS) held in Taipei on 2 and 3 March 2017.

As reported earlier, the core topic of the meeting was consistent application of IFRSs across jurisdictions, including the meaning of "consistent application" and what the IASB and the national standard-setters can do to support it. Please see our detailed summary of that discusssion.

The IFASS members also discussed:

  • Implementing “big” standards (presented by Marc Siegel and Cullen Walsh of the FASB);
  • Treatment of income tax on distribution of dividends (presented by Shiwaji Bhikaji Zaware and Vijay Kumar Muthu Raju Paravasa Raju of the Institute of Chartered Accountants of India);
  • Accounting for the effects of high inflation (presented by Felipe Pérez Cervantes of the Mexican Financial Reporting Standards Board);
  • Research: What should Standard setters address? (with presentations by Professor Guochang Zhang (Hong Kong University), EFRAG and MASB, the IFASS Not-for-profit working group, AASB, as well as ANC and ASBJ); and
  • Case studies on IFRS 15 and IAS 37 (presented by the IASB).

The next meeting of the IFASS will take place in London on 26 and 27 September 2017. The forum accepted the Indian delegation’s invitation to hold the spring meeting 2018 in Mumbai (Republic of India) on 12. and 13. April 2018.

Please click for the full report from the meeting.

EFRAG draft comment letter on proposed amendments to IFRS 9 regarding the classification of certain prepayable financial assets

04 May 2017

The European Financial Reporting Advisory Group (EFRAG) has issued a draft comment letter on the IASB exposure draft ED/2017/3 'Prepayment Features with Negative Compensation (Proposed amendments to IFRS 9)'.

In its draft comment letter, EFRAG welcomes the IASB addressing the concerns related to prepayment features with negative compensation. However, EFRAG is of the view that prepayment features with negative compensation should be subject to the same eligibility conditions as prepayment features with positive compensation; therefore, EFRAG disagrees with the criterion that states that the fair value of the prepayment feature should be insignificant at initial recognition.

In order to minimise any disruption to the implementation efforts already undertaken by preparers and users, EFRAG requests the IASB to do its utmost to finalise the amendments as soon as possible and to ensure they are limited to what is strictly necessary to address the issue submitted to the IFRS Interpretations Committee. EFRAG also recommends that the IASB include an effective date of 1 January 2019, with early application permitted, rather than the date proposed in the amendments.

Comments on EFRAG's draft comment letter are requested by 17 May 2017. For more information, see the press release and the draft comment letter on the EFRAG website.

Recent sustainability and integrated reporting developments

04 May 2017

A summary of recent developments at the Accountancy Europe, the Securities Commission Malaysia, and GRI.

Three years after publication of the International Integrated Reporting Framework, the International Integrated Reporting Council (IIRC) launched a two-month consultation to gauge businesses' views on the implementation of the framework, to inform on further development. Accountancy Europe has now responded to the consultation and also points out major barriers:

  • That quality and relevance of the information in integrated reports need to be improved;
  • that it needs to be explored how an integrated report conforms with other reports;
  • that the cost to prepare an integrated report is a challenge to SMEs; and
  • that the framework focuses on reporting from the perspective of investors and thus the wider stakeholder base has diffculties applying it.

The full comment letter is available on the Accountancy Europe website.

Malaysian companies are being called on to adopt integrated reporting, as part of the Malaysian Corporate Governance Code launched recently by the Securities Commission Malaysia. More information is available here.

The Global Reporting Initiative (GRI) is currently seeking senior individuals of integrity and high reputation to join the following committees for a term of 3 years, from 1 January 2018: GRI Board of Directors; Global Sustainability Standards Board; Stakeholder Council; and Independent Appointments Committee. More information is available on the GRI website.

First GRI Standards translations have been launched in Japanese and Spanish. Please see these two GRI website: Japanese translations and Spanish translations.

New SEC chairman confirmed by US Senate

03 May 2017

The United States Senate has confirmed Walter J. "Jay" Clayton III, a former Wall Street lawyer, as the new chairman of the SEC.

Mr Clayton was nominated by then-President-elect Donald Trump on 4 January 2017. Mr Clayton replaces acting chairman Michael Piwowar, who has led the SEC since previous chair Mary Jo White’s resignation became effective in January 2017. Mr Clayton’s term will end on 5 June 2021.

Mr Clayton was sworn in on 4 May 2017 by US Supreme Court Justice Anthony M. Kennedy, officially becoming the 32nd Chairman of the SEC.

For more information, see the press release on the SEC's website.

IFRS Interpretations Committee holds May 2017 meeting

03 May 2017

The IFRS Interpretations Committee met via video conference call on Wednesday 3 May 2017. We have posted Deloitte observer notes for the technical issues discussed during this meeting.

Please click through for the notes relating to the following issues:

The preliminary and unofficial notes taken by Deloitte observers for the entire meeting are also available.

IFRS Foundation updates its pocket guide to IFRS

03 May 2017

The IFRS Foundation has published the 2017 version of 'Pocket Guide to IFRS Standards: the global financial reporting language'. The guide provides an overview of the adoption of IFRS in 150 countries and other jurisdictions around the world.

The Pocket Guide to IFRS Standards: the global financial reporting language can be downloaded free of charge from the IASB's website. For more information, see the press release on the IASB's website.

Japan updates list of 'designated' IFRSs

03 May 2017

The Financial Services Agency (FSA) of Japan has announced that additional IFRSs issued up until 31 December 2016 were designated for use by companies voluntarily applying IFRSs in Japan.

Among the newly designated IFRS is also IFRIC 22 Foreign Currency Transactions and Advance Consideration issued by the IASB in December 2016.

For more information, see the press release (in Japanese only) on the FSA website.

FRC Financial Reporting Lab publishes framework for future digital reporting

02 May 2017

The Financial Reporting Lab of the UK Financial Reporting Council (FRC) has released a report setting out a framework for future digital reporting. The report expresses the views of a wide range of preparers, investors and others on the characteristics that they would like to see in any future (digitally enabled) system of corporate reporting.

The report identifies three stages of reporting: production, distribution, and consumption. For each of the stages characteristics of future digital reporting are then identified and explained. Thus production should be cost-efficient, easy, compatible and timely; distribution should be free, prompt, compliant, and accessible; and consumption should be contextual, usable, credible, and engaging.

In the next phase of the project, the Lab will assess the extent to which technologies such as virtual reality, augmented reality, blockchain, XBRL, video, and other digital media fit the framework.

Please click to download the publication from the FRC's website: Digital Future - A framework for future digital reporting.

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