ESMA expands Q&A document on the implementation of its APM guidance

13 Jul 2017

In June 2015, the European Securities and Markets Authority (ESMA) published its final Guidelines on Alternative Performance Measures (APMs) for listed issuers that became effective in July 2016. Since then, ESMA has published several questions and answers on the guidelines to promote common supervisory approaches and practices in the implementation of them. Four new questions have now been added to the document.

The new questions on the guidelines provide information on the definition of APMs in the context of interim financial statements, on the prominence of APMs, and on the use of the “compliance by reference” principle as set out in the Guidelines.

Please click for the following additional information on the ESMA website:

ESMA issues report on the application of IFRS 13

12 Jul 2017

The European Securities and Markets Authority (ESMA) has issued a report, “Review of Fair Value Measurement in the IFRS Financial Statements.” The report provides an overview of the application of fair value measurement and disclosure requirements in IFRS 13, “Fair Value Measurements,” as applied by European issuers.

The review focused on four key topics, which included (1) fair value disclosures, (2) unit of account, (3) level of market activity and fair value, and (4) valuation adjustments for derivatives. The review found that the Standard has “generally been well incorporated in the financial statements of the issuers in the sample.” However, the report noted that compliance and comparability in the application of IFRS 13 could improve.

The results of this review will contribute to the IASB’s post-implementation review of IFRS 13.

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

EFRAG solicits literature review on possible effects of IFRS 9 on equity portfolios

12 Jul 2017

The European Financial Reporting Advisory Group (EFRAG) calls for an academic literature review on the effects of IFRS 9 'Financial Instruments' on long-term investment decisions.

EFRAG has already developed a questionnaire for European issuers on the same topic and now wants to support that impression with an academic perspective. The research goes back to a request of the European Commission.

More information is available on the EFRAG website. Proposals should be submitted to EFRAG by 15 September 2017.

AICPA issues proposed financial instruments disclosure framework

12 Jul 2017

As global accounting standards, as well as requirements promulgated by other standard-setting bodies, increasingly call for measurements and disclosures that comply with a defined measurement objective, the American Institute of Certified Public Accountants (AICPA) has issued a proposed disclosure framework for the valuation of financial instruments.

The purpose of the document is to provide a framework for the valuation professional when engaged or assigned to provide fair value and other measurements of financial instruments and components thereof. By design, the framework does not provide instructions on how to arrive at a valuation conclusion, but instead, the documents provide valuation professionals with guidance on the level of documentation and substantiation that is required when performing, reviewing or working with securities or financial instrument valuations.

Please click for more information on the AICPA website.

Pre-meeting summaries for the July IASB meeting

12 Jul 2017

The IASB will meet at its offices in London on 18–19 July 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.

There are nine topics on the agenda.

Tuesday 18 June

The meeting starts in the afternoon with feedback on outreach the IASB staff have undertaken with investors and analysts in relation to the recently issued IFRS 17 Insurance Contracts.

The Board will discuss feedback on two of the proposed amendments included in the Annual Improvements to IFRS Standards 2015–2017 Cycle related to IAS 12 Income Taxes and IAS 23 Borrowing Costs. They will also discuss a possible amendment to IFRIC 14 IAS 19—The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction.

The day finishes with a session on Disclosure Initiative: Materiality Practice Statement. The staff are responding to comments received as a result of an external review of the draft practice statement. This session was originally scheduled for discussion in June.

Wednesday 19 June

The morning session is devoted to the proposed amendment to IFRS 9 on prepayment features with negative compensation. The Board will continue to discuss the feedback from comment letters. The staff are asking the Board to finalise the amendments, but with an effective date of 1 January 2019, rather than the originally proposed 1 January 2018, with earlier application permitted.

In the afternoon the Board will continue its discussions on rate-regulated activities, focusing on control and matching; and recognition and uncertainty.

The meeting concludes with another education session on possible revisions to the assessment of goodwill impairment, mainly focusing on feedback from outreach.

More information

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

EFRAG seeks TEG applicants

10 Jul 2017

The European Financial Reporting Advisory Group (EFRAG) is calling for candidates for its Technical Expert Group (TEG).

The present mandate period of eight of the sixteen EFRAG TEG members expires on 31 March 2018 with six of the eight eligible for reappointment while two have reach their maximum term limits. The EFRAG is looking for a candidates from a wide range of backgrounds and geographic origins and prefers all candidates’ submissions to occur by 9 October 2017.

For more information, see the press release on the EFRAG’s Web site.

XRB issues research report on APMs

10 Jul 2017

The New Zealand External Reporting Board (XRB) has released a research report on findings from a survey which examined how alternative performance measures (APMs) are viewed by users in New Zealand.

The report included the following survey results:

  • Most surveyed believe APMs are useful for assessing a company’s performance as a supplement to GAAP measures.
  • Explanations on APMs used are critical in understanding the APMs and its relationship to GAAP measures.
  • Some respondents did not agree with the choice of certain APMs.
  • Re­spon­dents prefer to have clear and standardized definitions applied to APMs.
  • Some respondents are skeptical in the application of APMs since they may have a tendency to portray more favorable results when compared against the GAAP measures.
  • Majority of respondents feel that APMs should be assured.

For more information, see the report summary and full report on the XRB's Web site.

July 2017 IASB meeting agenda posted

08 Jul 2017

The IASB has posted the agenda for its next meeting, which will be held at its offices in London on 18 and 19 July 2017. There are six topics on the agenda.

The Board will discuss the following:

  • Insurance contracts
  • IFRS implementation issues
  • Disclosure initiative: Materiality practice statement
  • IFRS 9 - Prepayment features with negative compensation and modification of liabilities
  • Rate-reg­u­lated ac­tiv­i­ties (education session)
  • Goodwill and impairment (education session)

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.

EFRAG, EFFAS, IASB, AIAF and OIC joint event on disclosure, goodwill and insurance contracts

07 Jul 2017

The European Financial Reporting Advisory Group (EFRAG), the European Federation of Financial Analysts Societies (EFFAS), the International Accounting Standards Board® (IASB), the Associazione Italiana degli Analisti e Consulenti Finanziari (AIAF) and the Organismo Italiano di Contabilità (OIC) will host a joint event on 18 September 2017 in Milan, Italy, which will feature discussions related to IASB's Discussion Paper, "Disclosure Initiative — Principles of Disclosure," EFRAG's Discussion Paper, "Goodwill and Impairment Test: Can it be improved?" and IFRS 17, "Insurance Contracts."

For more in­for­ma­tion, see the press release on the EFRAG’s website.

Agenda for the July 2017 ASAF meeting updated

06 Jul 2017

The International Accounting Standards Board (IASB) has released an updated agenda for the meeting of the Accounting Standards Advisory Forum (ASAF), which is to be held at the IASB's offices in London on 6-7 July 2017. Changes include moving the (1) improvements to IFRS 8 session to Friday, (2) post-implementation review of IFRS 13 to Thursday, and (3) altering the time of discussions for Friday’s sessions on wider corporate reporting, rate-regulated activities, and property, plant and equipment.

The updated agenda for the meeting is sum­marised below:

Thursday, 6 July 2017 (9:15-17:30)

  • Dis­clo­sure ini­tia­tive — Prin­ci­ples of dis­clo­sure — Dis­cus­sions related to the proposals in the dis­cus­sion paper
  • Goodwill and im­pair­ment — Dis­cus­sions on the ASBJ’s research paper, ‘Too little, too late,’ as well as feedback from Global Preparers Forum
  • IAS 8 — Accounting policy changes resulting from agenda decisions
  • Post-im­ple­men­ta­tion review of IFRS 13 — Gather pre­lim­i­nary feedback on the Request for In­for­ma­tion
  • Primary Financial State­ments — Gather views on the certain tentative decisions

Friday, 7 July 2017 (9:00-13:45)

  • Wider corporate reporting — Overview on wider corporate reporting and whether to consider an update to Practice Statement Man­age­ment Com­men­tary
  • Im­prove­ments to IFRS 8 Operating Segments (Proposed amend­ments to IFRS 8 and IAS 34) — Discuss views from ASAF members and preparers on four proposed amend­ments to IFRS 8 and IAS 34
  • Rate-reg­u­lated ac­tiv­i­ties — Dis­cus­sions on the proposed accounting model
  • Property, plant and equipment: Proceeds before intended use (proposed amend­ments to IAS 16) — Dis­cus­sions on the upcoming exposure draft
  • Project updates and agenda planning

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

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