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Pre-meeting summaries for the October IASB meeting

16 Oct 2018

The IASB will meet on Wednesday 24 and Thursday 25 October 2018. 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 Wednesday sessions start with the Primary Financial Statements project. The focus is on the labels the Board will use to describe subtotals. The staff are recommending that the labels be operating profit or loss; operating profit or loss and share of profit or loss of integral associates and joint ventures; and profit or loss before financing and income tax (with entities being prohibited from using the term ‘EBIT’ for this subtotal).

On Implementation, the IASB will consider a recommendation by the IFRS Interpretations Committee that the IASB amend IAS 12 Income Taxes in relation to the initial recognition of a lease, by a lessee, and decommissioning obligations. 

The staff will give an oral update on the Management Commentary project.

The staff will present a proposal to revise the Preface to International Financial Reporting Standards, removing redundant material on the structure of the IASB and its due process requirements.

For the Disclosure Initiative, the focus is on accounting policies. The staff recommend that the Board clarify that not all accounting policies relating to material transactions, other events or conditions are material. They also recommend that the Board develop guidance and examples for inclusion in the Materiality Practice Statement to help entities apply effective judgement when deciding whether accounting policies are material.

The Board will discuss IFRS 17 Insurance Contracts, to help it determine how it should respond to concerns that have been brought to its attention regarding this Standard (the papers include a description of 25 identified concerns). The staff have developed criteria for the Board to apply in assessing whether, in each case, it should propose an amendment to IFRS 17. We do not expect the Board to make any decisions about specific issues at this meeting.

On Thursday the staff will give an update on the Rate-regulated Activities project.

The meeting concludes with a session on Goodwill and Impairment. The staff present their proposed outline for a Discussion Paper. The main sections would focus on improving disclosures, simplifying the impairment test, and simplifying the accounting for goodwill. The staff are asking the Board to reconsider its earlier decisions not to pursue some ideas around improvements to the impairment test. The Board has not indicated when it expects to publish the DP.

More in­for­ma­tion

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

Papers for the upcoming IASB discussion of IFRS 17

12 Oct 2018

At its upcoming meeting, the IASB will discuss IFRS 17 'Insurance Contracts' to determine whether the various concerns regarding the standard that have been brought to the IASB's attention require action of the Board.

Since IFRS 17 was issued in May 2017, the Board has been monitoring the implementation and has learned about concerns and implementation challenges, among them the issues identified in the EFRAG letter sent to the IASB last month. The Board had previously indicated that it would consider whether additional action is needed to address matters arising during implementation. The upcoming meeting on 24 October will be a first step in this assessment process.

Agenda paper 2C for the meeting reveals the criteria the staff of the IASB has developed for the Board to apply in assessing whether a concern warrants considering an amendment:

  1. the amendment would not result in significant loss of useful information relative to that which would be provided by IFRS 17 for users of financial statements and
  2. the amendment would not unduly disrupt implementation processes that are already under way or risk undue delays in the effective date of a standard that is needed to address many inadequacies in the existing wide range of insurance accounting practices.

The staff also notes that even if the Board agrees that any potential amendment to IFRS 17 meets the criteria, it does not mean that all amendments meeting these criteria are justified.

Agenda paper 2D for the meeting includes some background information and provides for each identified concern or implementation challenge:

  • an overview of the IFRS 17 requirements;
  • a summary of the Board’s rationale for setting those requirements;
  • an overview of the concern or implementation challenge expressed; and
  • staff preliminary thoughts.

The paper notes 25 identified concerns that are listed in paragraph 12 in a table offering an overview and referencing the subsequent paragraphs where the concern is dicussed in detail.

The Board will be asked to consider at a future meeting whether any of the concerns and implementation challenges indicate a need for standard-setting to amend the requirements of IFRS 17. There are no decisions expected at this meeting.

The papers for this session (currently scheduled for 15:15-17:45 on 24 October) are available on the IASB website (please scroll down). In addition to the two papers pointed out above, they also include a cover note, a summary of the TRG meeting held in September, and the TRG submission log.

October 2018 IASB meeting agenda posted

12 Oct 2018

The IASB has posted the agenda for its next meeting, which will be held at its offices in London on 24 and 25 October 2018. There are eight topics on the agenda.

The Board will discuss the following:

  • Primary financial statements
    • Descriptions of subtotals
  • Implementation
    • Deferred tax — tax base of assets and liabilities: possible narrow-scope standard-setting
  • Management commentary
  • Preface to IFRS Standards
  • Disclosure initiative
    • Accounting policies
  • IFRS 17 Insurance contracts
    • Summary of TRG for IFRS 17 meeting
    • TRG submissions log
    • Criteria for evaluating possible amendments to IFRS 17
    • Concerns and implementation challenges
  • Rate-regulated activities
  • Goodwill and Impairment
    • Additional work to be performed
    • Identifying better disclosures for business combinations, goodwill and impairment
    • Discussion paper outline

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.

Updated IPSAS-IFRS alignment dashboard

12 Oct 2018

The International Public Sector Accounting Standards Board (IPSASB), which develops the of International Public Sector Accounting Standards (IPSAS) for financial reporting by governments and other public sector entities, has released an updated IPSAS-IFRS alignment dashboard showing how far individual IPSAS are aligned with corresponding IFRSs.

The alignment dashbord was updated for the September 2018 IPSASB meeting and now also includes IPSAS 41 Financial Instruments issued in August 2018.

Please click to access the updated dashboard on the IPSASB website.

Agenda for the October 2018 DPOC meeting

10 Oct 2018

The Trustees of the IFRS Foundation will be meeting in Johannesburg from 16 to 18 October 2018. However, only the meeting of the Due Process Oversight Committee (DPOC) on 16 October will be held in public.

The agenda for the DPOC meeting is summarised below.

Tuesday, 16 October 2018 (10:30–11:50)

  • Introduction and Actions from DPOC meeting held on 5 June 2018
  • Technical activities: Key issues and update
  • Review of the post-implementation review of IFRS 13
  • Consultative groups — annual review and DPOC engagement
  • Reporting protocol — annual general report
  • Education material — review of due process
  • Due Process Handbook review
    • Proposals for improvements
      • Agenda decisions: Supporting consistent application
      • Adding projects to the Board’s work plan
      • Effects analysis
      • Taxonomy
      • Anonymous complaints about due process
    • Outline of timetable and next steps
  • Correspondence: update
  • Summary

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

Agenda for the October 2018 Emerging Economies Group meeting

09 Oct 2018

The agenda is available for the upcoming meeting of the IASB's Emerging Economies Group (EEG), which is being held in Seoul on 29-31 October 2018.

The agenda for the meeting is summarised below:

Monday 29 October 2018 (09:00-17:00)

  • Address by hosting country
  • Address by IASB
  • Financial instruments with characteristics of equity (four slots with breaks in between)

Tuesday 30 October 2018 (09:00-16:00)

  • Goodwill and impairment
  • Accounting for micro-entities
  • IFRS for SMEs – forthcoming review

Wednesday 31 October 2018 (09:00-13:00)

  • Implementation of IFRS 9
  • Extractive activities
  • Update and discussion on current IASB projects with focus on better communication and business combinations under common control

Agenda papers from this meeting are available on the

Insurance contracts transition resource group holds third technical meeting

08 Oct 2018

The Transition Resource Group (TRG) for Insurance Contracts held its third technical meeting on 26–27 September 2018.

The purpose of the TRG is to seek feedback on potential issues related to im­ple­men­ta­tion of IFRS 17 Insurance Contracts. Specifically, the TRG discussed the following:

  • Insurance risk consequent to an incurred claim.
  • Determining discount rates using a top-down approach.
  • Commissions and reinstatement premiums in reinsurance contracts issued.
  • Premium experience adjustments related to current or past service.
  • Cash flows that are outside the contract boundary at initial recognition.
  • Recovery of insurance acquisition cash flows.
  • Premium waivers.
  • Group insurance policies.
  • Industry pools managed by an association.
  • Annual cohorts for contracts that share in the return of a specified pool of underlying items

A summary on the meeting and audio record­ings of each session are available on the TRG meeting page on the IASB’s website. For more in­for­ma­tion, see Deloitte's related IFRS in Focus newslet­ter.

In addition, see the meeting summary and listen to the podcast on the IASB's website.

Recent sustainability and integrated reporting developments

08 Oct 2018

A summary of recent developments at the GRI/UN Global Compact, GRI, IIRC, FRC, TCFD, IRC, A4S, and WFE.

The Global Reporting Initiative (GRI) and the United Nations Global Compact initiative have released a new publication Integrating the SDGs into Corporate Reporting: A Practical Guide. The publication helps companies of all sizes to prioritize SDG targets to act and report on, set related business objectives, and measure and report on progress.

The GRI has also launched an updated version of its widely used GRI 403: Occupational Health and Safety reporting standard.

A series of ‘breakthrough’ moments have been named by the International Integrated Reporting Council (IIRC) in its 2017 integrated report, signalling the breadth of support for integrated reporting as it becomes embedded by businesses around the world. Please see the IIRC press release for a summary and access to the annual report.

The IIRC also announces that Dominic Barton has been appointed Chair of the IIRC. The IIRC website offers a press release and an interview with the new Chair.

The UK FRC's Financial Reporting Lab is inviting investors and companies to participate in a new project on the disclosure of climate change and workforce information. The project will consider how the recommendations identified in the Lab’s previous reports on business model reporting, risk and viability and performance metrics apply to companies’ reporting on climate change and their workforce. Please see the press release on the FRC website for more information.

The TCFD Knowledge Hub now offers two new sections – case studies and upcoming events – providing companies with the additional resources they need to ensure all the knowledge on the Task Force on Climate-related Financial Disclosures (TCFD) is available in one place.

South Africa's IRC has updated its Starter’s Guide initially published in 2014, to provide organisations with practical suggestions on preparing an integrated report. It is aligned with the King IV Report on Corporate Governance for South Africa, 2016  and presents updated examples five years after publication of the <IR> International Framework.

Accounting for Sustainability (A4S) has released a two minute survey on sustainability in finance for all finance professionals to take. The survey aims to understand the current perceptions and attitudes to sustainability within the finance community. Please click here to participate.

A4S has also released a report setting out actions to deliver a global sustainable financial system, with recommendations for all parts of the investment chain. The recommendations in the report include building a compelling evidence base and motivating people to act, developing consistent terminology, allocating funds to sustainable outcomes, adopting reporting standards, and pricing externalities. The report can be accessed through the press release on the A4S website.

The World Federation of Exchanges (WFE) has formally launched its Principles for Sustainable Exchanges. The principles include education of market participants, promotion of ESG disclosures, multi-stakeholder engagement for sustainable finance, provision of markets and products, and establishing effective internal governance in support of sustainability efforts.

Third technical meeting of the insurance contracts transition resource group — summary of discussions

08 Oct 2018

The Transition Resource Group (TRG) for Insurance Contracts held its third technical meeting on 26-27 September 2018. We have published a newsletter summarising the discussions of this meeting.

During the meeting, the TRG discussed the following:

  • Insurance risk consequent to an incurred claim
  • Determining discount rates using a top-down approach
  • Commissions and reinstatement premiums in reinsurance contracts issued
  • Premium experience adjustments related to current or past service
  • Cash flows that are outside the contract boundary at initial recognition
  • Recovery of insurance acquisition cash flows
  • Premium waivers
  • Group insurance policies
  • Industry pools managed by an association
  • Annual cohorts for contracts that share in the return of a specified pool of underlying items

Please click to download our summary of the discussions at the meeting.

European Parliament adopts resolution on IFRS 17

04 Oct 2018

At its current sitting in Strasbourg, the European Parliament (EP) adopted a resolution on IFRS 17 'Insurance Contracts' introduced by the Committee on Economic and Monetary Affairs (ECON).

As reported earlier, the resolution notes the benefits that IFRS 17 will bring about but also states that ECON members have several concerns regarding the standard.

The motion for a resolution was discussed in the plenary session of the EP on 1 October 2018. During the plenary session, the European Comission (EC) representative and the EP members:

  • noted that IFRSs are essential and costs are inevitable in changing to a new environment;
  • stressed that the benefits from IFRS 17 are clear as it will bring comparability and clarity to an industry that is currently not transparent;
  • noted that in order to be endorsed, IFRS 17 should comply with the EU policy in relation to sustainability, European public good, climate change and long-term investments;
  • noted the importance of assessing the impact of IFRS 17 on financial stability;
  • recalled that the EC has no possibility of changing IFRSs during endorsement;
  • noted that EFRAG has identified six issues to be considered by the IASB again;
  • noted that the IASB is going to discuss in October potential amendments to IFRS 17 and a possible delay of the timeline;
  • called for the industry to be realistic regarding the solutions it is asking of the IASB;
  • noted that standards do and should evolve over time; and
  • noted that the EC will continue to monitor the work on IFRS 17 ensuring it is in line with the European public good and puts no undue strain on the insurance industry.

The resulotion was adopted by show of hand by the EP on 3 October 2018.

The following additional information is available on the EP website:

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