This site uses cookies to provide you with a more responsive and personalised service. By using this site you agree to our use of cookies. Please read our cookie notice for more information on the cookies we use and how to delete or block them.
The full functionality of our site is not supported on your browser version, or you may have 'compatibility mode' selected. Please turn off compatibility mode, upgrade your browser to at least Internet Explorer 9, or try using another browser such as Google Chrome or Mozilla Firefox.

July

IASB posts webinar on the IFRS Taxonomy 2018

17 Jul 2018

The IASB has posted to its website a webinar, ‘IFRS Taxonomy 2018’.

The webinar provides background information, an overview of changes, supporting materials, and upcoming changes to the IFRS Taxonomy.

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

Accountancy Europe responds to the EU fitness check

17 Jul 2018

Accountancy Europe has responded to the European Commission’s consultation document 'Fitness check on the EU framework for public reporting by companies'. While the response fully recognises the legitimacy of the Commissions concerns regarding sustainability and long-term investments, Accountancy Europe is not convinced that additional changes to IFRSs would address these concerns.

As reported earlier, the document seems oddly tilted against the use of IFRSs as issued by the IASB asking for example whether European listed companies are still best served by applying IFRS or whether the European Commission should be given the power to modify IFRSs as issued by the IASB. Accountancy Europe clearly warns against this. The response states:

It is still appropriate that the IAS Regulation prevents the Commission from modifying the content of IFRS. We call for great caution in permitting the EU to change specific aspects of IFRS standards published by the IASB ('carve-in') before transposing them into EU law.

The reasons the response cites are:

  • Fear of an uncontrollable and unpredictable trend that would lead to EU-IFRS;
  • isolating the EU from global capital markets would hinder investments (including long-term investments), create confusion, and increase the cost of capital;
  • concerns regarding the current position of foreign private issuers in the US;
  • decrease of EU influence on the international standard-setter, which would in turn make the issuance of international standards that do not meet the EU endorsement criteria more likely;
  • loss of all benefits that result from international comparability and transparency.

As additional points on international financial reporting Accountancy Europe also states that listed entities without subsidiaries should also be required to apply IFRSs, the option to apply IFRSs should be available at company level (not member state level), the EU endorsement criteria should not be changed, and the IASB's Conceptual Framework should be endorsed for use in the EU.

Please click to access to the letter of response and the completed consultation questionnaire on the Accountancy Europe website.

 

ASCG issues draft interpretation following an agenda decision on IAS 12

16 Jul 2018

At its meeting in Taipei on 2 and 3 March 2017, the International Forum of Accounting Standard Setters (IFASS) discussed the problem of there possibly being local interpretations of IFRSs at national level other standard-setters (and the IASB) are not aware of. This might be due to the fact that there are problems or that there might be expertise that might, or might not, be available in other jurisdictions. The Accounting Standards Committee of Germany (ASCG) has now issued its first draft interpretation making the draft available in the English language as well after also having reached out to the IFRS Foundation. The interpretation was developed following a negative agenda decision by the IFRS Interpretations Committee on a matter where diversity in practice is observed in Germany.

The Exposure Draft of ASCG Interpretation (IFRS) No. 1 Accounting for Interest and Penalties Related to Income Taxes under IFRSs (ED ASCG Interpretation 1) addresses the accounting for interest and penalties related to taxes within the meaning of section 3(4) of the AO (Abgabenordnung, Fiscal Code of Germany) that relate to current income taxes within the meaning of IAS 12.5 (interest and penalties related to income taxes) in financial statements prepared in accordance with IFRSs, as adopted by the EU.

According to the Exposure Draft, interest and penalties related to income taxes shall be accounted for in accordance with IAS 37.

If an entity changes its accounting treatment because of this interpretation, the lack of previous guidance means that this does not constitute the correction of an error, but rather a change in accounting policy within the meaning of IAS 8.

Comments on the exposure draft are requested by 31 August 2018. The English language translation of the draft is available here on the ASCG website.

IASB begins webcast series on the FICE DP

16 Jul 2018

On 28 June, the IASB published a comprehensive discussion paper DP/2018/1 'Financial Instruments with Characteristics of Equity'. The IASB has now made available the first webcast in a series of web presentations to help stakeholders as they prepare to submit their comments on the discussion paper.

The first webcasts offers an 11 minute overview of the discussion paper. The webcast can be accessed here.

Future webcasts in the series will cover:

  • the Board’s preferred approach and classification of non-derivative financial instruments;
  • classification of derivatives on own equity;
  • classification of compound instruments and redemption obligation arrangements;
  • presentation of equity instruments; and
  • presentation of financial liabilities.

Pre-meeting summaries for the July IASB meeting

16 Jul 2018

The IASB is meeting on Tuesday 17 and Wednesday 18 June 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.

Tuesday 17 July

Rate-regulated Activities

At this meeting the Board will discuss the staff’s recommendations for the measurement of regulatory assets that are recognised in the model as well as the staff’s initial views on a high-level presentation and disclosure objective for the model and possible presentation formats for the statement(s) of financial performance.

Management Commentary

The staff will provide an update on the project to revise the Management Commentary Practice Statement. The membership of the Management Commentary Consultative Group was announced on 10 July 2018. An Exposure Draft for a revised Practice Statement can be expected in 2020.

Business Combinations under Common Control

The staff will give an oral update of the project.

Conceptual Framework

This session focuses on when and how preparers of financial statements should refer to the new Conceptual Framework for assistance in developing accounting policies. The paper includes some analysis but not any recommendations.

Implementation

The Board will be asked for feedback on the proposal of the IFRS Interpretations Committee to propose narrow-scope amendments to IAS 37 to specify that the ‘cost of fulfilling’ a contract comprises the ‘costs that relate directly to the contract’.

In January 2018 the IASB discussed commodity loans and related transactions, including cryptocurrencies. The staff are recommending that the Board consider the feasibility of a narrow-scope project to address commodity loans. However, they recommend that the Board not do any more work at this time on developing an investment standard. They recommend that the Interpretations Committee be asked to consider how an entity should apply existing IFRS requirements to holdings of cryptocurrencies and ICOs.

Wednesday 18 July

Goodwill and Impairment

The Board will consider how to focus its work on the Goodwill and Impairment research project.

Disclosure Initiative

This session covers five topics: Definition of Material; Targeted Standards-level Review of Disclosures – Guidance for the Board – Drafting Disclosure Requirements; Accounting Policy Disclosure; Location of Information; Technology and Digital Reporting Considerations.

  • The staff are recommending that the Board complete the proposal to amend the definition of material so as to make the changes effective for periods beginning on or after 1 January 2020.
  • In relation to the guidance for the Board on how to draft disclosure requirements, the recommendations relate to when to use prescriptive language and ways to improve consistency of wording. They also have recommendations about how to organise the disclosure requirements within a Standard. The staff are recommending that the Board use IAS 19 Employee Benefits and IFRS 13 Fair Value Measurement to test the new approach.
  • The staff are recommending that the Board amend IAS 1:117 – 124 to require entities to disclose their material accounting policies rather than their significant accounting policies and develop related guidance and examples for inclusion in the Materiality Practice Statement.
  • The staff are recommending that the Board not develop requirements about IFRS information outside the financial statements or non-IFRS information inside the financial statements.
  • The staff are recommending that the Board include relevant considerations in the Guidance for the Board to use when developing and drafting disclosure objectives and requirements but to consider the broader implications of technology on financial reporting as part of the IFRS Foundation’s Technology Initiative.

Accounting Policies and Accounting Estimates

This session is to update the Board of progress on its Exposure Draft Accounting Policies and Accounting Estimates (Proposed amendments to IAS 8). While some respondents to the ED said the proposed amendments would improve clarity others questioned whether the benefits of finalising the proposed amendments would outweigh the costs of doing so. The staff have consulted with the Accounting Standards Advisory Forum and, as a next step, will seek the advice of the IFRS Interpretations Committee.

Emerging Economies Group Update

The meeting concludes with an update of the most recent meeting of the IASB’s Emerging Economies Group.

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.

Support material for IFRS 17 on reinsurance contracts held

13 Jul 2018

The IASB has published a pocket guide on reinsurance contracts held and a simple example of a reinsurance contract held to support the implementation of IFRS 17 'Insurance Contracts'.

The pocket guide (24 pages) includes insights from the discussions of the Transition Resource Group for IFRS 17 and the simple example of a reinsurance contract held illustrates the requirements applied to a group of underlying insurance contracts and applied to a reinsurance contract held that provides proportionate coverage for that group of underlying insurance contracts.

The new material is available on the IASB website:

 

EFRAG is looking for new TEG members

13 Jul 2018

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

Seven of the sixteen members of EFRAG TEG will reach the end of their current term of appointment on 31 March 2019 and three of the country liaison members reach the end of their current term on 30 November 2018. While all members are eligible for reappointment, EFRAG welcomes all applications and in particular seeks candidates with user, preparer and academic backgrounds.

Please see the press release on the EFRAG website for more information.

ASBJ and EFRAG hold joint meeting

12 Jul 2018

On 11 July 2018, the Accounting Standards Board of Japan (ASBJ) and the European Financial Reporting Advisory Group (EFRAG) held a joint meeting in Brussels. The meeting was the fourth bilateral meeting between the two bodies.

In addition to giving updates on their respective standard-setting activities and research projects (pensions, alternative measures for equity instruments, virtual currencies, and goodwill) at the meeting, the two bodies exchanged views on the IASB research projects on financial instruments with characteristics of equity, primary financial statements, and principles of disclosure.

For more information about the meeting, see the press release on the ASBJ website.

Recent sustainability and integrated reporting developments

11 Jul 2018

A summary of recent developments at the CDSB, CDSB/WBCSD, IIRC, GRI, and CDP.

In the past few months, the Climate Disclosure Standards Board (CDSB) held various workshops on the Task Force on Climate-related Financial Disclosures (TCFD) recommendations to provide guidance on the topic and gather feedback on the challenges and solutions that organisations are adopting on this journey.Several entries on the CDSB website reflect the input gathered:

The CDSB, jointly with the World Business Council for Sustainable Development (WBCSD),has also released new data from the Reporting Exchange analysing differences in environmental, social and governance (ESG) reporting between sectors, market maturity levels and national contexts. The report underscores that while sustainability reporting is moving in the right direction, the pace of change needs to accelerate to ensure a prosperous and sustainable future. Please click to access the report on the CDSB website.

Participants of the <IR> Technology Initiative of the International Integrated Reporting Council (IIRC) have published a technology primer, identifying steps that Chief Information Officer’s can take to build an information architecture that supports integrated reporting. Please click to access the primer on the IIRC website.

The IIRC has also launched the ‘Integrated Thinking & Strategy’ special interest group, which offers organisations the opportunity to share thinking about developing strategy across multiple capitals, learn from each other and co-create a common world view of integrated thinking that is globally relevant to help build resilient, future-fit businesses. Please click for more information on the IIRC website.

The Global Reporting Initiative (GRI) announces that as off 1 July 2018 the transition from GRI’s G4 guidelines to the Sustainability Reporting Standards (GRI Standards) is complete. The standards feature a modular, interrelated structure, and represent the global best practice for reporting on a range of economic, environmental and social impacts. This makes them easier to update, so that they keep pace with developments in the different fields. Please click for more information on the GRI website.

The GRI has also released two updated standards:

  • GRI 403: Occupational Health and Safety 2018 – Putting worker health first
  • GRI 303: Water and Effluents 2018 – From water management to water stewardship

More information on the updated standards and access to additional resources is available on the GRI website.

The Carbon Disclosure Project (CDP) has published Reporting climate resilience: The challenges ahead. The top three challenges for companies in adopting the TCFD recommendations are identified as (1) ensuring leadership support for enhanced disclosure, (2) revising risk assessment processes, and (3) applying scenario analysis to climate change. Please click to access the report.

IASB announces membership of consultative group for updating the Management Commentary Practice Statement

10 Jul 2018

In November 2017, the IASB formally added a project to revise its Management Commentary Practice Statement to its agenda. The IASB has now announced the membership of the consultative group that will advise the Board on this project.

The 18 members of the group are:

  • Rodrigo Araujo Alves, Petróleo Brasileiro S.A. (Petrobras)
  • Andreas Barckow, ASCG
  • Melissa Brown, Daobridge Capital Ltd.
  • Larissa van Deventer, Equity Research Analyst
  • Liliana Franco, Air Liquide
  • Lisa French, IIRC
  • Yukako Fujioka, FSA, Japan
  • Trent W. Klein, TELUS Coporation
  • Toby Langley, Bank of America Merrill Lynch
  • Kris Peach, AASB
  • Sandra J. Peters, CFA Institute
  • Deepa Raval, UK FRC
  • Massimo Romano, Generali S.P.A.
  • Michael Tovey, Bank of America
  • Ryoko Ueda, Mizuho International
  • Mark Vaessen, KPMG
  • Jed Wrigley, Eight Roads
  • Benjamin Yeoh, Royal Bank of Canada

EFRAG, ESMA, IAASB, and IOSCO are observers.

Please see the press release on the IASB website.

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.