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October

ESAs comment on IFRS 17 endorsement process in the EU

19 Oct 2018

The European Supervisory Authorities (ESAs) have jointly written to the European Financial Reporting Advisory Group (EFRAG) to express concerns on the endorsement process for IFRS 17 'Insurance Contracts'.

In September 2018, EFRAG agreed on a letter to the IASB regarding IFRS 17 to bring concerns of European constituents regarding the standard to the IASB's attention. While EFRAG is waiting for the IASB to consider these (and other) concerns, the endorsement process for IFRS 17 is temporarily put on hold. The IASB will discuss IFRS 17 concerns and implementation challenges at its meeting next week but no decisions are expected as yet.

The ESAs note the delay in the endorsement process with concern. Their letter states:

While, at this stage, we do not express any detailed technical views on IFRS 17, we reiterate the need to continue to progress and to finalise the analysis of IFRS 17 in a timely manner against the background of the effective date of IFRS 17 of 1 January 2021.

Similarly, in a speech given in Madrid today, the Chair of the European Securities and Markets Authority (ESMA), which is one of the ESAs, also commented on IFRS 17. He said:

[W]hile we are still analysing its technical details, one thing that can already be affirmed with certainty is that IFRS 17 will improve comparability and transparency of financial information on insurance contracts when compared to the current situation. [...] Therefore, while it is important to exercise caution in assessing the changes introduced by IFRS 17, I think it is necessary to avoid any further delays in reaching a common set of accounting standards for insurance contracts. [...W]e are quite concerned by the delay that we are observing in the endorsement process of IFRS 17 in the EU.

Please click to access the the quoted documents:

IFRS Foundation Trustees chair discusses new role and upcoming priorities

18 Oct 2018

In a recent interview, the Chair of the IFRS Foundation Trustees Erkki Liikanen provided his thoughts on his new role, financial reporting in the global economy, and his priorities for the Trustees.

Mr Liikanen noted that financial reporting works best when standards and practices across jurisdictions are the same to maintain consistency and that the use of IFRS Standards have helped achieve this. In addition, he stated that his priorities for the Trustees are to look at core functions and strategies.

For more information, see the interview on the IASB’s website.

Recordings from the October 2018 DPOC meeting

18 Oct 2018

The Trustees of the IFRS Foundation are currently meeting in Johannesburg. On 16 October, the Due Process Oversight Committee (DPOC) of the Trustees held its meeting (the only part of the Trustees meeting held in public). Recordings from the meeting are now available.

The DPOC members discussed the following topics

  • 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

The recordings are available on the IASB's website.

Insurers call for a two-year delay in the effective date of IFRS 17

17 Oct 2018

Nine insurance industry organisations from Europe, Canada, Korea, New Zealand, Australia, and South Africa have written a joint letter to the IASB asking for further amendments to IFRS 17 'Insurance Contracts' and a two-year delay in the effective date of the standard.

The letter stresses the support of the industry for IFRS 17 as a "high-quality standard for insurance contracts which improves insurers’ financial reporting" but notes that preparatory work has confirmed that "a number of important issues need to be resolved in order to ensure the quality and operational practicability of the new standard". In addition, the insurers mention operational constraints ontheir ability to successfully implement IFRS 17 on the current timelines. The letter argues:

As a result, we strongly believe a 2-year delay in the effective date of the standard is required. This lead time is essential both to allow for the necessary improvements to the standard and to allow adequate time for the wide range of companies required to apply the standard and meet its significant implementation challenges.

The letter promises that a delay would not result in insurers stopping or slowing their implementation projects.

Please click to access the letter on the website of Insurance Europe, one of the signatories of the letter.

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

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.