October

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:

IASB issues podcast on proposed IFRS Taxonomy update

04 Oct 2018

On 20 September, the IFRS Foundation published 'IFRS Taxonomy 2018 — Proposed Update 1 Common Practice (IFRS 13 'Fair Value Measurement')'. A podcast with a high-level overview over the proposals is now available.

Please click to access the short overview (17 minutes) on YouTube.

IFASS meeting with exchange of views on EU fitness check

03 Oct 2018

The meeting of the International Forum of Accounting Standard Setters (IFASS) currently held in London saw a lively discussion on the European Commission (EC) consultation document 'Fitness Check on the EU Framework for Public Reporting by Companies'.

The topic was introduced by Peter Sampers, Chairman of the Dutch Accounting Standards Board (DASB). Mr Sampers coordinated the response of eleven smaller European standard-setters to the consultation and is also familiar with developments at the European oversight bodies ESMA, EIOPA, EBA, and ECB.

Mr Sampers introduced the topic to the wider standard-setter community by explaining the history of the fitness check beginning with the EU IAS Regulation over the Maystadt report, the evaluation of the IAS Regulation, the report of the HLEG on sustainable finance to the EC action plan on sustainable finance thus summarising what he called the European "love-hate relationship" with IFRSs. (Mr Sampers has kindly given us permission to make his presentation slides available on IAS Plus, they are available here.)

Mr Sampers then turned to the fitness check itself, especially to question 19 of the consultation: "Given the different levels of commitment to require IFRS as issued by the IASB around the globe, is it still appropriate that the IAS Regulation prevents the Commission from modifying the content of IFRS?" After a short comment on the lack of neutrality of the consultation language and format, which was later echoed by an irate FRC representative, Mr Sampers gave a balanced overview of pros and cons and shared consultation results that saw only the French standard-setter in favour of possible carve-ins and carve-outs while the other standard-setters and the oversight bodies all came down in favour of no changes. He also shared first results that had been presented by EC representatives at the meeting of EFRAG's Consultative Forum of Standard Setters in September (an official report on the consultation outcomes is expected in October 2018):

  • 338 responses were received.
  • Most responses came from accounting organisations.
  • 60% came from 5 member states.
  • The IFRS questions were addressed by approx. 70% of the respondents.

According to Mr Sampers, the EC representatives at the CFSS meeting also noted the following overall conclusions from the consultation: "IFRS is essentially fine" and "some think nothing should be done".

When the discussion was opened to the floor, the following main comments were made:

  • The wording of the HLEG in its final report seemed to indicate that there is equality between sustainability and long-term investment, which is not the case.
  • France's position is not pro carve-ins and carve-outs per se, it is for such a possibility as a last resort.
  • Canada has theoretically the possibility to change IASB pronouncements but has never done so yet. If there ever would be changes, it would be the standard-setter's decision and not a political one. Political decisions in other parts of the world that would have an effect on the international accounting community would be viewed with great concern.
  • It was noted that the question was connected with sovereignty issues but it was also noted by others that sovereignty issues have been on the table since adoption in the EU. The binary adoption decision was built into the endorsement process intentionally to keep the possibility of political influence to a minimum.
  • Next steps in the process will not necessarily be coming soon as Parliamentary elections are coming up in the EU, which could mean a standstill of developments in 2019.
  • The EU is not a bubble, "we are trading with the rest of the world and the rest of the world is trading with us". (Australia, Canada, and Hong Kong have in fact also responded to the EU consultation for exactly this reason.)
  • By trying to make accounting bring about long-termism, governments are ducking out of their jobs of addressing things directly themselves.

The last comment from the audience was from IASB Chairman Hans Hoogervorst. He thought the European thinking of giving the EU more power by being able to "threaten" the IASB with carve-ins and carve-outs was completely wrong. Mr Hoogervorst explained that the IASB is listening very carefully to concerns brought to its attention and many adjustments are made during the process of development of a standard. Why, he asked, should the IASB continue to listen to European concerns if in the end the EU would change the final standards during endorsement according to their own wishes anyway?

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