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ESMA publishes report on the activities of accounting enforcers and their findings within the EU in 2018

27 Mar 2019

The report provides an overview of the activities of the European Securities and Markets Authority (ESMA) and the accounting enforcers in the European Union (EU) when examining compliance of financial information provided by issuers listed on regulated markets with the applicable financial reporting framework in 2018.

European enforcers examined the financial statements of about 950 issuers representing an average examination rate of 16% of all IFRS issuers with securities listed on regulated markets. These examinations resulted in 328 actions taken to address material departures from IFRS.

Enforcers also assessed the non-financial information related to ESG for 819 issuers, covering approximately 31% of the total estimated number of issuers subject to the new requirements, resulting in 51 enforcement measures.

In addition, 746 management reports were reviewed for evaluating compliance with ESMA’s guidelines on alternative performance measures, covering around 15% of all IFRS listed issuers in Europe against which were taken 136 corrective actions.

Please click to access the full report on the ESMA website. ESMA has also updated its compliance table showing which competent authorities have informed ESMA that they comply, do not comply or intend to comply with the ESMA’s guidelines on the enforcement of financial information.

Overview – Research findings on hybrid pension plans

25 Mar 2019

At the July 2018 meeting of the IASB's Accounting Standards Advisory Forum (ASAF), the Canadian Accounting Standards Board (AcSB) presented the results of research performed by Canada, Germany, Japan, the UK and the US on hybrid pension plans, which are neither defined contribution plans nor defined benefit plans. The AcSB has now published an short overview of the research findings.

The overview provides insights into:

  • why the research was undertaken;
  • what the research is about;
  • key research findings and observations; and
  • what the standard-setters recommended to the IASB.

The IASB plans to consider the results of the research on hybrid plans when assessing priorities in its next agenda consultation.

Please click to access the overview on the AcSB website.

Insurance contracts transition resource group releases meeting agenda

25 Mar 2019

The IASB has released the agenda for IFRS 17 transition resource group (TRG) meeting on 4 April 2019.

The purpose of the TRG is to seek feedback on potential issues related to implementation of IFRS 17 Insurance Contracts. By analysing and discussing potential implementation issues, the TRG will help the IASB determine whether additional action is needed, such as providing clarification or issuing other guidance. This meeting will be the fouth meeting where technical matters will be discussed. Items are getting fewer as the IASB has already begun discussing potential amendments to IFRS 17.

The agenda for the meeting is as follows:

Thursday, 4 April 2019 (9:30-12:00)

  • Welcome and introductory remarks
  • Investment components within an insurance contract
  • Reporting on other questions submitted
  • Administrative matters

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

New EFRAG TEG Chair and EFRAG CEO appointed

22 Mar 2019

The EFRAG Board has appointed Chiara Del Prete as new EFRAG TEG Chair for a three-year term, renewable once. Furthermore, the EFRAG Board has appointed Saskia Slomp as new EFRAG CEO. Both appointments take effect as of 1 April 2019.

Ms Prete and Ms Slomp will succeed Andrew Watchman whose term ends this month. For more information, see the press release on the EFRAG’s website.

Agenda for the Management Commentary Consultative Group

21 Mar 2019

The agenda for the IASB's Management Commentary Consultative Group created to support the project to update the IFRS Practice Statement 'Management Commentary' is now available.

The meeting is scheduled for 3 April 2019 in London and will focus on the business model, strategy, operating environment and risks of management commentary.

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

IASB issues podcast on latest Board developments

21 Mar 2019

The IASB has released a podcast featuring Chair Hans Hoogervorst, Vice-Chair Sue Lloyd, and technical staff member Matt Tilling to discuss the deliberations at the March 2019 IASB meeting.

The podcast features dis­cus­sions of the following topics in more detail (length of the podcast: 15 minutes):

  • Recent appointments to IASB Board
  • Clas­si­fi­ca­tion of li­a­bil­i­ties as current or non-current
  • Narrow-scope amendments to IAS 1
  • Subsidiaries that are SMEs
  • Comprehensive review of the IFRS for SMEs Standard
  • Discussion paper on financial instruments with characteristics of equity
  • Primary financial statements

The podcast can be accessed through the press release on the IASB website. More in­for­ma­tion on the topics discussed is available through our com­pre­hen­sive notes taken by Deloitte observers at the March IASB meeting.

IASB concludes its research project on principles of disclosure

21 Mar 2019

The IASB has published ‘Disclosure Initiative — Principles of Disclosure project summary' which summarises the work performed and conclusions reached in the principles of disclosure research project.

In March 2017, the IASB issued a discussion paper (DP) on possible approaches to address disclosure issues, such as the lack of relevant information, too much irrelevant information, and ineffective communication of the information provided. Feedback for the DP revealed that “improving the way disclosure requirements are developed and drafted in IFRS Standards is the most effective way it can help to address the disclosure problem.” This lead the Board to prioritise its project on targeted Standards-level review of disclosure. The Board also addressed other findings during its research related to accounting policy disclosures, the implications of technology on financial reporting, and use of performance measures in financial statements. Other topics in the DP will not be pursued and this project summary closes the research project.

For more information, see the press release and project summary on the IASB’s website.

Updated IASB work plan — Analysis

21 Mar 2019

Following the IASB's March 2019 meeting, we have analysed the IASB work plan to see what changes have resulted from the meeting and other developments since the work plan was last revised in February.

Below is an analysis of all changes that were made to the work plan since our last analysis on 11 February 2019.

Stan­dard-set­ting projects

  • No changes.

Main­te­nance projects

  • Accounting Policies and Accounting Estimates (Amendments to IAS 8) — The expected date when the Board will decide on the project’s direction was removed.
  • Classification of Liabilities as Current or Non-current (Amendments to IAS 1) — An IFRS amendment is now expected in the second half of 2019.
  • Disclosure initiative — Accounting policies — An exposure draft is now expected in the second half of 2019.
  • IBOR reform and its effects on financial reporting — An exposure draft is now expected in May 2019.
  • Improvements to IFRS 8 Operating Segments (Amendments to IFRS 8 and IAS 34) — This maintenance project is no longer on the work plan.

Research projects

  • Disclosure initiative — Principles of disclosure — This research project is no longer on the work plan.
  • Discount rates — This research project is no longer on the work plan.
  • Financial instruments with characteristics of equity — The decision to decide this research project’s direction is now expect in the second half of 2019.
  • Subsidiaries that are SMEs — This research project has been added to the work plan and a review of the research conducted is expected in the second half of 2019.

Other projects

  • IFRS taxonomy update — 2018 general improvements — A final update is expected in March 2019.

The above is a faithful com­par­i­son of the IASB work plan at 11 February 2019 and at 15 March 2019. For access to the current IASB work plan at any time, please click here.

Chair of the IFRS Interpretations Committee clarifies timing of implementing agenda decisions

20 Mar 2019

Sue Lloyd, Vice-Chair of the IASB and Chair of the IFRS Interpretations Committee, has published an article on the IASB’s website on the timing of stakeholders’ compliance with IFRS Interpretations Committee agenda decisions.

At its December 2018 meeting, the IASB decided to update its Due Process Handbook to allow companies “suf­fi­cient time” to implement changes in accounting policy that result from the IFRS Interpretations Committee’s agenda decisions.

In the new article, Ms Lloyd reminds readers that the IFRS Interpretations Committee publishes agenda decisions after it decides a stakeholder issue does not require standard-setting measures. Instead, the Committee explains how existing IFRS Standards apply to the stakeholder’s issue. Ms Lloyd notes:

[T]he Board has acknowledged that agenda decisions often provide new information that should be seen as helpful and persuasive (for example, by integrating requirements in the Standards with material in the Basis for Conclusions and Illustrative Examples). This means that a company does not have an error simply because its application of IFRS Standards was inconsistent with an agenda decision.

She goes on to acknowledge that “it may take time to implement such an accounting policy change” and further discusses the IASB’s concept of “sufficient” implementation time:

[I]t depends on the particular facts and circumstances. It will depend on the accounting policy change and the reporting entity. Preparers, auditors and regulators will need to apply judgement to determine what is sufficient. But as a rule of thumb I think it is fair to say that we had in mind a matter of months rather than years.

Ms Lloyd emphasises that companies should consider agenda decisions — and begin implementing necessary accounting policy changes — on a more timely basis. She underscores that judgement is required, just as it is with applying IFRS Standards.

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

AASB research into the application of IAS 36

19 Mar 2019

The Australian Accounting Standards Board (AASB) has published its Research Report No. 9 'Perspectives on IAS 36: A case for standard setting activity'.

The research report states that it has been widely observed that application of the existing version of IAS 36 Impairment of Assets is problematic in practice, causing significant issues at all stages in the financial reporting cycle. The authors conclude that the ongoing application issues demonstrate consistent divergence in understanding between preparers, users, auditors and regulators as to the procedures that should be applied in ensuring that assets are carried at no more than their recoverable amount. They are convinced that IAS 36 requires holistic reconsideration rather than piecemeal changes focussedon disclosure. The research report therefore recommends:

Review IAS 36 in its entirety with a view to issuing a new standard that provides principles that enable users, preparers, auditors and regulators to develop a common understanding of the practical aspects of undertakingthe procedures applied toensure that assets are carried at no more than their recoverable amount.

Other themes and recommendations coming out of the research include:

  • There is an overall lack of clarity on the purpose of the impairment test;
  • the application guidance does not align with internal decision-making; and
  • diversity in disclosure reduces usefulness.

Please click to download the full research report from the AASB website.

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