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Recent integrated reporting developments

24 Apr 2017

A summary of recent developments at the IIRC and ACCA.

The Banking Network of the International Integrated Reporting Council (IIRC) has released Innovation in banking - are we communicating the value created?. The paper focuses on the need for businesses to innovate to remain competitive and shows how the IIRC's Framework provides a useful tool to help banks think about innovation that can lead to increases in financial and intellectual capitals in later periods. Please click to access the publication on the IIRC website.

The Association of Chartered Certified Accountants (ACCA) has published a report which highlights the benefits and challenges that early integrated reporting adopters have experienced and gives practical recommendations to those that are yet to adopt. For the study the report is based on, ACCA worked with the IIRC from July to October 2016 to review 41 corporate reports produced by participants of the IIRC's Business Network. Please click to access the report on the ACCA website.

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IASB proposes amendments to IFRS 9 regarding the classification of certain prepayable financial assets

21 Apr 2017

The International Accounting Standards Board (IASB) has published an exposure draft 'Prepayment Features with Negative Compensation (Proposed amendments to IFRS 9)' to address the concerns about how IFRS 9 'Financial Instruments' classifies particular prepayable financial assets. Comments are requested by 24 May 2017.



The Board's consideration of this matter were triggered by a submission to the IFRS Interpretations Committee. The Committee noted that under IFRS 9 Financial Instruments certain prepayment options would preclude instruments that otherwise only feature contractual cash flows that are solely payments of principal and interest from being measured at amortised cost or fair value through other comprehensive income. Problematic in this case are prepayment features where the lender could be forced to accept a prepayment amount that is substantially less than unpaid amounts of principal and interest because this would constitute a payment to the borrower by the lender and not a compensation from the borrower to the lender. The Interpretations Committee was convinced that using amortised cost measurement could provide useful information in this case and asked the Board to consider adding a narrow-scope exception to IFRS 9.


Suggested changes

The Board followed the Interpretations Committee's reasoning and therefore ED/2017/3 Prepayment Features with Negative Compensation (Proposed amendments to IFRS 9) proposes a narrow exception to IFRS 9 for particular financial assets that would otherwise have contractual cash flows that are solely payments of principal and interest but do not qualify for amortised cost or fair value through other comprehensive income measurement as a result of a prepayment feature.

The Board proposes that such a financial asset would be eligible to be measured at amortised cost or at fair value through other comprehensive income (depending on a company's business model) if two conditions are met:

  • the assessment that the prepayment amount is not solely a payment of principal and interest on the principal amount outstanding only hinges on the fact that the party that chooses to terminate the contract early may receive reasonable additional compensation for doing so; and
  • when the entity initially recognises the financial asset, the fair value of the prepayment feature is insignificant.

The ED also contains proposed amendments to IFRS 7 and IFRS 1 for cases where it is impracticable to assess whether the fair value of a prepayment feature was insignificant at initial recognition.


Effective date and transition requirements

The proposed effective date of the amendments is 1 January 2018 (to coincide with the effective date of IFRS 9). The exception would be applied retrospectively, however, certain relief is granted if at the date of initial application it is impracticable for an entity to assess whether the fair value of a prepayment feature was insignificant at initial recognition of the financial asset.


Comment deadline

The IASB argues that the matter is narrow in scope and urgent and has therefore set a comment period of 30 days instead of the standard minimum period of 120 days. Consequently, comments on the ED are requested by 24 May 2017.


Next steps

In order to meet the intended effective date of 1 January 2018, the Board follows a very tight project timeline. After the end of the comment period in May, the Board intends to redeliberate the issue in June and July 2017 and (if it decides to proceed with the proposed amendments) issue a final amendment by the end of October 2017.


Additional information

Please click for:

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Agenda and pre-meeting summaries for the May 2017 IFRS Interpretations Committee meeting

20 Apr 2017

The IFRS Interpretations Committee will meet via Video Conference Call on Wednesday 3 May 2017. It is scheduled to be a one hour meeting, to discuss one new issue. The staff will also identify the new issues that have come to them that they are still analysing for future meetings.

New issue

The Committee will consider whether a financial instrument, classified as equity by the issuer in accordance with IAS 32.16A-16D, is eligible for FVTOCI classification in terms of IFRS The staff believe that it is clear that such instruments are not eligible for the OCI presentation election and that the Committee should not add this issue to its agenda.

The full agenda and the pre-meeting summaries for the meeting can be found here. We will update this page for our Deloitte observer notes from the meeting as they become available.

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ITCG call for members

20 Apr 2017

The IASB's IFRS Taxonomy Consultative Group (ITCG) is seeking to fill two open positions.

The ITCG is a consultative group established to assist the IASB in its activities related to the IFRS Taxonomy used when tagging financial information using XBRL (eXtensible Business Reporting Language).

The deadline for applications for membership is Thursday, 1 June 2017. Please click for more information in the press release on the IASB website.

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Pre-meeting summaries for the April IASB meeting

19 Apr 2017

The IASB will meet at its offices in London on 24 and 27 April 2017. 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.

There are five topics on the agenda. One session will be held jointly with the FASB.

Monday 24 April

The meeting will start with a brief update on the strategy for supporting the implementation of the forthcoming IFRS 17 Insurance Contracts, including the objective of the Transition Resource Group the IASB plans to establish.

This will be followed by an education session addressing concerns expressed during the February meeting about some aspects of the Rate-regulated Activities project.

In the afternoon session the IASB will be joined by the FASB, by video, for an education session on the FASB’s Financial Performance Reporting project.

Thursday 27 April

The meeting continues on Thursday afternoon with some IFRS Implementation Issues and further discussions on a proposal to amend the definition of a business in IFRS 3 Business Combinations.

The implementation session will consider the Interpretation Committee’s tentative decision on fees included in the ‘10 per cent’ test for the purpose of derecognition; completing the amendments to IAS 19 and IFRIC 14; and analysing feedback on amendments to IFRS 3 and IFRS 11 for previously held interests.

The discussion of the definition of a business will focus on whether the screening test should be modified in light of comments received.

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

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Four new IPSASB videos on adopting and implementing IPSASs

18 Apr 2017

The International Public Sector Accounting Standards Board (IPSASB) has issued four new videos as part of a series examining the challenges and benefits of governments adopting International Public Sector Accounting Standards (IPSASs) and accrual accounting.

In the video interviews, IPSASB members from different nations describe the process and share key details, timelines, and lessons learned in their jurisdictions in connection with the adoption of IPSAS. The four new videos are for China, the United States, Canada, and Japan.

Earlier this year, the IPSASB published videos on Austria and Australia, and in 2015, the IPSASB published videos for South Africa, Panama, New Zealand, Switzerland, and Brazil.

All videos are available on the IPSASB website.

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April 2017 IASB meeting agenda posted

13 Apr 2017

The IASB has posted the agenda for its next meeting, which will be held at its offices in London on 24 and 27 April 2017. One session will be held jointly with the FASB.

The Board will discuss the following:

  • Insurance contracts
  • Rate-regulated activities
  • Financial performance reporting (education session with FASB)
  • IFRS implementation issues
  • Definition of a business

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.

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BCBS guidance on the treatment of problem assets

13 Apr 2017

The Basel Committee on Banking Supervision (BCBS) has published final guidance on the prudential treatment of problem assets in the form of definitions of non-performing exposures and forbearance.

The definitions promote harmonisation in the measurement and application of non-performing exposures and forbearance, which are two important measures of asset quality, in order to foster consistency in supervisory reporting. The guidelines complement the existing accounting and regulatory framework for asset categorisation.

Please click to access the BCBS guidelines on the website of the Bank for International Settlements (BIS).

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FSB consults on evaluation framework for G20 financial regulatory reforms

13 Apr 2017

The Financial Stability Board (FSB) has published for consultation the main elements of a proposed framework for post-implementation evaluation of the effects of the G20 financial regulatory reforms.

As a consequence of the financial crisis, the G20 launched a comprehensive programme of financial reforms and the FSB has coordinated the development of these reforms and reported annually on the progress with the most recent report published in August 2016.

The proposed new framework is intended to guide analyses of whether the core financial reforms are achieving their intended outcomes and to help to identify any material unintended consequences that may have to be addressed.

Please click for a press release and the consultation paper on the FSB website. The FSB welcomes comments and responses to the questions set out in the consultation by 11 May 2017.

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IPSASB consults on heritage reporting

12 Apr 2017

The International Public Sector Accounting Standards Board (IPSASB) has released for comment 'Financial Reporting for Heritage in the Public Sector'.

As many public sector entities have heritage responsibilities, the consultation paper is intended to be a first step toward developing financial reporting guidance to support accountability and decision making in this area. The paper describes heritage items as items that are intended to be held indefinitely and preserved for the benefit of present and future generations because of their rarity and/or significance. It proposes that:

  • heritage items' special characteristics do not prevent them from being assets for the purposes of financial reporting;
  • heritage items should be recognised in the statement of financial position if they meet the recognition criteria in the Conceptual Framework; and
  • in many cases, it will be possible to assign a monetary value to heritage assets.

The paper also discusses initial and subsequent measurement of heritage assets, whether heritage preservation responsibilities could involve present obligations for entities that should be recognised as liabilities in the financial statements, and presentation of information for heritage in general purpose financial reports.

Comments on the consultation paper are due to the IPSASB by 30 September 2017.

Please click for the following additional information on the IPSASB 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.