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EC launches fitness check on public reporting by companies

21 Mar 2018

The European Commission (EC) has published a consultation document 'Fitness Check on the EU Framework for Public Reporting by Companies' The document seems oddly tilted against the use of IFRSs as issued by the IASB.

In the section "The EU financial reporting framework for listed companies", the document notes different levels of commitment to require IFRS as issued by the IASB around the globe and asks whether it is "still appropriate that the IAS Regulation prevents the Commission from modifying the content of IFRS". It also asks whether EU endorsement process is appropriate to ensure that IFRSs do not pose an obstacle to broader EU policy objectives such as sustainability and long-term investments. In each case, "yes" can be checked without further substantiation, "no" needs to be substantiated. 

The questionnaire also asks how the EU can ensure that IFRSs do not pose an obstacle to sustainability and long-term investments. Again the only answers offered are (a) "By retaining the power to modify the IFRS standards in well-defined circumstances" and (b) "By making explicit in the EU regulatory framework that in order to endorse IFRS that are conducive to the European public good, sustainability and long term investment must be considered". "Other" opionons must be specified, unless they are "Don't know".

Please see the full consultation document on the EC website. Comments are requested by 21 July 2018.

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Report on the February 2018 IFRS Advisory Council meeting

21 Mar 2018

The IFRS Advisory Council met in London on 27–28 February 2018. Significant topics on the agenda included (1) the value and effectiveness of the IASB's approach to effects analysis, (2) the effectiveness of the Board’s current conference strategy, (3) an academic liaison strategy, (4) the 2018 review of the ASAF, (5) progress on the Foundation’s Emerging Economies engagement, and (6) the Board’s proposed social media strategy.

The report notes the following discussions:

  • Value and effectiveness of the IASB's approach to effects analysis — Council members advised how the IFRS Foundation could improve the effectiveness of its Effect Analysis work.
  • Effectiveness of the Board’s current conference strategy — Council members noted that conferences are one tool the Foundation can use to support its goals, but discussed other less-costly ways to achieve the Foundation's objectives.
  • Academic liaison strategy — Council members considered and discussed research, strategic ideas, recognition, and other objectives.
  • 2018 review of the ASAF — Council members discussed the dividing views on two key questions: (1) Should ASAF be formally incorporated into the IFRS Foundation’s Constitution? and (2) Should consultation with ASAF be a mandatory due process step in the Due Process Handbook?
  • Progress on the Foundation’s Emerging Economies engagement — Council members received an update and encouraged the Foundation to continue to expand their engagement in emerging economies.
  • Board’s proposed social media strategy — Council members encouraged a "push only" media strategy rather than a (more extensive) two-way social media debate.

The next meeting of the IFRS Advisory Council is scheduled for 27–28 February 2018, in London. The full meeting summary and podcast related to the council’s February meeting are available on the IASB's website.

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EFRAG issues annual review for 2017

21 Mar 2018

The European Financial Reporting Advisory Group (EFRAG) has published its 2017 annual review.

This publication includes reports from the EFRAG President Jean-Paul Gauzès and the TEG Chairman and CEO Andrew Watchman. It also features final endorsement advice on IFRS 16 Leases, preparatory endorsement advice work regarding IFRS 17 Insurance Contracts, research work into protecting long-term investment in Europe, and EFRAG's influence on the IASB's principles of disclosure project.

The annual review is available on the EFRAG website.

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Agenda for the April 2018 ASAF meeting

21 Mar 2018

The International Accounting Standards Board (IASB) has released an agenda for the meeting of the Accounting Standards Advisory Forum (ASAF), which is to be held at the IASB's offices in London on 16 and 17 April 2018.

The agenda for the meeting is summarised below:

Monday, 16 April 2018 (10:30-17:20)

  • Rate-regulated activities
    • Update on the Board’s discussions and tentative decisions since September 2017
  • Disclosure initiative — Principles of disclosure
    • Update on Board and staff activities since December 2017
    • Next steps
  • Commodity loans and related transactions
    • ASBJ presentation on virtual currencies (see our earlier news item)
    • Update on the Board’s discussions at its January 2018 meeting
  • Accounting Policies and Accounting Estimates (Amendments to IAS 8)
    • Feedback on the exposure draft
    • Next steps

Tuesday, 17 April 2018 (9:00-16:00)

  • Is financial reporting still an effective tool for equity investors in Australia?
  • Goodwill and impairment
    • Headroom approach
    • Including identifiable intangible assets within goodwill without losing information
    • Update on the Board’s tentative decisions at its meetings in December 2017 and January 2018
  • Primary financial statements
    • Update on the Board’s tentative decisions at its meetings in March 2017 and September 2017
    • Level of aggregation and disaggregation of financial information
  • IFRS Foundation Due Process Handbook – Review
  • Project updates and agenda planning

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

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New Office Director of the IFRS Foundation liaison office in Tokyo appointed

20 Mar 2018

The Trustees of the IFRS Foundation have announced the appointment of Makoto Takahashi as next Office Director of the Foundation's Asia-Oceania liaison office.

Mr Takahashi will take over from Mitsuhiro Takemura, who will return to Deloitte, where he was seconded from.

The IFRS Foundation established the Tokyo office in February 2011 in order to expand opportunities for direct contact between the IFRS Foundation and its stakeholders in the region. The Office Director is responsible for all operations of the liaison office.

Please see the announcement on the IASB website for more information.

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European Union Image

IFRS 9 and IFRS 17 dominate ECON exchange of views

19 Mar 2018

At the annual exchange of views this afternoon between the Committee on Economic and Monetary Affairs (ECON) of the European Parliament and representatives of the IASB and the IFRS Foundation, Parliamentarians were most interested in Information about IFRS 9 'Financial Instruments' and IFRS 17 'Insurance Contracts'.

The meeting was chaired by ECON Vice-Chair Luděk Niedermayer who in his introduction already mentioned the topics IFRS 9/sustainable finance (impact of IFRS 9 on long-term finance) and IFRS 17, which has not yet been endorsed for use in the European Union.

The focus of the IASB Chairman's initial statement was IFRS 17, which he called the IASB's "most important standard". He showed some slides that illustrated the dimensions of the change the new standard would bring about. Given the magnitude of change, Mr Hoogervorst explained, there was also resistance against it and the high costs of implementing the standard were often cited. He could not help adding that the estimation of the costs were inversely related to the enthusiasm for the standard of the person estimating. Finally, Mr Hoogervorst pointed at tomorrow's EFRAG meeting that will see presentations by AccountancyEurope, CRUF, and an asset management company. (Papers for the meeting are available here; the meeting will be broadcast.)

Questions from the Parliamentarians on IFRS 17 included why it was perceived as so difficult to implement, why companies were against using current interest rates if for their own well-being they were surely already thinking in current interest rates, and whether the EU being the most important IFRS applying  jurisdiction could still influence the timeframe of implementation of the standard, which was perceived as being to short.

Questions on IFRS 9 included the effects of the standard on long-term finance (which EFRAG is currently investigating) and whether IFRS 9 is really an improvement over IAS 39 as IAS 39 already required writing down impaired assets. The discussion around IFRS 9 and long-term finance also strayed in to wider corporate reporting and the IASB project to update the Practice Statement on Management Commentary.

Other topics of discussion shortly touched upon were the Conceptual Framework (expected timing end of the month, "prudence" is in it), IFRS 16 (implementation is going smoothly, it is not expected to impact access to loans), and the succession of Michel Prada (candidates are being identified, interviews will be held in April, proposals will be submitted to the Monitoring Board in June).

As the meeting has been recorded, it will be available here in due course.

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Recent sustainability and integrated reporting developments

19 Mar 2018

A summary of recent developments at the CDSB/CDP, FSB, ACCA, XRB, JICPA, GRI and CSE.

The Climate Disclosure Standards Board (CDSB) and the Carbon Disclosure Project (CDP) have released a report on research into 1,681 companies across 14 countries and 11 sectors that shows that there is a gap between the way companies identify climate-related risks and opportunities and how they are preparing to tackle them. Ready or not: Are companies prepared for the TCFD recommendations? is available through the press release on the CDP website.

The Chair of the Financial Stability Board (FSB) has written a letter to the G20 Finance Ministers and Central Bank Governors setting out the FSB priorities for the Argentine G20 Presidency. The letter notes that the Task Force on Climate-related Financial Disclosures (TCFD) is now focused on promoting companies’ voluntary implementation of its recommendations and will report on voluntary implementation at the Buenos Aires summit. The letter is available on the FSB website.

The Association of Chartered Certified Accountants (ACCA) has published a report providing its latest assessment of integrated reporting. The report is a follow up to the 2017 report Insights into Integrated Reporting – Challenges and best practice responses. The new report Insights into integrated reporting 2.0: walking the talk is available on the ACCA website.

The New Zealand External Reporting Board (XRB) has published the result of research into the current state of extended external reporting from the perspective of preparers and users. The research shows that some three-quarters of the chief financial officers of New Zealand public companies are either unaware of or not interested in emerging methods for extending reporting beyond traditional financial indicators. The results are reported in key parts and compared in the documents Survey Insights and Survey Highlights available on this website.

The Japanese Institute of Certified Public Accountants (JICPA) has published Vision for the future of integrated reporting and the role of CPAs. The short English language publication is available on the JICPA website.

The Global Reporting Initiative (GRI) announces that a French translation of the GRI Standards is now available. For more information, please see the press release on the GRI website.

The Colombo Stock Exchange (CSE) fulfilled its commitment to provide guidance to its market on sustainability reporting by publishing Communicating Sustainability. The CSE now joins 35 exchanges world-wide that are providing guidance on reporting environmental, social and governance (ESG) issues for listed companies in their markets. The guidance is available on the CSE website.

IASB (International Accounting Standards Board) (blue) Image
European Union Image

Annual ECON exchange of views with Hans Hoogervorst and Michel Prada

19 Mar 2018

At the annual exchange of views this afternoon between the Committee on Economic and Monetary Affairs (ECON) of the European Parliament and representatives of the IASB and the IFRS Foundation, IASB Chairman Hoogervorst and Michel Prada, Chairman of the IFRS Foundation Trustees, stand ready to answer questions of the Parliamentarians.

The meeting will be broadcast live and can be watched in any of the official languages of the European Union. The exchange of views is scheduled for the first slot starting at 3pm Brussels time.

Click here to watch the meeting.

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XBRL (eXtensible Business Reporting Language) (mid blue) Image

2018 IFRS XBRL taxonomy issued

16 Mar 2018

The IFRS Foundation has issued its 2018 IFRS Taxonomy. The IFRS Taxonomy is a translation of IFRSs (International Financial Reporting Standards) into XBRL (eXtensible Business Reporting Language).

The IFRS Taxonomy 2018 is consistent with IFRSs as issued by the IASB at 1 January 2018 and incorporates amendments made to the IFRS Taxonomy 2017 such as: (1) Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts (Amendments to IFRS 4), issued in September 2016, (2) IFRS 17 Insurance Contracts, issued in May 2017, and (3) Prepayment Features with Negative Compensation (Amendments to IFRS 9), issued in October 2017.

The IFRS Foundation has also published the IFRS Taxonomy Update — Annual Improvements and the IFRS Taxonomy Update — Prepayments Features with Negative Compensation (Amendments to IFRS 9). The IFRS Taxonomy 2018 incorporates the changes resulting from these two updates.

For more information, see the press release and the IFRS Taxonomy 2018 page on the IASB's website.

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Japan updates list of 'designated' IFRSs

16 Mar 2018

The Financial Services Agency (FSA) of Japan has announced that additional IFRSs issued up until 31 December 2017 were designated for use by companies voluntarily applying IFRSs in Japan.

Newly added IFRSs are:

  • amendments to IAS 28 on measurement of long-term interests in associates and Joint Ventures (issued in October 2017);
  • amendments to IFRS9 on prepayment features and modifications of financial liabilities (issued in October 2017); and
  • annual improvements 2015-2017 (issued in December 2017).

For more information, see the press release (in Japanese only) on the FSA website.

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