07 October 2011

EFRAG Planning and Resource Committee: Summary of meeting held in September

The EFRAG PRC reviewed the active pro-active projects: Business Combinations under Common Control, Considering the Effects of Accounting Standards, Corporate Income Tax, Disclosure Framework, The Role of the Business Model in Financial Reporting, Separate Financial Statements prepared under IFRS, and Capital Providers’ Use of Financial Statements.

Considering the Effects of Accounting Standards: Joint Discussion Paper of EFRAG and the UK ASB, with as main objective to develop proposals for a framework by which the effects of financial reporting standards can be considered by standard-setters, notably the IASB, in developing new standards and major amendments to existing standards. The comment deadline was 30 August and 28 comment letters were received from all over the world.

Business Combinations under Common Control (BCUCC): Joint Project of the Italian Standard Setter OIC and EFRAG with involvement of the French Standard Setter, ANC. It aims to identify, analyse and discuss the financial reporting practices used in the major markets to account for BCUCC and similar transactions in consolidated financial statements. The Discussion Paper has been approved for publication by EFRAG TEG and OIC, and has received support from a wide range of National Standard Setters. The Discussion Paper is expected to be issued in October with a comment deadline of 30 April 2012.

Corporate Income Tax: Joint project led by the UK and German Standard Setters - ASB and GASB - and EFRAG as part of EFRAG’s pro-active work. The aim of the project is critically to examine key aspects of accounting for corporate income tax. The project has been divided into two phases: the first phase will serve as a “call for evidence” to obtain views on the future of IAS 12, including possible limited amendments to IAS 12, and the approaches that merit further consideration in developing a new standard to replace IAS 12. The second phase will consider next steps based on responses to the consultation. EFRAG TEG and the UK ASB have approved the Discussion Paper. The initial Discussion Paper is expected to be published in November/December.

Disclosure Framework: Joint project of EFRAG, the UK ASB and the French ANC. The FASB has agreed to work together at project staff level and where possible to align efforts. The IASB will participate in the Advisory Panel. The project is aimed at the information contained in the notes to the financial statements prepared under IFRS. The project is aiming to develop a set of principles that can be used by standard-setters to make decisions about what and how information should be disclosed in the notes to the financial statements, and to make recommendations on how the existing disclosures under IFRS could be improved in terms of content, presentation and display. The paper “Losing the Excess Baggage” prepared by ICAS and the New Zealand Institute of Chartered Accountants will be considered. EFRAG TEG will discuss Disclosure Framework Project at its October meeting. The Discussion Paper is expected to be published in Spring 2012.

The Role of the Business Model in Financial Reporting: Joint project of EFRAG, the French ANC and the UK ASB. The project aims to explore the relationship between an entity’s business model and to consider what implications it should have for financial reporting. The Advisory Panels have met and have provided input on how the business model is defined in practice. The Advisory Panels will meet again mid-October. The staff is working towards preparing the first draft of a Discussion Paper.

Separate Financial Statements prepared under IFRS: Joint project of EFRAG, the Italian Standard Setter OIC, the Dutch Standard Setter DASB, and the Spanish Standard Setter ICAC. The project aims to consider what the objectives are of separate financial statements (and whether the same users needs apply as those for consolidated financial statements), and whether there are particular “gaps” in IFRS when considering their application to separate financial statements (e.g. intra-group transactions). EFRAG TEG has had an initial discussion in its September meeting.

Capital Providers’ Use of Financial Statements: The project seeks to develop a practical understanding of how primary users (capital providers) use financial reports for decision making. EFRAG TEG discussed the project at its September meeting.

Full paper

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