1 ifrs accounting in europe thomas oversberg project manager brussels - 5. november 2007
TRANSCRIPT
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IFRS Accounting in Europe
Thomas Oversberg
Project Manager
Brussels - 5. November 2007
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Agenda Who is EFRAG? How do IFRSs become European law (the
Endorsement Process)? Lease Accounting in Europe
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EFRAG - background European Financial Reporting Advisory
Group (EFRAG) Technical group to advice European
Commission (EC) on IFRS Independent, private sector body, founded
in 2001 by European organisations of preparers and users of financial statements and auditors, as well as European standard setters
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EFRAG‘s role Proactive contribution to the IASB and
IFRIC – Comment Letters EU Commission - Endorsement advice Stimulate thought leadership – PAAinE European Coordination - CFSS
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EC – EFRAG Working Arrangement The Working Arrangement of March 2006
formalised EFRAG‘s role as a technical advisor to the EC:
"EFRAG will provide advice to the Commission on all issues in relation to the application of IFRS in the EU.”
Specifically on: Endorsement advice Proactive input to IASB/IFRIC
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Technical Expert Group
(TEG)
Supervisory Board
EFRAG‘s structure
CFSS
User Panel
Secretariat
INSURAN WG SME JWG
JV WG
Fin Inst WG
CONCESSION WG
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EFRAG‘s due process Members of the TEG must not consider
themselves as representing sectorial and/or national interests but shall be guided by the need to act in the European Interest.
EFRAG has an open and transparent due process, which allows all European constituents to provide input for consideration of EFRAG.
All technical discussions held in public meetings. Invitation to comment on all EFRAG draft
publications.
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EFRAG‘s due process (cont.) Publication of basis of conclusion for
EFRAG on endorsement advice. Publication of TEG agendas and summary
minutes of its meetings. Publication of the final endorsement
advice to the Commission. Publication of final comment letters on
IASB consultation documents, and other EFRAG positions.
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Endorsement Process The “original” endorsement process –
Endorsement with supervision SARG – Endorsement with supervision and
review of EFRAG’s advice The future endorsement process –
Endorsement with scrutiny
The Endorsement Process
Endorsement with Supervision
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The Endorsement Process
Endorsement with SARG
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SARG
The Endorsement Process
Endorsement with scrutiny
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Endorsement Situation Until 2007, Europe has endorsed all IASB
Standards and Interpretations, except: IAS 39 – Carve Out IFRIC 3 Emission Rights – Subsequently
withdrawn by IASB In 2007, the endorsement process was
delayed due to concerns over: IFRS 8 Operating Segments and IFRIC 12 Service Concession Arrangements
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Endorsement Situation (cont.)
As of 16.10.2007
www.efrag.org
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IFRS 8 – State of play The IASB published IFRS 8 on November 30, 2006 EFRAG issued its positive endorsement advice on
January 16, 2007 The Accounting Regulatory Committee (ARC)
unanimously supported endorsement in its meeting on February 2, 2007
The European Parliament (EP) raised some concerns on IFRS 8.
In April 2007, the EP and the European Commission (EC) agreed to carry out an impact assessment of IFRS 8.
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IFRS 8 – State of play (cont.) Impact assessment published by the EC in
September 2007. In October 2007 the ECON committee of the EP
drafted a positive resolution, however requesting: Review of IFRS 8 implementation in 2011 by the EC Impact assessment on other standards and
interpretations by the EC Voting on the resolution expected in the
November 2007 EP session. Publication in Official Journal soon thereafter.
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IFRIC 12 – state of play The IASB / IFRIC published IFRIC 12 on November
30, 2006 EFRAG submitted – after considerable debate – a
positive endorsement advice to the EC on March 23, 2007.
Meeting between Spain and IASB on that issue. The ARC discussed IFRIC 12 several times so far,
but has not been asked by the Commission to vote on it, i.e. the EC has so far not used its right of initiative.
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PAAinE Pro-Active Accounting Activities in Europe
(PAAinE) OBJECTIVES:
Partnership with National standard setters High quality proactive input to IASB(+FASB) More consistent messages to IASB Create debates in Europe Involvement in the convergence work Monitor work of IASB & FASB Thought leadership Better utilisation of European resources
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PAAinE publications so far
Conceptual Framework
Stewardship Revenue Recognition
Performance Reporting
Future publications:
Performance Reporting II
Conceptual Framework II
Equity / Liability
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Lease Accounting in Europe 4th Directive does not contain any specific
guidance on lease accounting European countries developed often tax driven
systems (such as Germany, Belgium…). IAS 17 increased comparability to a certain
extent, but resulted in interpretation issues on terms used.
The first standard to apply “substance over form” concept.
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Leasing – recent developments Amendments to leasing standard as part
of the annual improvements project Leasing in the SME ED The IASB / FASB Leasing Project
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Annual Improvements Project IAS 17:
Classification of leases of land and buildings Contingent rents EFRAG agrees with the proposed amendments.
IAS 40: Investment property held under lease EFRAG agrees with the proposed amendment.
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Leasing Project EFRAG welcomes that the IASB & FASB intents to tackle
lease accounting and its current issues. EFRAG appreciates that any future solution needs to be
aligned to the framework and the assets / liabilities definitions.
EFRAG cautions to develop a conceptually perfect solution, which is not practical to implement for the vast majority of contracts and companies.
Substance of lease transactions need to be considered. EFRAG supports convergence, but not for the sake of it, but
rather to get the best accounting solutions.
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Concluding remarks Speaking with one voice and submitting good
and thoughtful arguments towards the IASB has proven to be of utmost importance.
Providing input and comments to EFRAG ensuring that EFRAG is aware of issues and positions and able to fulfil its role European role is paramount and should be a high priority for users, preparers, standard setters and other constituents, in short: YOU.
36www.efrag.org