21 December 2015

EBA/ FEE: Comments on the IASB’s consultation paper Request for Views - 2015 Agenda Consultation

EBA

The EBA welcomes the completion of important standards since the last agenda consultation, such as IFRS 9 Financial Instruments. In this regard, the EBA would support more prominence being given to the completion of the existing major projects, such as the revised standards on Insurance Contracts and Leases as well as the Conceptual Framework and to prioritise the following projects that are at the development stage: Dynamic Risk Management, Financial instruments with Characteristics of Equity and the Disclosure Initiative.

In addition, the EBA would welcome more transparency by the IASB on the process for developing the work plan and the decisions taken on the selection of projects, timeline and resource allocation. This would help constituents to better understand the basis for the IASB’s decisions and should result in a wider acceptance by the public, particularly that the IASB is addressing the questions that relate to delivering change at the right pace.  

Full comment letter

FEE

FEE believes it is important that the Board’s immediate priority remains on the completion of the final outstanding key standard, namely Insurance Contracts that has been under development for a long period of time (provided that the new standard on Leases will be finalised and published soon).

FEE also believes that it is important that the IASB undertakes research projects where there is a need for improving financial reporting. Therefore, FEE welcomes the IASB’s research projects. FEE reiterates its support to the IASB’s Disclosure Initiative as FEE believes that this research project is at the heart of the evolution of financial reporting in the future. In the FEE Cogito Paper: The Future of Corporate Reporting1 FEE refers to the importance of the Disclosure Initiative to ensure that financial reporting maintains its relevance amongst its intended users.

In addition to the Disclosure Initiative, FEE welcomes the IASB’s efforts to undertake research projects on other key areas for financial reporting, especially the research on Primary Financial Statements, Financial Instruments with Characteristics of Equity, Goodwill and Impairment, and Business Combinations under Common Control. FEE assesses that these projects are important and urgent and FEE believes that the IASB should prioritise all four of them over other research activities. In FEE´s opinion, the current IFRS literature does not provide adequate guidance on these issues which does not result in a good reflection of the underlying economic effects of such transactions and events. Therefore, FEE strongly believes that addressing these matters will enhance the quality of financial reporting.

In light of limited resources, FEE supports the Board’s decision to remove from its agenda the two inactive projects: Foreign Currencies and High Inflation; in addition, FEE would support the removal of the third inactive project on Extractive Activities, Intangible Assets, Research and Development provided that the IASB assesses whether or not the current standard (IFRS 6 Exploration for and Evaluation of Mineral Resources) provides adequate guidance for these type of transactions. FEE also believes that the Board should not prioritise any research work on the Income Taxes, and Provisions, Contingent Liabilities and Contingent Assets research projects over other research projects.

Regarding the need to add more projects to the agenda, FEE asks the IASB to consider adding a longer term project on its agenda to review current IFRS literature in light of the revised Conceptual Framework, once the revised framework is published, to identify any potential inconsistencies. In line with FEE´s comments on the IASB’s ED: Conceptual Framework for Financial Reporting, even though FEE supports the Board’s decision not to amend immediately the current standards that conflict with the revised Conceptual Framework, FEE believes that there is value for the IASB to take stock of the potential conflicts. 

Full comment letter

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