ESMA Replies to IASB Agenda Consultation
The European Securities and Markets Authority (ESMA) has posted to its website a comment letter on the IASB's Agenda Consultation 2011. Even though ESMA believes that this concultation can provide additional input for the agenda setting process, it does not "consider the consultation to be the basis on which to determine what projects, and the scope of these, the IASB should work on for the coming years".
Apart from requesting a period of calm in changes to accounting standards (which has been asked for in many comment letters to the IASB) and pointing out that the major projects the IASB is currently working on (revenue recognition, leases, insurance contracts, financial instruments) will "go well beyond 2011", ESMA comments that the IASB has pressing business on its hands that does not need to be consulted about.
Three aspects ESMA mentions specifically:
- A fundamental debate consisting of conceptual and practical issues on what constitutes performance is necessary and should be undertaken by the IASB as soon as possible;
- The IASB should restart its Financial Instruments with Characteristics of Equity project identifying the characteristics that should be present in an instrument for it to be classified as either an equity or a liability instrument; and
- We urge the Board to provide guidance in the area ofBusiness Combinations Between Entities Under Common Control and Extractive Industries.