Outcomes From Recent Capital Markets Advisory Committee Meeting

Friday, April 20, 2012 Print Email

The IASB has released a summary of the Capital Markets Advisory Committee (CMAC) meeting which was held in London on 22 February 2012. The CMAC was previously known as the Analyst Representative Group (ARG) and is a group of professional financial analysts who regularly meet with members of the IASB to provide the views of professional investors on financial reporting issues.

The topics discussed at the meeting included:

o EFRAG/FASB disclosure framework project — the committee was given a status update from the EFRAG and FASB on their respective disclosure framework project. Both have scheduled to release separate discussion papers in the second quarter of 2012.

o Financial instruments — the committee shared their views on the IASB's and FASB's current tentative decision on the 'three-bucket' approach for the impairment of financial assets measured at amortised cost.

o Leases — the committee voted on which of the three approaches on subsequently measuring lessee's right-of-use asset will be the most approriate. The votes were divided amongst the members with a slight edge going to the 'underlying asset' approach, which treats a lease contract as being equivalent to the purchase of the underlying asset being leased and is financed separately.

o ESMA's materiality consultation paper — a presentation was given by the ESMA on their November 2011 consultation paper Considerations of materiality in financial reporting. The CMAC responded with a concerned whether the materiality guidance would challenge existing accounting requirements.

o Investment entities — an overview of proposals on investment entities was given to the CMAC.

o Revenue recognition — CMAC members were updated on the status of the revenue recognition project. Examples of proposed disclosures and results from a Securties Analysts Association of Japan's survey were given. The committee discussed the need for the boards to better understand the types of information on revenue that entities can provide at a reasonable cost.

o Post-implementation review of IFRS 8 — the committee discussed whether IFRS 8 achieved its stated objectives and whether it has improved financial reporting.

o IFRSs 10-12 effective date — The general view of CMAC members was that it would not be significantly detrimental to add an additional year to the effective dates.

Source: Deloitte

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