The IPSASB reviewed responses to ED 67, Collective and Individual Services and Emergency Relief. The IPSASB noted the significant issues raised on emergency relief and decided to remove this guidance. The IPSASB agreed some minor changes to the wording of the remainder of the ED and approved Collective and Individual Services (Amendments to IPSAS 19). The IPSASB agreed an effective date of January 1, 2022, to align with the effective date of IPSAS 42, Social Benefits.

Please register on the IPSASB website to ensure that you receive updates when this document and others are published: https://www.ifac.org/user/register
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The IPSASB approved the comprehensive list and categorization of issues identified by stakeholders for accounting for infrastructure assets. The IPSASB instructed staff to refine the flowchart that will be used to analyze these issues, noting that it is a positive development with broader potential.  The revised flowchart and draft additional guidance prepared by staff to address the selected infrastructure assets issues will be considered by the IPSASB at the December 2019 Board meeting.
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The IPSASB approved the staff proposals to add disclosure requirements dealing with materiality and aggregation, to ED 70, Revenue with Performance Obligations, as well as disclosure requirements for transactions arising from the statutorily required provision of services where collection of revenue is not probable. The staff also provided the IPSASB with an update on the Revenue Task Force’s activities, which resulted in revisions to the illustrative examples and other minor amendments to ED 70. These changes will be presented to the IPSASB in December 2019.
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The IPSASB decided that binding arrangements without performance obligations (as defined in draft ED 70) will give rise to a present obligation of the recipient if they contain requirements for enforceable activities or eligible expenditure. Revenue will be recognized either as enforceable activities are completed or eligible expenditure is incurred. The IPSASB also agreed that revenue from capital transfers should be recognized as for any other transfer - that is in accordance with the details of the binding arrangement. The IPSASB also tentatively agreed that transfers that are subject to appropriations of the transfer provider should not be recognized by the transfer recipient until the recipient has control of resources.  Accounting will be subject to jurisdictional and entity- specific factors.
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The IPSASB considered the authoritative sections of ED 72, Transfer Expenses. Subject to minor amendments, the IPSASB agreed the definitions. Accounting for transfer expenses with performance obligations will mirror the treatment in ED 70, Revenue with Performance Obligations. Entities will recognize transfer expenses without performance obligations at the earlier of the point at which they have a present obligation to transfer resources, or the point at which they lose control of the resources they transfer.
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he Leases Task Force Chair reported back to the IPSASB on the Task Force’s discussions in the third quarter of 2019. The IPSASB tentatively formed a view that departure from the lessor accounting requirements of IFRS 16, Leases, would be justified on conceptual grounds. The IPSASB began its consideration of the practical and cost-benefit implications of departing from IFRS 16 by receiving presentations on the implementation of IFRS 16 in the public and private sectors and the statistical accounting perspective. The IPSASB will continue this phase of its deliberations in December.
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The IPSASB considered four issues with a potential impact on accounting - different usages of heritage assets, heritage assets held in trust and the implications of stewardship, depreciation/amortization and impairment, and the treatment of subsequent expenditure on heritage. The IPSASB instructed staff to provide further analysis of these issues at the December meeting. The IPSASB also approved a plan for development of guidance on heritage-related financial reporting issues.
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The next meeting of the IPSASB will be in Abu Dhabi, United Arab Emirates from December 10-13, 2019. For more information, or to register as an observer, visit the IPSASB website.

Recognition as Global Leader
In the special July edition of the Institute of Chartered Accountants of India’s Journal, IESBA Chairman Dr. Stavros Thomadakis was recognized as one of the seven Global Accounting Leaders in celebration of the special Chartered Accountant Day in India. He joins the list of six other rarefied individuals who are commended for their relentless efforts to emphasize the public interest perspective that should guide the work of all professional accountants worldwide.

The International Code of Ethics for Professional Accountants (including International Independence Standards) (the Code) is critical to reinvigorating public trust in the work of professional accountants especially in the post-crisis world we live in. The continuing spate of corporate scandals in jurisdictions around the world have created or added to a trust deficit in businesses and financial and government institutions, and to some extent the profession. The Code establish the standards of behavior expected of professional accountants – the fundamental principles reflect professional accountants' commitment to act in the public interest.

The IESBA congratulates India on honoring Chartered Accountants (CAs) with a special CA Day.

Responding to Brydon Review 
Together with Former International Auditing and Assurance Standards Board (IAASB) Chair, Prof. Arnold Schilder, Dr. Thomadakis submit a response to the independent report of Sir Donald Brydon based on his review of the quality and effectiveness of UK audits. 

In addition to responding to the proposals in the report, the joint response letter highlights how the IESBA and the IAASB act in the public interest to support public confidence in audits of financial statements and other assurance engagements and serve to reinforce the important ethical responsibilities of professional accountants in business (PAIBs) in the external reporting ecosystem.

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The Board approved for exposure proposed revisions to the Code aimed at promoting the role, mindset and behavioral characteristics expected of all professional accountants. 

The Exposure Draft is expected to be released by the end of July 2019 and will be open for public comment for 90 days.

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The IESBA received an update on the Technology Working Group’s Q2 2019 information gathering activities and the Working Group’s preliminary observations from its analysis to date. 

The IESBA will receive a further update from the Working Group at its September 2019 meeting and will consider the Working Group’s final report in December 2019.

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The IESBA considered a first-read draft of proposed revisions to Section 600, Provision of Non-Assurance Services to an Audit Client, including the subsections.
At its September 2019 meeting, the IESBA will consider a revised set of proposals with a view to approving an exposure draft.

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At its March meeting, the IESBA also considered initial proposals for possible revisions to the fee-related provisions in the Code, in particular International Independence Standards Section 410, Fees.

The IESBA will progress these deliberations at its June 2019 meeting as well, including proposed changes to fee-related provisions in the Code.

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The IESBA was briefed on recent IAASB-IESBA coordination activities. Under the leadership of the Boards’ Coordination Liaisons, staff of the IAASB and IESBA jointly developed and implemented a more systematic way to record, inventory and monitor the various coordination work streams. IESBA members exchanged views about the progress made over the last three years with respect to coordination with the IAASB.

The IESBA also received an update on the joint IAASB-IESBA-National Standard Setters (NSS) session which was held in May 2019 in Paris, France. Among other matters, the discussion with the NSS explored how the two Boards might furtherincrease collaboration with the NSS.

The third joint meeting with the IAASB has been scheduled for September 2019.

Revised and Restructured Code Rollout
The 2018 International Code of Ethics which was revised and restructured is now effective. The IESBA received an update on the “rollout” initiatives aimed at promoting awareness and adoption and implementation of the Code, including webinars (March and April 2019) and other significant outreach activities conducted in Q2 2019.

IESBA Collaboration with IFAC
The IESBA was briefed by senior Staff of the International Federation of Accountants (IFAC) and the IESBA on efforts to strengthen and deepen the collaboration between the IFAC and the IESBA to promote adoption and implementation of the Code. Similar efforts are being pursued by IFAC staff with the staff of the other standard-setting Boards that are supported by IFAC.

eCode 
Just days before launch, the IESBA received a final report on Phase 1 of the eCode initiative.The eCode is a web-based tool which includes features and functionalities that emphasize the “building blocks” approach of the Code and its scalability.

The eCode is available free-of-charge at www.IESBAeCode.org. Click here to access tutorial-styled video on the features of the eCode. Read more about the objectives of the eCode initiative, in the April 2019  publication, Preparing for the IESBA eCode. Email us with your views about the eCode at: IESBAeCode@ethicsboard.org.

Stay tuned to learn more about the scope and approach to Phase 2 of the eCode at future IESBA meetings.  

September 16 - 19 | AICPA Offices, New York
December 3 - 6, 2019 | IFAC Offices, New York
Register to attend the IESBA Meeting

Read the minutes and working papers for all our IESBA meetings. They’re a great information source about project progress and how we support and protect the public interest.

August 2019 | San Francisco | American Accounting Association (AAA) Conference
August 2019 | Cape Town | South Africa Institute of Professional Accountants (SAIPA) Conference
August 2019 | Singapore | Institute of Singapore Chartered Accountants (ISCA) Ethics Seminar
August 2019 | Colombia | Instituto Nacional de Concurso Público (INCP) Conference
September 2019 | Baku | Eurasian Accountants and Auditors Forum
October 2019 | China | Meeting with representatives of all stakeholders, including regulators and firms
November 2019 | Romania | Meeting with the Committee of European Auditing Oversight Bodies (CEAOB)
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The IESBA’s multi-stakeholder Consultative Advisory Group (CAG) is an integral and important part of the IESBA's formal process of consultation. Representatives of CAG member organizations provide advice on numerous areas, including the IESBA’s agenda, project timetable, priorities, and technical advice on projects and other matters of relevance to the activities of the IESBA.

Newly appointed CAG Chair, Gaylen R. Hansen, who has served on the CAG representing the US National Association of State Boards of Accountancy (NASBA) since 2010, will chair the next CAG meeting. The next CAG meeting will be held at the IFAC Offices in New York on September 9, 2019.  Visit the CAG webpage to register as an observer and to access the minutes and working papers for all the CAG meetings.

The IPSASB unanimously approved Exposure Draft (ED 69), Public Sector Specific Financial Instruments: Amendments to IPSAS 41, Financial Instruments. ED 69 provides guidance on how to account for several instruments the IPSASB has identified as unique to the public sector.

ED 69 will be published in August 2019 with a comment period until December 31, 2019.

Please register on the IPSASB website to ensure that you receive updates when this document and others are published:https://www.ifac.org/user/register

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The IPSASB unanimously approved ED 68,Improvements to IPSAS, 2019. The IPSASB excluded improvements related to the definition of a business and materiality in the IASB’s, Improvements to IFRS 2018. These Improvements might be considered in the future as separate narrow scope projects.
ED 68 will be published in July 2019 with a comment period until September 30, 2019.

Please register on the IPSASB website to ensure that you receive updates when this document and others are published:https://www.ifac.org/user/register

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Two guest speakers presented different perspectives on lessor accounting. The IPSASB directed the Leases Task Force to assess the rationale for departure from the lessor accounting requirements in IFRS 16,Leases. The Task Force will make recommendations to the IPSASB for consideration at the September 2019 meeting.

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The IPSASB approved a revised project brief for Infrastructure Assets.  Staff will develop a list of issues for review at the September 2019 IPSASB meeting taking account of discussion at the 2017 Public Sector Standard Setters Forum together with a proposed plan for addressing them in accordance with the project roadmap.

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The IPSASB decided that the distinction between operational and non-operational heritage assets is not useful for analyzing either the recognition or measurement of heritage assets. However, the usage of heritage assets could impact measurement. The IPSASB reviewed recognition, measurement and presentation issues raised in responses to the 2017 Consultation Paper,Financial Reporting for Heritage. Staff and the Task Force will provide a plan to the IPSASB at its September meeting, which identifies required heritage-related guidance, the potential impact on IPSAS, and prioritization and timing for delivery.

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The IPSASB approved the core text in Exposure Draft (ED) 70, Revenue with Performance Obligations, which addresses transactions where an entity earns revenue in exchange for goods or services, and also includes the public sector performance obligation approach. The IPSASB approved a list of examples, including public sector specific examples, to illustrate the principles in ED 70 and instructed staff to continue to develop disclosures, illustrative examples, and the basis for conclusions.

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The IPSASB confirmed that revenue that arises from transactions that are not a result of a binding arrangement shall be recognized when receivable. In September, the IPSASB will consider the relationship between performance obligations and present obligations and will further discuss when a liability of the resource recipient arises for enforceable arrangements that do not have performance obligations as defined in ED 70.

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The IPSASB confirmed its tentative decision in March to focus on transactions where entities transfer resources to recipients, without receiving goods or services in return. The IPSASB reviewed the Government Finance Statistics (GFS) Manual, concluding that the GFS definition of a transfer encapsulated the IPSASB’s thinking, and decided to base the scope of the ED on the GFS definition. The IPSASB also discussed how to address subsidies, appropriations, levies, subsequent measurement and examples in the ED.

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• A podcast highlighting key points of the June 2019 meeting is now available here.

• The next meeting of the IPSASB will be in Lisbon, Portugal from September 24-27, 2019. For more information, or to register as an observer, visit the IPSASB website.

Robust and lively discussions on key IESBA projects and significant national developments featured prominently in the IESBA’s meeting with national ethics standard setters from 14 jurisdictions in Paris last week.

In addition, the IESBA held a successful joint session with the International Auditing and Assurance Standards Board and national audit and ethics standard setters to explore enhancing trialogue and mutual engagement. The event also included a session on UK audit market developments and discussion on the developments from an international perspective.

During this visit, the IESBA and IAASB, in association with the French professional accountancy organizations, Compagnie Nationale des Commissaires aux Comptes and Conseil Supérieur de l'Ordre des Experts-Comptables, hosted a successful two-day international working conference. The conference drew more than 80 delegates who explored how the two standard-setting boards can best respond to the challenges related to less complex entities in their standard-setting activities.

While in Paris, IESBA representatives also met with members of the regulatory community, international organizations and firms, including Haut Conseil du commissariat aux comptes, European Securities and Markets Authority, and the Organisation for Economic Co-operation and Development, as part of its outreach activities.

IESBA staff has released an updated Q&A publication incorporating additional frequently asked questions. The publication is aligned to the restructured version of the revised Long Association provisions, which came into effect for audits of financial statements for periods beginning on or after December 15, 2018.

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At its March meeting, the IESBA also considered initial proposals for possible revisions to the fee-related provisions in the Code, in particular International Independence Standards Section 410, Fees.

The IESBA will progress these deliberations at its June 2019 meeting as well, including proposed changes to fee-related provisions in the Code.

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The IPSASB unanimously approved the Consultation Paper (CP), Measurement, which will be published in April 2019, and will be open for comment until September 30, 2019. The Consultation Paper includes an illustrative Exposure Draft (ED) which indicates the IPSASB’s current thinking on the scope and format of an IPSAS on Measurement. A full ED will be issued in due course.

Please register on the IPSASB website to ensure that you receive updates when this document and others are published: https://www.ifac.org/user/register

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The IPSASB reopened discussions on the Heritage project. The IPSASB considered the background to the project and the issues that had been raised by respondents to the 2017 Consultation Paper, Financial Reporting for Heritage. The project will focus on recognition, with measurement issues being considered in the complementary project on Measurement.

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The IPSASB adopted the working title Revenue from Performance Obligations, for the ED and tentatively approved it. The IPSASB clarified that the scope applies to binding arrangements with purchasers that include performance obligations. The IPSASB instructed staff to consider the approach to transactions where the collectability of consideration is not probable. Staff will continue work on non-authoritative illustrative examples to ensure that these are suitable for the public sector.

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In the context of public sector-specific transactions, the IPSASB confirmed that legislation and reductions in future funding are the two enforcement mechanisms to be included in the ED, Revenue from Performance Obligations. The IPSASB also noted that enforceability in a binding arrangement is a two-way relationship. In a revenue context, enforcement mechanisms relate to the purchaser’s ability to enforce the fulfilment of performance obligations by the resource recipient. The IPSASB instructed staff to consider alternative terms for ‘distinct’ in articulating the concepts of ‘distinct goods and services’ and ‘distinct promises’ for performance obligations. 

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The IPSASB considered the scope of the draft ED, Grants, Contributions and Other Transfers. The IPSASB tentatively agreed to adopt a narrower scope for the project, excluding commercial transactions. Staff were instructed to develop definitions for the transactions within this revised scope, and to consider the accounting treatment of contracts that are described as grants. Recognition, measurement and presentation requirements will be developed in parallel with the two Revenue EDs highlighted above.

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The IPSASB further considered its approach in light of the response to ED 64, Leases. The IPSASB directed the Leases Task Force to firstly assess the rationale for departing from the lessor accounting requirements in IFRS 16, Leases. The IPSASB will not consider the approach to concessionary leases until decisions have been made on lessor accounting. The Task Force will make recommendations to the IPSASB for consideration at the June 2019 meeting.

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The IPSASB reviewed the IPSAS-IFRS Alignment Dashboard, which reflects the extent of alignment with current International Financial Reporting Standards and identifies pronouncements that are public sector specific. The IPSASB directed some minor presentational changes.

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The IPSASB published its Strategy and Work Plan 2019-2023 in late February. At a time of increasing momentum for IPSAS adoption and implementation globally, the Strategy and Work Plan 2019-2023 sets out the Board's work intentions and priorities for the next five years. 

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• A podcast highlighting key points of the March 2019 meeting is now available here.

The next meeting of the IPSASB will be in Toronto, Canada from June 18-21, 2019. The IPSASB Consultative Advisory Group will meet on June 17, 2019 Toronto, Canada. For more information, or to register as an observer, visit the IPSASB website (www.ipsasb.org).

Hard to believe, but less than 6 months to go before the revised and restructured Code becomes effective! 
To support its roll-out, we’re holding two global 90 minute webinars suitable for any professional using, enforcing, teaching or engaging with the Code.

• Thursday March 28, 2019 at 7:00 AM EST; and
• Wednesday April 17, 2019 at 10:00 AM EST.

Additionally, learn more about the IESBA’s revised and restructured Code; and the importance of having an Ethics Code for professional accountants and earn yourself CPE credits!
For more and latest support materials, continue to check our dedicated webpage.

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We congratulate the International Auditing and Assurance Standards Board (IAASB) for issuing proposed Quality Management standards!
The proposed standards reinforce the need for firms to comply with the fundamental principles of ethics and independence requirements. They will make a meaningful contribution to enhanced audit quality.
We encourage all our stakeholders to provide their input to the IAASB’s exposure draft, which asks important questions about ethics and independence matters. The link below will take you to the IAASB’s consultation page. Make your voice heard!

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The IESBA’s proposed eCode will be a major new way of engaging with the Code of Ethics. At our last meeting the IESBA received a preview of its potential to provide users with a great experience that will also facilitate consistent application and enforcement.
We anticipate launching the e-Code’s first phase by June 2019, coinciding with the revised and restructured Code’s effective date.

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The IESBA^® approved Terms of Reference for its Technology Working Group. As part of a multi-phased approach, the Working Group will engage widely with its stakeholders to gather activity information, including in relation to artificial intelligence, robotic process automation, data analytics and big data.
We’re looking forward to the Working Group’s update at our next meeting in March 2019.

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On November 8, 2018, our Chair, Dr. Stavros Thomadakis, gave a keynote address in Sydney at the Accounting Professional & Ethical Standards Board (APESB) dinner. Celebrating great news that the Restructured International Code of Ethics has been incorporated into Aussie ethical standards, Stavros shared his thoughts about the Code’s essentials, its global positioning, and the challenges and opportunities faced by both standard setters and Code users.

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Read the minutes and working papers for all our IESBA meetings. They’re a great information source about project progress and how we support and protect the public interest.
The IESBA’s multi-stakeholder Consultative Advisory Group (CAG) meets a week before the board to provide strategic input on our meeting agenda materials, as well as our projects and initiatives more broadly. You can also read all the CAG’s minutes and working papers.