ANNUAL REPORT AND ACCOUNTS 2010 HIGHLIGHTS OF FACULTY ACTIVITY IN 2010

Transcription

1 ANNUAL REPORT AND ACCOUNTS 2010 HIGHLIGHTS OF FACULTY ACTIVITY IN 2010 BUSINESS WITH CONFIDENCE icaew.com/frf

2 CHAIRMAN S REPORT The faculty has continued to drive the debate around Information for Better Markets with the publication of a new report looking at Business Models in Accounting. In addition, the annual conference and PD Leake lecture were both tremendous successes. I am delighted to report another successful year for the faculty as we supported members through a busy year of change. Key changes in International Financial Reporting Standards (IFRS) and UK GAAP reporting have ensured that the faculty was kept very busy in The faculty has provided a range of resources to guide members through the changes while establishing itself internationally as a trusted voice on complex financial reporting issues. Our member offering is constantly evolving to meet the needs of members. In 2010 we held an inaugural nationwide roadshow addressing the challenges and changes in financial reporting. We also developed an iphone and ipad app to raise awareness of the faculty amongst non-members. The increasing range of online resources, including webcasts, standards trackers, technical factsheets and eifrs, helped members keep abreast of regulatory changes and access practical advice on the implications of key changes. In addition, the faculty s acclaimed printed journal, By All Accounts, has addressed the issues on everyone s minds with commentary from private and public sector experts helping to put financial reporting developments into context. The faculty has not been immune to the economic climate, but nonetheless overall membership numbers (excluding complementary members) at the end of the faculty s second year were on target at a respectable 1,671. Overall, faculty finances at the end of its second year were in good health, with a 70% increase in income over 2009 particularly impressive. The net deficit of 89,000 for the year was mirrored by a fall in ICAEW funding of faculty activity compared to 2009 of 88,000. Looking forward to the remainder of 2011, I anticipate that it will continue to be another very busy year for the faculty, given the pace of change in IFRS, the debate over the future of UK GAAP, and the faculty s growing international ambitions. We will continue to represent members interests through our engagement with policy-makers and our representational work, influencing thinking on financial reporting issues at national, European and global level, and of course providing timely and appropriate practical help on technical financial reporting issues to support faculty members. The faculty s aim is to continually improve its services and we would welcome your feedback (frfac@icaew.com). Underpinning much of what the faculty provides for members is the work of a substantial number of volunteers, especially the members of the Financial Reporting Faculty Board, the high level Advisory Group, our Editorial Board and the Financial Reporting Committee. Once again, I would like to take this opportunity to express my sincere thanks to the dedicated volunteers who have contributed much time and effort to the faculty s strategy and output in 2010, and of course to the very capable and dedicated staff team at ICAEW who make it all happen. Andy Simmonds Chairman, ICAEW Financial Reporting Faculty Board 2 Financial Reporting Faculty Annual Report And Accounts 2010

3 HIGHLIGHTS FROM 2010 MEMBERSHIP Faculty membership at 31 December 2010 stood at 1,671 (2009:1,493), including members joining through corporate schemes. TECHNICAL EXCELLENCE The Information for Better Markets thought leadership initiative included a two-day conference on the subject of Adopting IFRS: the global experience. In addition, the 2010 PD Leake lecture was given by Gregory Waymire of Goizueta Business School, Emory University on Financial reporting and financial stability: what can we learn from history? The faculty s Financial Reporting Committee, chaired by Kathryn Cearns of Herbert Smith, has lead responsibility for the technical work of the faculty, and its expert commentary and views are valued by standard setters and other policy-makers. It develops technical policy on behalf of the ICAEW membership and promotes best practice. In 2010, the Committee developed ICAEW responses to over 40 formal consultations, to the IASB, ASB, EC, EFRAG and many other organisations. For example, in August the IASB and the FASB issued a joint exposure draft proposing a new approach to lease accounting. The existing approach has been widely criticised as the current distinction between finance leases and operating leases is vulnerable to structuring. Therefore we welcomed the proposals to replace it. However, while we agreed with the principles underlying the proposals, we felt that further work was needed if the proposals were to be operational in practice. We raised particular concerns over the proposals relating to the lease term, contingent rentals and remeasurement as they involved departures from the Conceptual Framework definitions of assets and liabilities and introduce too much artificial volatility in earnings. We also raised concerns that the proposed hybrid model for lessors would be difficult to apply in practice and did not address concerns about comparability. We proposed a number of solutions in each of these areas, which we believed would enhance the benefits for users and, in many cases, also reduce the cost and complexity for preparers. The IASB are still redeliberating but it appears at this stage that a number of our concerns have been taken on board. INTERNATIONAL REACH With staff resources enhanced during the year, the faculty was able to inaugurate a more active programme of international activity in support of ICAEW strategy and the high proportion of faculty members overseas. For example, in October the faculty was part of the ICAEW delegation participating in the Lord Mayor of London s visit to Mexico City. There is much interest in IFRS in Mexico at present as listed companies move towards full adoption in Meetings were held with, amongst others, the Mexican IFRS Board, the Mexican Stock Exchange and the Banking & Securities Commission. Our aim was to position ICAEW as a global expert in IFRS and to promote both the faculty and ICAEW s IFRS learning and assessment programme. A faculty reception was also held for existing and potential members in Hong Kong in November and the faculty participated in ICAEW events around the IFAC World Congress in Malaysia in the same month. Financial Reporting Faculty Annual Report And Accounts

4 PROFESSIONAL DEVELOPMENT The faculty held 14 events in 2010, attracting more than 1,400 delegates. These covered a wide range of topics, with expert speakers often drawn from the faculty committees. Policy events (free to faculty members and others) included: Response to the ASB consultation on the future of UK GAAP with speakers from ASB Revenue recognition: the debate continues with speakers from IASB and ASB. Update events included the faculty s first roadshow series, Financial reporting update: changes and challenges in Other events included: IFRS Forum (jointly with CIPFA) Managing the transition to IFRS in the public sector Information for Better Markets Conference Adopting IFRS: the global experience PD Leake lecture Financial reporting and financial stability: what we can learn from history? The faculty also held five pilot webinars in Topics included: Practical issues arising from IFRS 3 Accounting under IFRS for PPP/PFI and outsourcing arrangements The future of UK GAAP The Financial Reporting Standard for Medium-sized Entities (FRSME). 4 Financial Reporting Faculty Annual Report And Accounts 2010

5 RESOURCES The faculty built on its extensive online resources, including direct access to eifrs, standards-trackers, webcasts and factsheets and its monthly electronic bulletin with links to the website for further detail around key issues. An iphone and ipad app has also been developed to allow individuals to preview some of the faculty s member-only resources and create wider awareness of the faculty outside of the membership. In addition the faculty published two editions of the faculty journal By All Accounts, plus two public sector supplements and a Hong Kong supplement. Topics covered in the factsheet series included: IFRS 3 revised Summary financial statements IFRS for SMEs: the basics UK distributable profits 2010 IFRS accounts 2010 UK GAAP accounts Revision of defective accounts UK regulation for company accounts. Financial Reporting Faculty Annual Report And Accounts

6 FINANCIAL STATEMENT YEAR ENDED 31 DECEMBER restated Income Faculty subscriptions Events income Sponsorship and advertising 8 2 Miscellaneous 2 Total Income Expenditure Employment costs Events, conferences, roadshows Newsletter, publications, mailings Consultants, research, video Marketing and PR 11 8 Travel and subsistence Internal recharges VAT 9 7 Miscellaneous Defrayment of costs by ICAEW for faculty activities which benefit all ICAEW members (493) (581) Total Expenditure Deficit for the year (89) (56) Deficit brought forward from previous year (154) (98) Deficit carried forward (243) (154) Andy Simmonds Chairman The presentation of the financial statements has been revised to reflect the income and expenditure more accurately figures have been re-analysed in line with this presentation; this has no impact on the reported result. ACCOUNTANTS REPORT TO MEMBERS OF THE FINANCIAL REPORTING FACULTY We have examined the financial information for the year ended 31 December 2010 set out above and tested, on a sample basis, items of income and expenditure shown therein. This financial information has been properly extracted from the books and records of the Institute of Chartered Accountants in England and Wales, of which we are auditors and on whose financial statements we have issued an unqualified audit opinion on 15 March Grant Thornton UK LLP Chartered Accountants and Registered Auditor London 6 Financial Reporting Faculty Annual Report And Accounts 2010

7 COMMITTEE MEMBERSHIP (AS AT 31 DECEMBER 2010) FACULTY BOARD ANDY SIMMONDS, DELOITTE (CHAIR) DONALD BROAD, SMITHS GROUP KATHRYN CEARNS, HERBERT SMITH NEIL HARRIS, REEVES & CO STEPHANIE HENSHAW, FRANCIS CLARK LLP PETER NICOL, HORSFIELD & SMITH BRIAN SHEARER, GRANT THORNTON DANIELLE STEWART, BAKER TILLY FINANCIAL REPORTING COMMITTEE Kathryn Cearns, Herbert Smith (Chair) Andrew Baigent, National Audit Office (Vice-chair) Phil Barden, Deloitte Matt Blake, HMRC Martin Cavey, Cameron Cavey Consulting Jo Clube, AVIVA James Dean, Ernst & Young Robin Freestone, Pearson Peter Hogarth, PwC Rajan Kapoor, Royal Bank of Scotland Group Yvonne Lang, Smith & Williamson Liz Murrall, Investment Management Association Professor Chris Nobes, Royal Holloway Lynn Pearcy, KPMG Trevor Pitman, Fitch Ratings Ken Rigelsford, Deloitte Brian Shearer, Grant Thornton Andy Simmonds, Deloitte Mark Smith, Tomkins Danielle Stewart, Baker Tilly Sondra Tarshis, Mazars Mary Waldner, 3i Group FACULTY ADVISORY GROUP Ian Brindle (Chair) Professor Ray Ball, University of Chicago Stephen Cooper, IASB Pierre Delsaux, European Commission Stig Enevoldsen, formerly EFRAG Teresa Graham CBE Robert Herz, formerly US FASB Peter Holgate, PwC Tom Jones, formerly IASB Paul Lee, Hermes Ian Mackintosh, UK ASB Ruth Picker, Ernst & Young Veronica Poole, Deloitte Mary Tokar, KPMG IFRG Ltd Sylvie Voghel, IFAC EDITORIAL BOARD Phil Barden, Deloitte Matt Blake, HMRC Lynn Pearcy, KPMG Martin Cavey, Sole Practitioner Robert Carroll, Grant Thornton Yvonne Lang, Smith & Williamson Brian Creighton, BDO Ken Rigelsford, Deloitte Stuart Parkinson, Baker Tilly FACULTY STAFF Dr Nigel Sleigh-Johnson, Head of Faculty John Boulton, Technical Manager joined March 2010 Eddy James, Technical Manager joined August 2010 Marianne Mau, Technical Manager Katerina Nicholas, Services Manager Brian Singleton-Green, Technical Manager Financial Reporting Faculty Annual Report And Accounts

8 ICAEW Chartered Accountants Hall Moorgate Place London EC2R 6EA UK T +44 (0) F +44 (0) E frfac@icaew.com icaew.com/frf TECDIG /11