Please find Luxembourg Tax update Q2 2020.  Click here to view the document

PKF Worldwide Tax Newsletter Q2 June 2020  

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We provide an overview of IFRS 9 and IFRS 15 : what they mean, major changes you should be aware of, how you might be affected and how we can help.

PKF comments on new tax measures for 2021  

Please click here to read PKF DAC 6 Newsletter 

50th Anniversary Film

International Financial Reporting Standards (IFRS) are developed by the International Accounting Standards Board (IASB) based in London. Before new as well as revised standards become applicable in the EU for companies preparing their accounts under IFRS ‘as adopted by the EU’, these standards go through an endorsement process where EFRAG, the European Financial Reporting Advisory Group, plays a key role.

The main role of EFRAG is to advise the European Commission on whether new IFRS and revisions to existing standards should be endorsed in Europe. The criteria for endorsement of new or revised IFRS are:

1. Technical: do they meet the criteria of understandability, relevance, reliability and comparability of the financial information needed for making economic decisions, e.g. investment decisions, and are they not contrary to the principle of the true and fair view set out in the European accounting directives?
2. Qualitative: are they conductive to the European public good?

 

EFRAG is a private not-for-profit association based in Brussels and was established in 2001 with the encouragement of the European Commission to serve the public interest. Member organisations are mainly European stakeholder organisations in the areas of accounting, business and finance, and national accounting organisations in European countries. Observers at the EFRAG board are the European Commission, the European Central Bank, the European Supervisory Authorities (EBA, EIOPA and ESMA) and Better Finance (representing private investors and financial services users).

The mission of EFRAG goes beyond the pure endorsement of new IFRS. EFRAG actively develops and promotes European views in the area of financial reporting through research projects and discussion papers, comment letters to IASB proposals and contribution to all IASB projects, influencing and improving new accounting and reporting standards. As an example, EFRAG established in 2018 a European Corporate Reporting Lab to monitor and promote reporting best practices. The first project of the European Lab relates to climate-related reporting. The overall objective of EFRAG’s activities is to serve the European public interest.

The main technical activities of EFRAG in 2018 are summarised hereafter:

Endorsement-related work

Of particular interest to the accounting profession is the updated  ‘Endorsement Status Report EFRAG’ regularly publishes on its website. The report provides an overview of IFRS standards and interpretations applicable and those not yet applicable in the EU.

IFRS 17 Insurance Contracts dominated EFRAG’s endorsement-related work in 2018.  IFRS 17 is almost certainly EFRAG’s most challenging endorsement advice to date, reflecting the need for in-depth impact assessment, the complexity of the Standard and some of the products it addresses, and the diversity of insurance accounting practices in Europe. EFRAG’s evidence-gathering activities included an unprecedented programme of 60 case studies with individual insurers to evaluate the expected costs, benefits and potential wider effects of the new Standard.

The EC timetable requested EFRAG’s advice by the end of 2018 but the project has since taken a different course. EFRAG’s case study and other activities identified several concerns and EFRAG highlighted to IASB some aspects of IFRS 17 that merit further consideration. Following these comments by EFRAG, IASB will indeed consider some amendments to the Standard.

Despite the various concerns raised with IFRS 17, there is however widespread agreement on the need for a high quality new insurance standard. EFRAG will continue to play its part in achieving this.

Influencing IFRS

EFRAG has been reappointed to the IASB’s Accounting Standards Advisory Forum - a key important forum to bring European views to the international debate.

One of the 2018 highlights has been EFRAG’s work on the IASB’s Discussion Paper Financial Instruments with Characteristics of Equity (FICE). EFRAG published an early draft comment letter in August and conducted an ‘early-stage impact analysis’ with the objective to assess the wider effects and potential unintended consequences of changes to rules on FICE reporting.

EFRAG Research Work

In November 2018 EFRAG delivered a comment letter to the EC on Equity Instruments – Impairment and Recycling as part of its ongoing investigations as to whether the IASB’s new requirements on accounting for equity investments are fully conducive to long-term investing and to Europe’s sustainable finance aims.

Furthermore, EFRAG regularly publishes research papers on its website. Recent examples are:

• Interaction of IFRS 9 and long term investment decisions
• Equity instruments-impairment and recycling
• Goodwill impairment test-can it be improved?

For further information, please visit www.efrag.org or contact your local PKF office.

Jean Medernach, March 2019

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PKF Audit & Conseil (PKF), the Luxembourg-based audit firm and the University of Luxembourg have signed an agreement to provide fellowship and internship opportunities to students enrolled in the Master in Accounting and Audit, offered at the Faculty of Law, Economics and Finance (FDEF). We are a member of the PKF International network of accountancy firms with over 220 member firms in 150 countries.

According to the three-year agreement, signed in June 2022, the student with the highest grade point average at the end of the first year of the Master in Accounting and Audit will be given the opportunity to complete a fellowship programme with PKF. The fellowship programme includes a stipend, paid in two instalments, to support the student during his or her final academic year.

The student who has received the fellowship will also be invited to participate in the accompanying internship programme within PKF’s Audit Department. In the event that the student cannot participate in the internship, another student from the Master programme will be selected.

📢 “We are delighted to now count PKF Audit & Conseil among our network of valued partners. For our students in the Master of Audit and Accounting, this represents a unique occasion to start building privileged relationships within the industry at a very early stage in their careers,” commented Prof. Katalin Ligeti, Dean of the FDEF. “We thank PKF for offering this opportunity to our students.”

📢 Jean Medernach, Partner of PKF, added, “We are pleased to collaborate with the University of Luxembourg and to offer an award to deserving students in the Master of Accounting and Audit. We also offer the award winning students the possibility to join PKF as an intern during their master. The reinforcement of the PKF team by young graduates is a key element in our HR strategy with the ambition to create an environment where our people can constantly develop their skills and knowledge in a respectful environment and feel part of a multicultural team.”

 

Following the implementation of the new Law of August 7, 2023 on ASBLs and foundations, the following article provides some details on the main legislative changes.

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Click here for our summary of the Law Projet number 8286, introducing compulsory auditing of "large holding companies".