The Financial Reporting Review Panel ("FRRP") says it is concerned about how companies are applying the requirements of IFRS 8 Operating Segments.  Its press release includes what the FRRP consider to be common themes of non-compliance from its enquiries to date:

• only one operating segment is reported, but the group appears to be diverse with different businesses or with significant operations in different countries;
• the analysis of operations set out in the narrative report differs from the operating segments in the financial statements;
• the titles and responsibilities of the directors or executive management team imply an organisational structure which is not reflected in the operating segments; or
• the commentary in the narrative report focuses on non-IFRS measures whereas the segmental disclosures are based on IFRS amounts.

The FRRP has produced a list of questions for Boards to consider in their application of IFRS 8.

Companies have told the Financial Reporting Council ("FRC") that Merger and Acquisition accounting is costly and difficult, yet investors say that the resulting information on acquisitions is not useful.  An FRC study suggests that a possible reason for this is that IFRS 3 Business Combinations has been poorly applied by companies due to unfamiliarity with its requirements and the complexity of valuing intangible assets such as brands and customer relationships.

The FRC notes that additional guidance from the IASB (from its May 2009 exposure draft 'Fair Value Measurement') and the International Valuation Standards Council (from its January 2009 exposure draft 'Valuation of Intangible Assets for IFRS Reporting Purposes') should facilitate more reliable valuations of intangible assets in respect of future acquisitions.

The FRC intends to conduct further interviews with investors and other stakeholders in 18 months' time to assess whether the information about acquisitions in annual reports and accounts has improved in quality and proved to be useful.

The IASB is requesting comments on a section of the proposed new standard to replace IAS 37, dealing with the measurement of provisions.

This exposure draft is a limited re-exposure focused on the following aspects of proposed measurement guidance:

• a high-level measurement objective for liabilities within the scope of IAS 37 and application of that measurement objective. As part of this project the IASB has decided to mandate the use of expected value to measure all liabilities, including single obligations (e.g., lawsuits), but the IASB is not inviting comments on this as part of the exposure draft;
• whether obligations involving services (e.g., decommissioning) should be measured with reference to the price that a contractor would charge to undertake the service on behalf of the entity i.e., including a profit margin; this would be irrespective of the entity’s intentions with regard to settling the obligation, i.e., in-house or external; and
• whether to continue current IAS 37 accounting for onerous sales and insurance contracts via a limited exception to the proposed measurement requirements.

The IASB has invited comments by 12 April 2010.