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Summary of the July 2016 ITCG conference call

22 Aug 2016

The IASB has published notes to the IFRS Taxonomy Consultative Group (ITCG) conference call held on 28 July 2016.

The ITCG discussed:

  • the Guide to Common Practice Content; and
  • Amendments to IFRS 4: Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts.

For more information, see the summary on the IASB's website.

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Saudi companies need to reveal IFRS progress

22 Aug 2016

Listed entities in Saudi Arabia will have to report under IFRSs as adopted by the Saudi Organization for Certified Public Accountants (SOCPA) as off 1 January 2017. The Saudi Capital Market Authority (CMA) now requires disclosures regarding the entities' progress on adoption. The resolution could be seen as the result of lessons learned from IFRS transition in other jurisdictions that did not have such an overview over public entities’ IFRS readiness (for example in the European Union or Korea).

The CMA has called on listed entities to disclose their IFRS transition progress in three phases.

By 1 September 2016, the companies need to disclose the following information on the Saudi Stock Exchange "Tadawul" website:

  • Whether an IFRS transition plan has been prepared;
  • If no transition plan has been prepared yet, the target date for preparing the plan;
  • Whether an IFRS experienced and specialised external consultant has been hired;
  • If no consultant has been hired, the point of time when this will be done or the reasons for deciding against hiring an external consultant;
  • Whether an entity's internal team responsible for the IFRS transition plan and its implementation has been formed;
  • If no team has been formed, the reasons for not doing so;
  • IFRS transition process difficulties the entity may be facing;
  • The target date for the preparation of the first set of IFRS financial statements and the periods covered by such financial statements.

By 30 October 2016, listed entities need to make the following disclosures:

  • Phase one disclosures updates;
  • Whether the accounting policies necessary for the preparation of IFRS financial statements have been approved;
  • If the accounting policies have not been approved yet, the target date for approving the accounting policies;
  • Where the entity is ready to implement IFRS, it would be exempted from these disclosures but would need to disclose that it has readily available IFRS financial statements and the significant effects of implementing IFRS.

By 31 January 2017, listed entities need to make the following disclosures:

  • Phase one and two disclosures updates;
  • Whether IFRS financial statements have been prepared and the periods covered by these financial statements;
  • If no IFRS financial statements have been prepared yet, the reasons for not doing so and the target date for preparing them;
  • The significant effects on the entity as a result of implementing IFRS (if the effects of implementing IFRS are immaterial this would also need to be disclosed);
  • Any hindrances that might affect the listed entity ability to prepare IFRS financial statements;
  • The extent of the listed entity's readiness to prepare IFRS financial statements for the first quarter of 2017 within the applicable regulatory period.

The CMA also notes that it might request additional disclosures it finds to be necessary in relation to the IFRS transition plan. Please click for access to the announcement on the CMA website.

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New member of the IFRS Foundation Monitoring Board

19 Aug 2016

The IFRS Foundation Monitoring Board (MB), responsible for the oversight of the IFRS Foundation, has published a press release announcing that the Ministry of Finance of the People’s Republic of China (China MOF) is now a member of the Monitoring Board.

In its Final Report on the Review of the IFRS Foundation’s Governance published in February 2012, the Monitoring Board announced that it wants to expand its membership to include up to four members, primarily from major emerging markets. In January 2014, the Brazilian Securities Commission (CVM) and the Financial Services Commission of Korea (FSC) were appointed as members. The application from China triggered an extended screening, however, it was found that the China MOF fulfils the revised membership criteria approved by the Monitoring Board in February 2016. The United States Securities and Exchange Commission (SEC) abstained from the final vote on the membership. Please click for the press announcement on the IASB website.

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Recent integrated reporting developments

19 Aug 2016

A summary of recent developments at the IIRC, IAAER, ACCA, and IAASB.

The International Integrated Reporting Council (IIRC), the International Association for Accounting Education and Research (IAAER), and the Association of Chartered Certified Accountants (ACCA) have published two jointly commissioned research reports on integrated reporting:

  • The first report, Meeting users’ information needs: The use and usefulness of Integrated Reporting, explores how providers of financial capital perceive integrated reporting and its potential for providing decision-useful information through interviews with senior capital market participants and other significant reports users. The report highlights investors’ information needs and identifies the key challenges to widespread adoption of integrated reporting. It is available here on the ACCA website.
  • The second report, Factors affecting preparers’ and auditors’ judgements about materiality and conciseness in Integrated Reporting, explores the issues of materiality and conciseness in integrated reporting from the perspectives of corporate report preparers, company auditors and users of reports. Evidence was gathered about current practices and issues faced by practitioners in determining materiality and conciseness in integrated reporting. The report can be accessed here on the ACCA website.

The International Auditing and Assurance Standards Board (IAASB)’s Integrated Reporting Working Group, dedicated to exploring emerging forms of external reporting, has released a Discussion Paper, Supporting Credibility and Trust in Emerging Forms of External Reporting: Ten Key Challenges for Assurance Engagements. The paper explores the factors that can enhance credibility and trust, internally and externally, in relation to emerging forms of external reports, the types of professional services most relevant to these reports, the key challenges in relation to assurance engagements, and the type of guidance that might be helpful in this context. The paper and several supporting documents are available on the IAASB website.

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FASB webcast (lt blue) Image

Joint IASB and FASB webcast on revenue

15 Aug 2016

On 15 September 2016, the IASB and FASB will host a joint webcast to discuss implementation of the requirements in IFRS 15 'Revenue from Contracts with Customers' and ASC 606.

Topics of discussion will include:

  • an overview of the revenue model;
  • an update on recent implementation activities, including standard-setting and the Transition Resource Group for Revenue Recognition;
  • resources available to help with implementation questions;
  • disclosures; and
  • an audience question-and-answer session.

Please click for more information and registration for the webcast on the IASB website.

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FASB proposes guidance on presentation

12 Aug 2016

The US Financial Accounting Standards Board (FASB) has released an exposure draft proposing changes related to how items are presented in a financial statement as part of the FASB’s larger project to create a new conceptual framework.

The proposed changes address how to group individual recognised items into line items and subtotals and clarify the relationships among assets, liabilities, and equity, along with the effects of related changes on comprehensive income and cash flows.

Originally, the IASB and the FASB decided to review and revise their conceptual frameworks together, however, changed priorities and the slow progress in the project led to the project being abandoned in 2010. In 2012, the IASB reactivated the conceptual framework project as an IASB only project given the multitude of open conceptual issues it is facing in many of its current projects. In May 2015, the IASB published an exposure draft of a new Conceptual Framework in which Chapter 7 Presentation and disclosure discussed concepts that determine what information is included in the financial statements and how that information should be presented and disclosed. In parallel, the IASB is conducting a primary financial statements project examining possible changes to the structure and content of the primary financial statements. The project is in the stage of early research and was last discussed in May 2016.

For more in­for­ma­tion on the new FASB exposure draft, see the press release, a FASB in Focus newsletter, and the ED on the FASB’s website.

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2016 IFRS 'Green Book' coming soon

11 Aug 2016

The IFRS Foundation has announced that 'A Guide through IFRS 2016' will be available in September.

This volume (nicknamed the "Green Book") will include the full text of the Standards and In­ter­pre­ta­tions and ac­com­pa­ny­ing documents (such as the Basis for Con­clu­sions) issued by the IASB as at 1 July 2016 with extensive cross-ref­er­ences and other an­no­ta­tions. This edition does not contain documents that are being replaced or su­per­seded but remain ap­plic­a­ble if a reporting entity chooses not to adopt the newer versions early.

The new re­quire­ments since 1 July 2015 include:

The Green Book will sell for £98 plus shipping for the two book set. More in­for­ma­tion and ordering details are available on the IASB's eIFRS website.

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IASB provides updates to insurance project

10 Aug 2016

The IASB has provided additional information on its upcoming insurance standard related to field work, feedback statement on its Exposure Draft (ED), “Insurance Contracts”, and the effect of board redeliberations.

For more information, see the insurance project page on the IASB’s website.

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World Standard-setters meeting programme available

09 Aug 2016

A draft programme has been released for the upcoming World Standard-setters meeting, which is being held in London on 26-27 September 2016.

A summary of the programme is set out below:

Monday, 26 September 2016 (09:00 - 18:30)

  • Welcome address
  • IASB Technical programme update
  • 2015 Agenda Consultation & IFRS Foundation's review of structure and effectiveness
  • Implementation and education update
  • Reporting financial performance – case study
  • Optional sessions (first round)
    • IFRS 15 Revenue from Contracts with Customers
    • IFRS 9 Financial Instruments
    • IFRS 16 Leases
    • Insurance contracts
    • Translations Adoption Copyright Team presentation
  • Optional sessions (second round)
  • IFRS 15 Revenue from Contracts with Customers
  • IFRS 9 Financial Instruments
  • IFRS 16 Leases
  • IFRS for SMEs
  • Disclosure initiative

Tuesday, 27 September 2016 (08:00 - 13:00)

  • Optional session with the translations adoption copyright team
  • Feedback on reporting financial performance case study
  • Conceptual Framework
  • Working with National Standard-Setters

Papers for the meeting are expected to be made available in due course on the IASB's website.  The WSS meeting will be immediately followed by a meeting of the International Forum of Accounting Standard Setters (IFASS).

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IPSASB releases financial instruments webinar

09 Aug 2016

The International Public Sector Accounting Standards Board (IPSASB) has created a two-part webinar on financial instruments with Part A of the webinar covering the classification and measurement, as well as impairment of financial instruments, and Part B covering hedge accounting.

The webinar serves as an education session in the context of the IPSASB’s current project to update its suite of IPSAS pronouncements on financial instruments (IPSAS 29 Financial Instruments: Recognition and Measurement, IPSAS 28 Financial Instruments: Presentation, and IPSAS 30 Financial Instruments: Disclosures), and provides an overview of the key changes introduced by IFRS 9 Financial Instruments as issued by the IASB.

The webinar can be accessed through the IPSASB website.

Correction list for hyphenation

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