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News

IFRS - IASB Image

IASB updates work plan in view of COVID-19 developments

Mar 27, 2020

On March 27, 2020, the International Accounting Standards Board (IASB) updated its work plan. The IASB postponed to May 2020 the publication of several narrow-scope amendments to IFRS Standards originally planned for March and April 2020. This consolidation of publications is intended to facilitate more efficient post-publication procedures by the stakeholders. The work plan has been updated accordingly.

Below is an analysis of all changes made to the work plan since our last analysis on March 21, 2020. We also note the projects the IASB intends to move forward with in April 2020.

Standard-setting projects

  • No changes

Maintenance projects

Research projects

Other projects

The revised IASB work plan is available on the Board's website.

IFRS - IASB Image

IASB publishes statement on IFRS 9 and COVID-19

Mar 27, 2020

On March 27, 2020, the International Accounting Standards Board (IASB) published a document responding to questions regarding the application of IFRS 9, "Financial Instruments" during the period of enhanced economic uncertainty arising from the COVID-19 pandemic.

The document is intended to support the consistent application of requirements in IFRS Standards. Therefore, it highlights requirements within IFRS 9, Financial Instruments that are relevant for companies considering how the pandemic affects their accounting for expected credit losses; it does not change, remove nor add to, the requirements of IFRS 9.

Review the press release and document on the IASB's website.

United States Image

CARES Act would provide optional temporary relief from CECL accounting

Mar 27, 2020

On March 27, 2020, US President Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which provides relief from certain accounting and financial reporting requirements under U.S. GAAP. However, until actions are taken by the SEC or the FASB, the provisions of the CARES Act are not amendments to US GAAP.

Section 4014 of the CARES Act offers optional temporary relief from applying the FASB’s current expected credit losses (CECL) standard (ASU 2016-13) for certain entities. Any guidance developed by the SEC or FASB to address the CARES Act’s impact on US GAAP would most likely take into account both the scope and length of any optional deferral, will likely take into account whether any deferral should apply to all entities that were otherwise required to adopt the CECL, and would more clearly define the date of adoption if an entity chose the deferral. For more information, see Deloitte's related Heads Up newsletter as well as the CARES Act, which is available on the US Senate's website.

Other than US Senate and Congress, the IASB has concluded that the existing requirements within IFRS 9, Financial Instruments (including the IASB's CECL model) need not be changed, removed nor added to. On Friday, the IASB only released a statement to support the consistent application of requirements in IFRS 9.

The IASB's position is supported by several other communications on the application of IFRS 9 during the COVID-19 crisis.

  • The Office of the Superintendent of Financial Institutions (OSFI) in Canada has released a statement that includes guidance on Applying IFRS 9 in extraordinary circumstances that will allow companies to remain compliant with IFRS as issued by the IASB
  • the Prudential Regulation Authority (PRA) of the Bank of England has released a statement Covid-19: IFRS 9, capital requirements and loan covenants that offers an annex with guidance consistent with IFRS 9 to assist firms in making well-balanced and more consistent ECL estimates and in determining how to treat payment holidays and similar schemes for accounting and regulatory purposes

All statements agree that IFRS 9 is principles-based and requires the use of experienced credit judgement and that the current situation does not lead to an undifferentiated, automatic transfer of financial instruments from Level 1 to Level 2 or even Level 3.

Earlier last week, ESMA already concluded that the principles-based nature of IFRS 9 includes sufficient flexibility to faithfully reflect the specific circumstances of the COVID-19 outbreak and the associated public policy measures.

CPAB - Assurance Image

CPAB audit quality insights report: 2019 Annual inspections results

Mar 27, 2020

On March 27, 2020, the Canadian Public Accountability Board (CPAB) released its annual inspections results noting an overall increase in significant findings in the audits of the 35 public accounting firms it inspected in 2019.

All participating audit firms must enhance their commitment to continuous improvement at every level of their organization and embed a culture of quality to deliver consistent, high quality audits.

Review the report on the CPAB's website.

IAASB - Assurance Image

IAASB web page offers guidance for auditors during the coronavirus pandemic

Mar 27, 2020

On March 27, 2020, the International Auditing and Assurance Standards Board (IAASB) created a COVID-19 web page to help stakeholders, and the larger accounting community, navigate some of the challenges ahead.

The COVID-19 pandemic is a global health and humanitarian crisis. Beyond the significant challenges that lay ahead in all facets of life, the pandemic has the potential to significantly impact the way that audits are undertaken.

Review the following on the IAASB's website:

CPAB - Assurance Image

CPAB COVID-19 Audit implications

Mar 27, 2020

On March 27, 2020, the Canadian Public Accountability Board (CPAB) released a message that acknowledges the implications of COVID-19 on Canadian public company audits. They recognize that the situation is highly fluid, and that new issues and risks will emerge.

The COVID-19 pandemic is impacting employees, the economy, mobility and financial systems. It is likely that auditors may encounter scope limitations or complex auditing and accounting issues.

Review the message and audit implications on the CPAB's website.

ESMA (European Securities and Markets Authority) Image
covid1 Image

ESMA statement on the accounting implications of the COVID-19 economic support and relief measures

Mar 25, 2020

On March 25, 2020, the European Securities and Markets Authority (ESMA) issued a public statement on some accounting implications of the economic support and relief measures adopted by EU Member States in response to the COVID-19 outbreak. The measures include moratoria on repayment of loans and have an impact on the calculation of expected credit losses in accordance with IFRS 9.

ESMA has issued the statement in order to promote consistent application of IFRSs in the EU and avoid divergence in practice on the application of IFRS 9 Financial Instruments in the specific context of the COVID-19 outbreak, specifically as regards the calculation of expected credit losses and related disclosure requirements. In ESMA’s view, the principles-based nature of IFRS 9 includes sufficient flexibility to faithfully reflect the specific circumstances of the COVID-19 outbreak and the associated public policy measures.

Review the statement on the ESMA website.

The European Banking Authority (EBA) also issued a related statement regarding the prudential framework and accounting implications of COVID-19. The two statements are consistent as regards financial reporting.

Review the statement on the EBA's website.

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SEC modifies Covid-19 exemptive order

Mar 25, 2020

On March 25, 2020, the Securities and Exchange Commission (SEC) announced that it is extending the filing periods covered by its previously enacted conditional reporting relief for certain public company filing obligations under the federal securities laws, and that it is also extending regulatory relief previously provided to funds and investment advisers whose operations may be affected by COVID-19.

In addition, the SEC’s Division of Corporation Finance issued its current views regarding disclosure considerations and other securities law matters related to COVID-19.

Review the press release and modified exemptive order on the SEC's website.

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Covid-19 Disclosures: Guidance From Corp Fin

Mar 25, 2020

On March 25, 2020, the SEC Division of Corporation Finance issued "CF Disclosure Guidance Topic No. 9", which addresses disclosure and other securities law obligations relating to the Covid-19 crisis.

The guidance provides a helpful list of illustrative questions that companies should ask themselves when preparing disclosure documents. The guidance also addresses insider trading concerns, as well as considerations for earnings releases. When it comes to earnings disclosure, Corp Fin touches on several issues, one of which is non-GAAP financial data.

Review the guidance on the SEC's website.

IFRS - IASB Image

IASB releases podcast on IFRS 17

Mar 23, 2020

On March 23, 2020, the International Accounting Standards Board (the Board) released a podcast featuring IASB member Darrel Scott and technical staff member Chalani Mohotti as they discuss the developments at the March 2020 Board meeting related to the amendments to IFRS 17, "Insurance Contracts".

Specifically, the podcast discusses the Board’s decisions related to effective date of IFRS 17 and the expiry date of the IFRS 9 temporary exemption in IFRS 4.

Listen to the podcast on the IASB's website.

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