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July 2016

AICPA issues second set of working drafts of revenue implementation issues

Jul 08, 2016

On July 8, 2016, the AICPA’s Financial Reporting Executive Committee (FinREC) has released for public comment nine working drafts of accounting issues associated with implementation of the new revenue standard.

This is the second set of working drafts of revenue recognition implementation issues release by FinREC; in November 2015, the Committee also issued nine working drafts.

The working drafts apply to entities in the following industries: (1) aerospace and defense, (2) airline, (3) broker-dealer, (4) engineering and construction contracting, (5) gaming, (6) health care, (7) investment asset management, (8) not-for-profit, and (9) software. Comments on the working drafts are due by September 1, 2016.

For more information, see the links to each industry’s task force on the revenue recognition resource page on the AICPA’s Web site.

IASB posts webcast on IFRS 9 forward-looking information

Jul 25, 2016

On July 25, 2016, the International Accounting Standards Board (IASB) released a webcast discussing forward-looking information in the application of the expected credit loss impairment requirements in IFRS 9.

The webcast, which features IASB member Sue Lloyd, Technical Director Kumar Dasgupta, and Practice Fellow Uni Choi, covers the following topics:

  • “when multiple scenarios are relevant and the concept of non-linearity;
  • consistency of scenarios;
  • probability-weighted assessment of significant increase in credit risk; and
  • approaches to incorporating forward-looking scenarios”

Review the webcast on the IASB’s website.

IASB updates work plan

Jul 20, 2016

On July 20, 2016, the International Accounting Standards Board (IASB) released its updated work plan.

Changes to the work plan include:Changes to the work plan include:

Research projects

Standard-setting and related projects (major projects)

Implementation projects (narrow scope amendments)

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

IFRS Foundation Feedback Statement – Trustees’ Review of Structure and Effectiveness

Jul 08, 2016

On July 8, 2016, the IFRS Foundation Trustees have issued a Feedback Statement summarizing the comments they received in response to their July 2015 Request for Views on this topic.

This Feedback Statement sets out a summary of the comments received by the Trustees of the IFRS Foundation in response to their July 2015 document Request for Views - Trustees’ Review of Structure and Effectiveness: Issues for the Review. This Feedback Statement also sets out the Trustees’ decisions on the review, having considered the comments received.

This Feedback Statement should be read in conjunction with an Exposure Draft of proposed changes to the Foundation’s Constitution, which is being published at the same time as this document.

Review the Feedback Statement on the IASB's website.

New Chair of the IFRS Foundation Monitoring Board

Jul 13, 2016

On July 13, 2016, the IFRS Foundation Monitoring Board has announced that Masamichi Kono has stepped down as Chair of the Monitoring Board. The Monitoring Board is responsible for the oversight of the IFRS Foundation.

Ryozo Himino, Vice Minister for International Affairs of the Japan Financial Services Agency (FSA), has been appointed by the Mon­i­tor­ing Board to serve as Chair for the remainder of Mr. Kono’s term i.e., until February 2017.

Please click for the press release an­nounc­ing this change on the IOSCO website. 

Report on the June 2016 IFRS Advisory Council meeting

Jul 06, 2016

On July 6, 2016, the International Accounting Standards Board (IASB) released a summary of the IFRS Advisory Council meeting held on June 13–14, 2016. Highlights of the meeting will be thorough discussions of the review of structure and effectiveness of the IFRS Foundation and of the future of corporate reporting.

The following topics were discussed:

  • 2015 Agenda Consultation
  • IASB and IFRS Foundation Update
  • IFRS Foundation Review of Structure and Effectiveness
  • Members' communications
  • Technological Disruption of Financial Reporting
  • Timeline for developing Standards—The Leases Project—A look back

The full report on the council’s February meeting is available on the IASB's Web site.

SEC Proposes Changes to “Smaller Reporting Company” Definition

Jun 27, 2016

On June 27, 2016, the Securities and Exchange Commission (SEC) voted to propose amendments that would increase the financial thresholds in the “smaller reporting company” definition.

The proposal to update the definition would expand the number of companies that qualify as smaller reporting companies, thus qualifying for certain existing scaled disclosures provided in Regulation S-K and Regulation S-X.

Smaller reporting companies may provide scaled disclosures under the Commission’s rules and regulations. The proposed rules would enable a company with less than $250 million of public float to provide scaled disclosures as a smaller reporting company, as compared to the $75 million threshold under the current definition. In addition, if a company does not have a public float, it would be permitted to provide scaled disclosures if its annual revenues are less than $100 million, as compared to the current threshold of less than $50 million in annual revenues.

Review the press release and the proposed amendments on the SEC's website.

Study finds it is "unrealistic to expect financial reporting around the world to be completely comparable"

Jul 08, 2016

On July 8, 2016, the Financial Reporting Faculty of the Institute of Chartered Accountants in England and Wales (ICAEW) published a paper on "Incentives and institutions in accounting: thinking beyond standards" that looks into the principal factors that affect financial reporting outcomes and the degree to which these are the product of the surrounding institutions and on the incentives that affect individual firms and their managers.

The study finds that as the incentives and institutions that influence accounting outcomes vary among firms and among jurisdictions the goal of international financial reporting should be increased comparability rather than complete comparability. Improving the quality of financial reporting would therefore not only require thinking about the technical requirements that govern it, but also the incentives of those who prepare accounts and the surrounding institutions – auditing, corporate governance, enforcement, the legal system, the educational system, and so on.

The issues discussed in the report imply that public policy debates should focus on the incentives and institutions that support financial reporting quality as well as on accounting standards. They also imply that countries considering adopting IFRS need to look at other institutions as well if they are to obtain the full benefits of adoption.

Review the full study on the ICAEW's website.

UK unlikely to depart from IFRSs if it intends to remain a global player

Jul 01, 2016

On July 1, 2016, the Institute of Chartered Accountants of Scotland (ICAS) released some additional responses to the 20 questions it posed on June 24, 2016 about the impact of 'Brexit' on business and trade, including on accounting and audit.

Responses released on July 1, 2016 include thoughts on the following question:

In areas of accountancy, what new policies will follow? Will [the UK] be inclined or persuaded to depart from International Financial Reporting Standards (IFRS) and re-establish UK Generally Accepted Accounting Practice (UK GAAP)?

The ICAS staff argue that if the UK intends to remain a global player, "then one would expect that it would need to require listed entities to comply with global standards in the area of financial reporting". They state:

IFRS is now seen as the global benchmark in terms of financial reporting standards and therefore their use, or the use of standards substantively based on the IFRS framework (adopted standards), would appear to be the primary option.

However, the ICAS staff points out that following its exit, the UK would have the ability to sadopt IFRS standards as issued by the IASB without them firstly having to be adopted by the EU. They also explain that the UK could establish its own adoption mechanism, possibly via the Financial Reporting Council (FRC).

Please click for the following information on the ICAS' Web site:

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.