Part I - IFRS

IFRS - IASB Image

Report of the IFRS Foundation Trustees January meeting

Feb 05, 2016

On February 5, 2016, the report of the IFRS Foundation Trustees meeting in London held on January 26–28, 2016 was released.

Meeting ac­tiv­i­ties included the following:

  • Executive session — The Trustees discussed a number of important strategic issues:
    • Review of structure and effectiveness of the IFRS Foundation
    • Strategic Plan 2016 
    • Working with National Standard-Setters and regional bodies
    • Other issues.
    • Committee reports
  • IASB Chairman’s report — The Chair of the IASB provided the Trustees with an update on a number of the IASB’s technical ac­tiv­i­ties.
  • Report of the Due Process Oversight Committee (DPOC) — The Trustees received a report about the DPOC’s January 2016 meeting.
  • Investors in financial reporting event — The IFRS Foun­da­tion, with the CFA Institute, hosted an event 'Investors in Financial Reporting’.

The full report on the IFRS Foun­da­tion trustees’ meeting is available on the IASB’s Web site.

FASB (US Financial Accounting Standards Board) (lt blue) Image

FASB adds four projects to research agenda

Feb 03, 2016

On February 3, 2016, as result of a survey of different advisory groups, the Financial Accounting Standards Board (FASB) decided to add four new financial reporting issues in its upcoming agenda discussion paper expected in the first half of 2016.

The issues to be added are:

  • Pensions and other postretirement employee benefit plans;
  • Intangible assets;
  • Distinguishing liabilities from equity; and
  • Financial performance reporting.

With the exception of intangible assets, which the IASB currently does not address in its research projects, these issues correspond with those raised by the IASB's agenda consultation respondents. Although a full analysis of the 118 responses on the IASB's Web site is not available yet, projects on Pensions and other postretirement employee benefit plans and Distinguishing liabilities from equity rank high among the research projects currently on the IASB's agenda.

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IFRS - IASB Image

IASB finalizes amendments to IAS 7 under its disclosure initiative

Jan 29, 2016

On January 29, 2016, the International Accounting Standards Board (IASB) published amendments to IAS 7 'Statement of Cash Flows'. The amendments are intended to clarify IAS 7 to improve information provided to users of financial statements about an entity's financing activities. They are effective for annual periods beginning on or after January 1, 2017, with earlier application being permitted.

The amend­ments re­quire dis­clo­sures that will en­able users of fi­nan­cial state­ments to eval­u­ate changes in li­a­bil­i­ties aris­ing from fi­nanc­ing ac­tiv­i­ties. To the extent necessary to achieve this ob­jec­tive, the IASB re­quires that the fol­low­ing changes in li­a­bil­i­ties aris­ing from fi­nanc­ing ac­tiv­i­ties are dis­closed): (i) changes from fi­nanc­ing cash flows; (ii) changes aris­ing from ob­tain­ing or los­ing con­trol of sub­sidiaries or other busi­nesses; (iii) the ef­fect of changes in for­eign ex­change rates; (iv) changes in fair val­ues; and (v) other changes.

The amendments state that one way to fulfill the new disclosure requirements is to provide a reconciliation between the opening and closing balances in the statement of financial position for liabilities arising from financing activities. This is a departure from the December 2014 exposure draft that had proposed that such a reconciliation should be required.

Finally, the amendments state that changes in liabilities arising from financing activities must be disclosed separately from changes in other assets and liabilities.

Dissenting opinion

One Board member voted against the publication of the amendments as this Board member believes that (i) the amendments may provide incomplete information about an entity’s management of liquidity, (ii) the amendments do not meet the needs of users of financial statements, and (iii) the costs of preparing the disclosure will be considerable and may outweigh the benefits.

Effective date and transition requirements

The amendments are effective for annual periods beginning on or after January 1, 2017. Earlier application is permitted. Since the amendments are being issued less than one year before the effective date, entities need not provide comparative information when they first apply the amendments.

Additional information

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IFRS - IASB Image

IASB finalizes amendments regarding the recognition of deferred tax assets for unrealized losses

Jan 19, 2016

On January 19, 2016, the International Accounting Standards Board (IASB) published final amendments to IAS 12 'Income Taxes'. The IASB had concluded that the diversity in practice around the recognition of a deferred tax asset that is related to a debt instrument measured at fair value is mainly attributable to uncertainty about the application of some of the principles in IAS 12. Therefore the amendments consist of some clarifying paragraphs and an illustrating example.

The amendments in Recognition of Deferred Tax Assets for Unrealized Losses clarify the following aspects:

  • Unrealized losses on debt instruments measured at fair value and measured at cost for tax purposes give rise to a deductible temporary difference regardless of whether the debt instrument's holder expects to recover the carrying amount of the debt instrument by sale or by use.
  • The carrying amount of an asset does not limit the estimation of probable future taxable profits.
  • Estimates for future taxable profits exclude tax deductions resulting from the reversal of deductible temporary differences.
  • An entity assesses a deferred tax asset in combination with other deferred tax assets. Where tax law restricts the utilization of tax losses, an entity would assess a deferred tax asset in combination with other deferred tax assets of the same type.

The amendments are effective for annual periods beginning on or after January 1, 2017. Earlier application is permitted. As transition relief, an entity may recognize the change in opening retained earnings of the earliest comparative period on initial application. The Board has not added additional transition relief for first-time adopters.

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IASB (International Accounting Standards Board) (blue) Image

IASB updates work plan

Oct 26, 2015

On October 26, 2015, the International Accounting Standards Board (IASB) released an updated work plan.

Two projects have been added to the work plan:

  1. Annual improvements 2015–2017
  2. Remeasurement of previously held interests — obtaining control or joint control in a joint operation that constitutes a business

Next steps of several projects have been updated.

The updated IASB work plan is avail­able on the IASB's Web site.

IFRS - IASB Image

IASB issues work plan update, changes presentation

Aug 05, 2015

On July 31, 2015, following its July meeting, the International Accounting Standards Board (IASB) updated its work plan. It has also changed the presentation so that a direct comparison with the status as at June 30 is not easily possible as the attribution to quarters has been abandoned.

The following changes have been made:

  1. the new IFRS on insurance contracts is not expected until 2016;
  2. an exposure draft on changes in accounting policies and estimates (disclosure initiative) will also be delayed to 2016;
  3. discussion papers on macro hedging and on rate-regulated activities are not to be expected before 2016;
  4. the IASB expects to issue final amendments on the implementation projects on the unit of account (expected not before 2016) and on the recognition of deferred tax assets for unrealized losses (late 2015 or early 2016); and
  5. instead of finalizing the project on the elimination of gains or losses arising from transactions between an entity and its associate or joint venture the IASB intends to issue an exposure draft proposing to defer the effective date of the September 2014 amendments to IAS 28, IFRS 10 and IFRS 12.

The revised IASB work plan is available on the IASB's Web site. The IASB has also published a work plan guide that explains the new presentation format.

IFRS - IASB Image

IASB issues work plan update

Jun 30, 2015

On June 30, 2015, following its June meeting, the IASB updated its work plan. The revised plan announces that the exposure draft (ED) on elimination of gains and losses arising from "downstream" transactions and the draft IFRIC interpretation on accounting for uncertainties in income taxes will now be issued in the third quarter of 2015 (delayed from the second quarter of 2015), and extends redeliberations for several projects to the third quarter of 2015.

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

IFRS - IASB Image

IASB completes post-implementation review of IFRS 3

Jun 17, 2015

On June 17, 2015, the International Accounting Standards Board (IASB) announced that it has completed its post-implementation review (PIR) of IFRS 3 "Business Combinations". The review concluded that there is general support for IFRS 3 and its related Standards; however, there are several aspects where additional research is needed.

The PIR report assessed in­for­ma­tion gathered from academic lit­er­a­ture as well as feedback from investors and other financial statement users and preparers, auditors, and reg­u­la­tors. It showed general support for the “usefulness of reported goodwill, other intangible assets and goodwill impairment.” However, views were mixed on certain elements of the standard.

On the basis of the PIR report, the IASB added to its agenda two research projects that will focus on:

  • Effectiveness and complexity of testing goodwill for impairment.
  • Subsequent accounting for goodwill.
  • Challenges related to applying the definition of a business.
  • Identification and fair value measurement of intangible assets such as customer relationships and brand names.

For more information, see the press release and the PIR report on the IASB’s website.

IFRS - IASB Image

IASB issues work plan update

May 29, 2015

On May 29, 2015, following its May meeting, the International Accounting Standards Board updated its work plan. The revised plan adds a new project on “Changes in accounting policies and estimates”, moves the Exposure Draft on “Clarifications to IFRS 15” and the Draft Interpretation on “Uncertainties in income taxes” back by one quarter, and introduces a new format for reporting on the progress in research projects.

The revised IASB work plan is available on the IASB's Web site.
IFRS - IASB Image

IASB proposes revisions to the Conceptual Framework

May 28, 2015

On May 28, 2015, the International Accounting Standards Board (IASB) published a comprehensive Exposure Draft (ED) containing proposals for topical areas where it considers a revision and amendment of the existing Conceptual Framework necessary. Included in the ED are proposals to revise the definitions of an asset and a liability, to introduce guidance on measurement and derecognition, and to set a framework for presentation and disclosure. The main ED is accompanied by an ED containing proposals regarding references to the Conceptual Framework in other IASB pronouncements. Comments on both EDs are due October 26, 2015.

ED/2015/3 Conceptual Framework for Financial Reporting explains that the Conceptual Framework's primary purpose is to assist the IASB in developing and revising IFRSs (even though it may be useful to parties other than the IASB) and that the framework does not override any specific IFRS. Should the IASB decide to issue a new or revised pronouncement that is in conflict with the framework, the IASB will highlight the fact and explain the reasons for the departure going forward.

ED/2015/4 Updating References to the Conceptual Framework contains proposed amendments to IFRS 2, IFRS 3, IFRS 4, IFRS 6, IAS 1, IAS 8, IAS 34, SIC-27 and SIC-32 in order to update those pronouncements with regard to references to and quotes from the framework so that they refer to the revised Conceptual Framework. As the Conceptual Framework will mainly affect the IASB and its work while the proposals regarding the other pronouncements could also affect preparers, the IASB considers granting a transition period of approximately 18 months for the amendments proposed in ED/2015/4 in order to give preparers time to identify, understand and adjust to possible implications.

The IASB allows constituents an extended six months period to work their way through the document and to respond to the questions raised; hence, comment letters are to be submitted by October 26, 2015. The IASB will consider the comments received when developing the final version of the revised Conceptual Framework. The IASB aims to finalize the revised Conceptual Framework in 2016.

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