Part I - IFRS

IFRS - IASB Image

IASB announces timing of its website upgrade

Jun 02, 2017

On June 2, 2017, the International Accounting Standards Board (IASB) announced that its major website upgrade will occur on June 10–11, 2017. There is a potential for site slowness and outages during this period.

Regarding older content, it notes:

Because we store thousands of documents on our current server, we are migrating content to the new website in phases. Content yet to be migrated will remain in an archive of the current website, which will be available to access via archive.ifrs.org.

Review the press release on the IASB's website for the changes being made to its website.

IFRS - IASB Image

Responses to the IASB exposure draft regarding prepayment features with negative compensation

May 29, 2017

In May 2017, the International Accounting Standards Board (IASB) posted the comment letters it received on its exposure draft ED/2017/3 "Prepayment Features with Negative Compensation (Proposed amendments to IFRS 9)". The majority of stakeholders' responses are negative, but for different reasons.

The responses to ED/2017/3 seem to fall into three major categories:

  • Those who believe that there never was an issue with IFRS 9;
  • Those who believe that changes to IFRS 9 are needed, but the approach is wrong/might have unintended consequences; and
  • Those who believe that changes to IFRS 9 might be warranted, but the timing is wrong.

The IASB is in the process of posting all responses to the exposure draft to its website.

Review the comment letters on the IASB's website.

IFRS - IASB Image

IASB publishes Request for Information on the post-implementation review of IFRS 13

May 25, 2017

On May 25, 2017, the International Accounting Standards Board (IASB) issued a Request for Information (RFI) seeking comments from stakeholders to identify whether IFRS 13 "Fair Value Measurement" provides information that is useful to users of financial statements; whether there are areas of IFRS 13 that are difficult to implement and may prevent the consistent implementation of the standard; and whether unexpected costs have arisen in connection with applying or enforcing the standard.

So far, four broad areas have been identified where IFRS 13 might benefit from improvements. These four areas are the backbone of the RFI:

  • Disclosures about fair value measurements. Some of the disclosure requirements for Level 3 fair value measurements are perceived as onerous while at the same time their usefulness is questioned.
  • Prioritising Level 1 inputs or the unit of account. IFRS 13 is perceived as not clear on whether entities should prioritise Level 1 inputs or the unit of account when determining the fair value of investments in joint ventures and associates.
  • Application of the concept of the highest and best use. Concerns in this area regard the implications of applying the concept of highest and best use in the measurement of groups of operating assets.
  • Application of judgement in specific areas. Challenges around this have been mentioned to the IASB and the question is whether further support could be helpful.

Also, the RFI asks respondents whether the IASB should strive to maintain convergence with US GAAP Topic 820 Fair Value Measurement in any changes that might be the result of the PIR.

Comment deadline is September 22, 2017.

Review the press release and request for information on the IASB's website.

RobertBruceSpotlight Image

The Bruce Column — Sunshine and the ideas behind management commentary

May 25, 2017

The concept of management commentary has long been perceived by the IASB like a worrying cloud hovering over financial reporting. But the sun may be about to break through. A speech by Hans Hoogervorst, Chairman of the IASB, looks likely to have confirmed that the weather has changed, reports regular columnist, Robert Bruce.

The <IR> framework has become widely adopted and the UK’s guidance on the concept of a strategic report is seen as mainstream. In Hans Hoogervorst’s words: "They put more emphasis on interconnectivity among elements of an integrated report’" They look at "how developments in the external environment have affected a company’s business model and strategy’" he said. It is time for change. Now more than ever people need integrated reporting-style reporting.

Read the entire column on our Global IAS Plus site.

IFRS - CMAC Image

Summary of the March 2017 CMAC meeting

May 24, 2017

On May 24, 2017, the International Accounting Standards Board (IASB) released a summary of the Capital Markets Advisory Committee (CMAC) meeting which was held in London on March 16, 2017.

The topics discussed at the meeting included:

  • Primary financial statements
  • Rate-regulated activities
  • Clarifications to IFRS 8 arising from the post-implementation review
  • IFRS 3, Business Combinations: Definition of a business
  • Disclosure Initiative — outreach planning for the Disclosure Initiative — Principles of Disclosure discussion paper and case studies
  • Education session — insurance contracts

Review the meeting page and the meeting summary on the IASB's website.

IFRS - Deloitte Image

We comment on seven IFRS Interpretations Committee tentative agenda decisions

May 23, 2017

Our Global firm has published comment letters on IFRS Interpretations Committee tentative agenda decisions on IAS 12, IAS 19, IAS 32, IAS 33, IAS 41, IFRS 1, and IFRS 9, as published in the March 2017 IFRIC Update.

More information about the issues is set out below:

Issue Agenda decision supported? More information
IAS 12 Income Taxes — Interest and penalties related to income taxes Yes.
IAS 19 Employee Benefits — Discount rate in a country that has adopted another country’s currency Yes, however we suggest several amendments that we think could help make the tentative agenda decision clearer.
IAS 32 Financial Instruments: Presentation — Centrally cleared client derivatives Yes.
IAS 33 Earnings Per Share — Tax arising from payments on participating equity instruments Yes.
IAS 41 Agriculture — Biological assets growing on bearer plants Yes, however we recommend the Board consider a number of related conceptual issues as part of the Post-implementation Review of IFRS 13.
IFRS 1 First-time Adoption of International Financial Reporting Standards — Subsidiary as a first-time adopter Yes.
IFRS 9 Financial Instruments — Modifications or exchanges of financial liabilities that do not result in derecognition Yes, however we recommend that this issue would be better addressed via a formal Interpretation rather than an agenda decision.

Review all our comment letters to the IASB, IFRS Foundation, and IFRS Interpretations Committee on our Global IAS Plus website.

IFRS - IASB Image

IASB launches IFRS 17 implementation support page

May 23, 2017

On May 23, 2017, after the issuance of IFRS 17 "Insurance Contracts" on May 18, the International Accounting Standards Board (IASB) has set up an implementation support page for IFRS 17.

In addition to material issued alongside IFRS 17, the page also offers contact details and submission information for technical inquiries and implementation issues.

The IASB will keep the implementation support page available through the whole implementation process for IFRS 17 and will continue to add additional information that becomes available.

Review the new page on the IASB's website.

IFRS - IASB Image

PIR of IFRS 13 to be substantiated by a literature review

May 23, 2017

On May 23, 2017, the International Accounting Standards Board (IASB) announced that it will launch the public phase of the post-implementation review (PIR) of IFRS 13 "Fair Value Measurement" in May. The IASB is now also calling for applications to undertake a literature review on the effect on IFRS 13.

The call for research seeks applications to undertake a literature review, bringing together the existing academic literature on the effect of implementation of IFRS 13, Fair Value Measurement. The IASB expects to receive a full literature review and a summary, which highlight findings in the existing literature as they relate to the areas of focus in the Board’s PIR of IFRS 13.

Review the call for applications on the IASB's website.

ÌFRS - CFA Institute Image

Study Examines the Impact of Reporting Frequency

May 23, 2017

On May 23, 2017, the CFA Institute released an article on a study that examines the impact of quarterly reporting of UK companies. Although some argue that quarterly earnings encourage short-term thinking, the findings of the study help to dispel that notion.

The authors of the study found that companies still invested for the long term even after they were required to start reporting on a quarterly basis.

The new CFA Institute Research Foundation brief “Impact of Reporting Frequency on UK Public Companies” examines the time period between 2007, when UK regulators began requiring quarterly reports from companies, to 2014, when they dropped that requirement. They found several effects associated with the two different approaches to reporting frequency.

Effect of Requiring and Not Requiring Quarterly Reporting

  • No difference in long-term investment activity
  • Quarterly reports became more qualitative than quantitative
  • More companies issued managerial guidance
  • Analyst coverage increased

Policy Recommendations

  • Going from quarterly to semi-annual reporting does not combat “short-termism”
  • Quarterly reports should be streamlined and include relevant metrics

Review the article on the CFA Institute's website.

IFRS - FSB (Financial Stability Board) Image

We Mean Business coalition statement and key recommendations to the G20 leaders

May 22, 2017

In May 2017, the We Mean Business coalition expressed its support for the recommendations of the Task Force on Climate-related Financial Disclosure (TCFD) convened by the Financial Stability Board (FSB).

The We Mean Business coalition has released a statement and key recommendations to the G20 leaders expressing support for the recommendations of the TCFD.

Deloitte is among one of the companies that is committed to action, as part of the We Mean Business coalition.

Review the Statement and key recommendations on the We Mean Business coalition's website.

Correction list for hyphenation

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