March 2017

2017 IFRS XBRL taxonomy issued

Mar 09, 2017

On March 9, 2017, the IFRS Foundation issued its 2017 IFRS Taxonomy. The IFRS Taxonomy is a translation of IFRSs (International Financial Reporting Standards) into XBRL (eXtensible Business Reporting Language).

The IFRS Taxonomy 2017 is consistent with IFRSs as issued by the IASB at January 1,2017 and incorporates the finalized taxonomy update 1 and the finalized taxonomy update 2, published by the IFRS Foundation in April and in December 2016 respectively. Final changes resulting from the proposed taxonomy update 3 published in December 2016 have been incorporated directly into the IFRS Taxonomy 2017.

On March 28, 2017, the IFRS Taxonomy team is holding two webinar sessions to answer questions about the IFRS Taxonomy 2017.

Review the press release and the IFRS Taxonomy 2017 page on the IASB's website.

AcSB Annual Plan – 2017-2018

Mar 28, 2017

On March 28, 2017, the Accounting Standards Board (AcSB) released its Annual Plan, where it sets out its objectives and planned activities for publicly accountable enterprises, private enterprises and not-for-profit organizations, along with other initiatives to be undertaken in 2017-2018.

The key elements of the AcSB’s Strategic Plan considered for this annual plan are summarized below:

Overarching strategic goal - Retain separate strategies for each category of reporting entity in Canada’s private sector

Publicly accountable enterprises - Support the application in Canada of IFRSs

  • Influence future international standards by maintaining and leveraging Canada's strong reputation internationally.
  • Stakeholders apply new and existing IFRSs effectively.
  • Differences in global standards are narrowed, including alignment of adoption dates for new IFRSs.

Private enterprises - Retain and improve the standards in Part II

  • Part II contains a high-quality set of standards that:
    • produces decision-useful information;
    • is complete; and
    • supports the exercise of professional judgment while providing sufficient guidance to result in consistent application.
  • Private enterprises apply new and existing standards effectively.

NFPOs - Retain and improve the standards in Part III

  • Improvements to the Part III standards consider stakeholder input and the unique needs of NFPOs.
  • The needs of NFPOs are met following changes made to ASPE.

Pension plans - Retain the standards in Part IV

  • Part IV standards meet the needs of this sector.

Review the Annual Plan on the AcSB's Web site.

AcSB Due Process Activities – 2016 Changes to Part I

Mar 27, 2017

On March 27, 2017, the Accounting Standards Board (AcSB) released a document summarizes the due process activities it undertook in support of the changes made to Part I of the Handbook during 2016.

The changes made to Part I to incorporate new or amended IFRSs issued by the IASB include:

  • IFRS 2, Share-based Payment (amendments regarding classification and measurement of share-based payment transactions)
  • IFRS 10, Consolidated Financial Statements and IAS 28, Investments in Associates and Joint Ventures (amendments regarding the effective date of amendments to IFRS 10 and IAS 28)
  • IFRS 15, Revenue from Contracts with Customers (amendments regarding the effective date of IFRS 15)
  • IFRS 15, Revenue from Contracts with Customers (amendments regarding clarifications to IFRS 15)
  • IFRS 16, Leases (new)
  • IAS 7, Statement of Cash Flows (amendments regarding disclosure initiative)
  • IAS 12, Income Taxes (amendments regarding recognition of deferred tax assets for unrealized losses)

Review the document on the AcSB's website.

AICPA issues five revenue working drafts

Mar 02, 2017

In March 2017, the American Institute of CPAs’ (AICPA) revenue recognition task forces released for public comment five working drafts on accounting issues associated with the implementation of the new revenue standard for aerospace and defense, broker-dealer, power and utility, and time-share entities.

The working drafts address the following topics:

Comments on the working drafts are due by May 1, 2017.

For more information, see the revenue recognition page on the AICPA’s Web site.

BCBS has "not yet reached a conclusion" on IFRS 9

Mar 31, 2017

In March 2017, the Basel Committee on Banking Supervision (BCBS) released a statement on the interim regulatory treatment of accounting provisions and standards in view of the limited time until the effective date of IFRS 9 "Financial Instruments".

The statement stresses that the BCBS supports the use of expected credit loss (ECL) accounting approaches and encourages their application in a manner that will achieve earlier recognition of credit losses than incurred loss models while also providing incentives for banks to follow sound credit risk management practices. Still, the BCBS notes that the implementation of ECL accounting is likely to have fundamental implications for the regulatory capital and banks’ provisioning practices in qualitative and quantitative ways.

In view of the limited time until the effective date of IFRS 9 (January 1, 2018), the BCBS has therefore decided to retain the current regulatory treatment of provisions under the Basel framework for an interim period. In the meantime, the BCBS will thoroughly review the longer-term regulatory treatment of provisions. The statement also notes that jurisdictions may adopt transitional arrangements to smooth any potential significant negative impact on regulatory capital arising from the introduction of ECL accounting.

Review the BCBS statement on the Bank for International Settlements' (BIS) website.

Deferral of IFRS 9 Application for Federally Regulated Life Insurers

Mar 20, 2017

On March 20, 2017, the Office of the Superintendent of Financial Institutions (OSFI) issued the final version of its advisory: "Deferral of IFRS 9 Application for Federally Regulated Life Insurers."

The advisory is in response to the September 2016 International Accounting Standards Board (IASB) approved amendment to IFRS 4, Insurance Contracts, allowing companies whose activities are predominantly connected with insurance to defer the application of IFRS 9, Financial Instruments, until January 1, 2021.

Review the advisory on the OSFI's website.

Examination of Factors Affecting Financial Statement Placement Order

Mar 22, 2017

In March 2017, Georgia Tech released a report in which anecdotal data suggest that firms are using the placement order of their financial statements to provide emphasis and affect perception about financial performance and position.

Their objective was to see if they can identify systematic differences across firms that would help explain the financial statement placement order employed. They identified a sample of 400 public companies drawn from four different revenue quartiles. In addition to financial data for each firm, they identified the sector in which each firm operates and the firm’s auditor.

They found that the balance sheet is much more likely to be the lead-in financial statement. Of the 400 companies in the sample, 272 (68.00%) present the balance sheet first while 127 (31.75%) present the statement of operations (income statement) first. In examining the factors that may drive the lead-in financial statement decision, they noted that firms leading with the statement of operations are larger based on revenue and total assets. Further, they are more profitable, reporting a higher return on equity and higher net margin.

Their asset turnover and operating cash margin are also higher. Finally, likely attesting to their larger size and debt service capacity, the firms leading with the statement of operations also report higher financial leverage.

Review the full report on the Georgia Tech's website.

Foreign private issuers that prepare their financial statements in accordance with IFRS may begin submitting those reports to the SEC in XBRL

Mar 01, 2017

On March 1, 2017, the Securities and Exchange Commission (SEC) published a taxonomy on its website so that foreign private issuers that prepare their financial statements in accordance with IFRS may submit those reports using XBRL. XBRL is a machine readable data format that allows investors and other data users to more easily access, analyze and compare financial information across reporting periods and across companies.

Foreign private issuers that prepare their financial statements in accordance with IFRS as issued by the International Accounting Standards Board may begin immediately to submit their financial statements in XBRL. Otherwise, all such foreign private issuers must submit their financial statements in XBRL for fiscal periods ending on or after December 15, 2017.

Review the press release and the notice on the SEC's website.

FSB letter stresses importance of climate-related financial disclosures

Mar 10, 2017

On March 10, 2017, the Financial Stability Board (FSB) issued a letter to the G20 Finance Ministers and Central Bank Governors who met in Baden-Baden, Germany, on March 17-18, 2017. The letter included new and emerging vulnerabilities identified by the FSB that need to be addressed.

In this context, the FSB noted the work of the Task Force on Climate-related Financial Disclosures (TCFD) and added:

Access to better quality information on climate-related financial risks is essential to enable market participants to better understand and manage these risks. Without the necessary information, market adjustments to climate change could be incomplete, late and potentially destabilising.

The FSB pointed out that the TCFD issued a consultation document with recommendations on climate-related disclosures in December 2016 that would be followed by June 2017 (and thus in time for the July G20 meeting in Hamburg) by the final report offering "a solution by the market for the market".

Review the full letter on the FSB's website.

IASB issues "Investor Update" newsletter

Mar 29, 2017

On March 29, 2017, the International Accounting Standards Board (IASB) issued the twelfth edition of its newsletter "Investor Update", which provides investors with quick access to information about current accounting and financial reporting topics.

This issue features:

  • An overview of proposed amendments to IFRS 8.
  • The usefulness of the new disclosures required in IAS 7.
  • Request for views on the Principles of Disclosure discussion paper, proposed amendments to IFRS 8, and primary financial statements.
  • Information on investor materials and current events.

The Investor Update newslet­ter is available on the IASB’s website.

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