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September 2017

Accountancy Europe follows up on 'CORE & MORE' and calls for decisive leadership in non-financial reporting

Sep 18, 2017

On September 18, 2017, at the "Shaping the future of corporate reporting" event held in Brussels, Accountancy Europe (formerly FEE) launched two publications: a follow-up report on the 2015 paper that put forward the idea of "CORE & MORE" and a call for action to enhance the coordination of non-financial information initiatives and frameworks.

The Core & More concept introduced in 2015 aims to present corporate reporting in a smarter way, organizing financial and non-financial information based on the interests of users. Information relevant for a wide range of stakeholders would be in the Core report, and supplementary details for a more limited audience would form the More reports. The paper develops the concept further and provides ideas on what information could be presented in each of the pillars. It also explores how technology might support the Core & More concept and addresses the relationship between Core & More and integrated reporting.

Review the paper Core & More: an opportunity for smarter corporate reporting on the Accountancy Europe's website.

The call for action notes that "the overwhelming number of existing disconnected non-financial information reporting frameworks complicates coherent, consistent, and comparable wider corporate reporting, and steadily increases the reporting burden for companies". Accountancy Europa calls on the different standard-setting bodies and initiatives to coordinate their efforts to streamline existing reporting frameworks addressing similar pieces of non-financial information. The organization believes that the final step in this development should aim at developing a single global framework for non-financial information reporting. (At the very same event IASB Chairman Hans Hoogervorst noted in a speech that the IASB could not and would not take the decisive leadership role Accountancy Europe hints at in the call for action).

Review the Call for action: Enhance the coordination of non-financial information initiatives and frameworks on the Accountancy Europe's website.

AcSB Exposure Draft – Accounting Policies and Accounting Estimates (Proposed amendments to IAS 8)

Oct 04, 2017

On October 4, 2017, the Accounting Standards Board (AcSB) issued its Exposure Draft that corresponds to the IASB’s Exposure Draft on this topic. Stakeholders are encouraged to submit their comments by January 15, 2018.

The proposed amendments help to distinguish between accounting policies and accounting estimates by clarifying that accounting estimates are judgments and assumptions used in applying an accounting policy when an item cannot be measured with precision.

Review the Exposure Draft on the AcSB's website.

Addressing Implementation Matters to Improve Financial Reporting

Sep 21, 2017

On September 21, 2017, the Securities and Exchange Commission (SEC) released a speech by Sagar Teotia, Deputy Chief Accountant, where he discusses the implementation of the new GAAP standards, specifically revenue recognition, leases, and measurement of credit losses on financial instruments.

In the speech, Mr. Teotia speaks to the important role that preparers, auditors, and audit committees have in achieving the implementation of these standards.

Review the speech on the SEC's website.

AICPA issues seven revenue working drafts

Sep 06, 2017

On September 6, 2017, the AICPA’s revenue recognition task forces released for public comment seven working drafts on accounting issues associated with the implementation of the new revenue standard for aerospace and defense, asset management, broker-dealer, engineering and construction, power and utility, software, and time-share entities.

The working drafts address the following topics:

  • Disclosure requirements (aerospace and defense and engineering and construction)
  • Costs of managing investment companies (asset management)
  • Soft-dollar revenue (broker-dealers)
  • Revenue recognition for fixed-price contracts (power and utilities)
  • Determination of whether a customer’s right to acquire additional users/copies of a delivered software product constitutes an option to acquire additional software rights or variable consideration related to software rights already purchased (software)
  • Principal-versus-agent considerations related to time-share interval sales (time shares)

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

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

ASAF Agenda Paper: Definition of a business

Sep 28, 2017

On September 28, 2017, the Accounting Standards Advisory Forum (ASAF) released a comparison between FASB Amendments and IASB tentative decisions on the definition of a business.

The agenda paper:

  1. compares the Board’s tentative decisions with the FASB Amendments;
  2. explains the main differences; and
  3. asks for ASAF members’ advice on the differences between the Board’s tentative decisions and the FASB Amendments.

Appendix A of this paper includes a table that shows a summary of all the Board’s tentative decisions against the FASB decisions.

Review the agenda paper on the IASB's website.

Background papers for the 34th annual ISAR meeting

Sep 26, 2017

In September 2017, the United Nations announced that the thirty-fourth session of the Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting (ISAR) will be held in Geneva on November 1-3, 2017. The two main agenda items discussed during the session will be enhancing comparability of sustainability reporting and the role of disclosure in risk assessment and enhancing the usefulness of corporate reporting in decision-making.

For both agenda items, background notes have been prepared by the UNCTAD secretariat to facilitate deliberations. The papers can be downloaded from the UNCTAD website:

General information on the session, including a provisional agenda for the meeting, is available on the United Nations website.

FASB discusses its technical agenda

Sep 20, 2017

At its September 20, 2017 meeting, the Financial Accounting Standards Board (FASB) discussed financial reporting issues identified in its agenda consultation project.

The FASB decided to add to its agenda three projects on the following topics:

  • Distinguishing liabilities from equity
  • Disaggregation of performance information
  • Segment reporting

In addition, the Board removed the following four topics from its research agenda:

  • Accounting for financial instruments: interest rate risk disclosures
  • Pensions and other post-retirement employee benefit plans
  • Intangibles (however, as part of its disclosure framework project, the Board will retain the portion of the intangibles project that focuses on developing qualitative disclosures)
  • The segment disclosure component of phase 2 of its project related to the financial statements of not-for-profit entities

Review the press release and tentative Board decisions on the FASB’s Web site.

FASB releases proposed 2018 financial reporting taxonomy and shared reporting taxonomy for public comment

Sep 05, 2017

On September 5, 2017, the Financial Accounting Standards Board (FASB) released for public comment its proposed 2018 U.S. GAAP financial reporting taxonomy and proposed 2018 shared reporting taxonomy.

The 2018 U.S. GAAP financial reporting taxonomy “contains updates for accounting standards and other recommended improvements,” while the 2018 shared reporting taxonomy “contains elements of the GAAP Financial Reporting Taxonomy needed by International Financial Reporting Standards (IFRS) filers for U.S. Securities and Exchange Commission-specific disclosure requirements.”

Comments on the proposed taxonomies are due by October 31, 2017. The SEC is expected to approve the taxonomies in early 2018.

Review the press release, proposed 2018 U.S. GAAP financial reporting taxonomy, and proposed 2018 shared reporting taxonomy on the FASB’s website.


IASB announces membership of the transition resource group for IFRS 17

Sep 21, 2017

On September 21, 2017, the International Accounting Standards Board (IASB) announced the members of a Transition Resource Group (TRG) that will focus on potential implementation issues associated with their new insurance contracts standard.

The TRG members comprise of auditors and preparers. In addition, there are three observers to the group from international security regulators, insurance supervisors and actuarial organizations. Francesco Nagari, Deloitte, Partner, global IFRS insurance leader, is among the members.

The first TRG meeting is scheduled for November 13, 2017.

Review the press release and the complete list of members on the IASB's website.

IASB Chairman speaks about the IASB and wider corporate reporting

Sep 18, 2017

On September 18, 2017, the International Accounting Standards Board (IASB) released a speech delivered at Accountancy Europe’s event "Shaping the future of corporate reporting" held in Brussels. In his speech, IASB Chairman Hans Hoogervorst discussed the relevance of financial reporting in a world where companies provide more and more non-financial information and are seeking a wider audience than investors alone.

Mr. Hoogervorst's main message at the beginning of his speech was: "Keep calm and carry on". He explained that he was not at all concerned that the relevance of financial reporting is under threat. He noted that financial statements are primarily backward looking and, therefore, always provide an important reality check. And he also noted that as more information becomes available, the more need there is for comparability, standardization and quality control.

Yet Mr. Hoogervorst also conceded that times are changing and everybody needs to adapt - including the IASB. He stressed the IASB's current effort at better communication in financial reporting. He noted a few projects and initiatives that form part of the effort and he also explained that the IASB may need to give preparers more guidance on how to provide context to their financial statements.

Also, Mr. Hoogervorst looked at environmental, social and governance (ESG) reporting and the question of whether the IASB should become active in that field. He noted that audience for sustainability reporting is broader than that of financial reporting and that much of sustainability reporting is primarily focused on the external effects of the performance of a company. Mr. Hoogervorst said that he believed that the IASB does not have the expertise to become the standard-setter in this field and that widening the audience and scope of the Board's work would most likely lead to loss of focus and identity.

However, Mr. Hoogervorst did not just leave it at that. He also followed up on the question who should take responsibility for harmonization of ESG requirements and try to prevent overload. He argued that since so much of ESG reporting is closely intertwined with public policy goals, public authorities would be best equipped to pursue harmonization.

Review the speech on the IASB's website.

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