October 2018

IFRS Foundation Trustees chair discusses new role and upcoming priorities

Oct 18, 2018

On October 18, 2018, the International Accounting Standards Board (the Board) released an interview with Erkki Liikanen, Chair of the IFRS Foundation Trustees, where he provided his thoughts on his new role, financial reporting in the global economy, and his priorities for the Trustees.

Mr. Liikanen noted that financial reporting works best when standards and practices across jurisdictions are the same to maintain consistency and that the use of IFRS Standards have helped achieve this. In addition, he stated that his priorities for the Trustees are to look at core functions and strategies.

Review the interview on the Board’s website.

Insurance contracts transition resource group holds third technical meeting

Oct 08, 2018

On October 8, 2018, the International Accounting Standards Board (the Board) released a summary and recording of the Transition Resource Group (TRG) for Insurance Contracts' third technical meeting held on September 26-27, 2018.

The purpose of the TRG is to seek feedback on potential issues related to im­ple­men­ta­tion of IFRS 17, Insurance Contracts. Specifically, the TRG discussed the following:

  • Insurance risk consequent to an incurred claim
  • Determining discount rates using a top-down approach
  • Commissions and reinstatement premiums in reinsurance contracts issued
  • Premium experience adjustments related to current or past service
  • Cash flows that are outside the contract boundary at initial recognition
  • Recovery of insurance acquisition cash flows
  • Premium waivers
  • Group insurance policies
  • Industry pools managed by an association
  • Annual cohorts for contracts that share in the return of a specified pool of underlying items

A summary on the meeting and audio record­ings of each session are available on the TRG meeting page on the Boards’ website.

In addition, see the meeting summary and listen to the podcast on the Board's website.

IPSASB publishes finalised "Improvements to IPSAS, 2018"

Oct 26, 2018

On October 26, 2018, the International Public Sector Accounting Standards Board (IPSASB) published "Improvements to IPSAS, 2018", which sets out amendments to International Public Sector Accounting Standards (IPSAS) to address issues raised by stakeholders and to converge with amendments to IFRS® Standards.

The IFRS convergence amendments reflect the following International Accounting Standards Board (IASB) amendments:

  • Annual Improvements to IFRSs 2011 – 2013 Cycle (issued December 2013)
  • Disclosure Initiative (Amendments to IAS 7) (issued January 2016)
  • Transfers of Investment Property (Amendments to IAS 40) (issued December 2016)
  • Annual Improvements to IFRSs 2014 – 2016 Cycle (issued December 2016)
  • IFRIC 22 Foreign Currency Transactions and Advance Consideration (issued December 2016)
  • Annual Improvements to IFRS Standards 2015 – 2017 Cycle (issued December 2017)
  • Plan Amendment, Curtailment or Settlement (Amendments to IAS 19) (issued February 2018)

Review the final amendments Improvements to IPSAS, 2018 on the IPSASB's website.

New composition of ASAF announced

Oct 30, 2018

On October 30, 2018, the IFRS Foundation announced the new membership of the Accounting Standards Advisory Forum (ASAF) that is designed to formalize and streamline the relationships between the IFRS Foundation and International Accounting Standards Board (IASB) with the global standard-setting community.

The ASAF is comprised of 12 members and a non-voting chair. The new composition is as follows:

Geographical region ASAF member
Africa Pan African Federation of Accountants (PAFA)
Americas Group of Latin American Standard Setters (GLASS)
Canadian Accounting Standards Board
United States Financial Accounting Standards Board (FASB)
Asia/Oceania Accounting Standards Board of Japan (ASBJ)
Accounting Regulatory Department, PRC Ministry of Finance China
Korea Accounting Standards Board (KASB)
Asia Oceania Standard Setters Group (AOSSG)
Europe Autorité des normes comptables (ANC)
United Kingdom Financial Reporting Council (FRC)
Organismo Italiano di Contabilità (OIC)
European Financial Reporting Advisory Group (EFRAG)

Review the press release on the IASB's website.

Podcast on IFRS 17

Oct 26, 2018

On October 26, 2018, the International Accounting Standards Board (the Board) released a podcast on the discussions around IFRS 17, "Insurance Contracts" at their October 2018 meeting.

In the podcast, IASB® technical manager Roberta Ravelli interviews IASB Board member Darrel Scott. The interview is not so much about the details discussed by the Board, but more of a general and balanced assessment where the Board currently stands. During the meeting, the Board first discussed the criteria the IASB staff have developed for the Board to apply in assessing whether a concern warrants considering an amendment and then used these criteria in a kind of a test run against the 25 concerns/issues identified by the staff. However, no decisions were made.

By way of an outlook, Darrel Scott mentions in the interview that the IASB expects to make a decision in 1-2 months (the November meeting is rather early in the month and the deadline for the staff to submit papers would be at the end of next week). He also mentions that the Board would need to think about the effective date soon, as well as the implications changing the effective date would have.

Review the press release and listen to the podcast on the Board's website.

Podcast on proposed IFRS Taxonomy update issued

Oct 04, 2018

In October 2018, the International Accounting Standards Board (the Board) released a podcast with a high-level overview over the proposals included in the project "IFRS Taxonomy 2018 — Proposed Update 1 Common Practice (IFRS 13, "Fair Value Measurement")".

View the short overview (17 minutes) on YouTube.

Recent developments – Goodwill and Impairment Project

Oct 25, 2018

At its meeting on October 25, 2018, the International Standards Board (the Board) discussed the additional work to be performed in respect of its Goodwill and Impairment project before drafting a discussion paper, and the timing of that work.

The objective of the research project is to consider how to address the following three areas of focus identified in the Post-implementation Review ("the PIR") of IFRS 3 Business Combinations:

  1. whether changes should be made to the existing impairment test for goodwill and other non-current, non-financial assets;
  2. subsequent accounting for goodwill (including the relative merits of an impairment-only approach and an amortization and impairment approach); and
  3. the extent to which other intangible assets should be separated from goodwill.

At its meeting on October 25, 2018, the Board discussed the additional work to be performed in respect of its Goodwill and Impairment project before drafting a discussion paper, and the timing of that work. The Board did not make any decisions.

Previously at its meeting on July 18, 2018, the Board set three research objectives for the research project. One objective is to explore ways to improve disclosure requirements to enable investors to assess whether a business combination was a good investment decision and whether, after the acquisition, the acquired business is performing as was expected at the time of the acquisition. The Board also tentatively decided that the staff should not perform a complete review of all the disclosure requirements in IFRS 3, Business Combinations and IAS 36, Impairment of Assets. Feedback will be obtained from the Board’s consultative groups in November and December and the staff will report back to the Board at a future meeting.

For further details of these and other developments, refer to the project on the IASB’s website.

For details of the staff’s request for the Board to confirm the further work to be performed to achieve the research objective of identifying better disclosures that would enable investors to assess whether a business combination is a good investment decision and whether the acquired business is performing after the business combination as expected – see the  October 2018 Board Paper.

SEC amends property disclosure requirements for mining registrants

Oct 30, 2018

On October 31, 2018, the Securities And Exchange Commission (SEC) issued a final rule, “Modernization of Property Disclosures for Mining Registrants.”

The final rule aligns the property disclosure requirements for mining registrants and related guidance with current industry and global regulatory practices and standards. The amendments are designed to help investors “make more informed investment decisions”  about registrants’ mining properties.

The SEC has adopted a “two-year transition period so that a registrant will not begin to comply with the new rules until its first fiscal year beginning on or after Jan. 1, 2021.”

Review the press release and final rule on the SEC’s website.

SEC issues report on cyber-related frauds perpetrated against public companies

Oct 16, 2018

On October 16, 2018, the Securities and Exchange Commission (SEC) issued a report about companies with deficient internal controls – in particular, nine unnamed companies that became victims of a cyberfraud called “business email compromises.”

As noted in an article from the Journal of Accountancy, there were two kinds of business email compromises — emails from fake executives and ones from fake vendors.

In schemes involving emails from fake executives – also called “executive impersonation” – fraudsters not affiliated with a company use spoofed email addresses to send communications that appeared to come from a company executive, typically the CEO. Sometimes, the spoofed emails used real law firm and attorney names. The executive impersonation emails often had these common elements:

  1. Referred to time-sensitive “deals” that needed to be completed within days, emphasizing the need for secrecy from other company employees and sometimes suggested some form of government oversight.
  2. Claimed that the requested funds were needed for foreign transactions – and all directed the wire transfers to foreign banks. The emails provided minimal details about the transaction – and while all of the companies had some foreign operations, these types of foreign transactions would have been out of the ordinary.
  3. Typically went to mid-level personnel who rarely communicated with the executives being spoofed – and who typically were not involved in the supposed transactions.

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

SEC mulls consultation on easing quarterly reporting rules

Oct 17, 2018

On October 17, 2018, Reuters published an article that discusses how the Securities and Exchange Commission (SEC) said in a notice that it will consider seeking public comment on ways to ease the quarterly reporting burden on publicly listed companies.

However, SEC Chairman Jay Clayton, a Trump appointee, last week told an audience in Washington that the regulator was in no rush to change quarterly reporting requirements for large publicly-traded companies.

“I don’t think quarterly reporting is going to change for our top names anytime soon,” said Clayton. But he said the SEC could study the disclosure requirements for smaller firms.

Review the full article on Reuter's website, an article on Cooley PubCo's webiste and the latest “Reg Flex Agenda”, which indicates that a proposal for semi-annual reporting is forthcoming.

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