October 2018

Summary of share-based payment research project issued

Oct 31, 2018

On October 31, 2018, the International Accounting Standards Board (the Board) issued "Share-based Payment — Research on Sources of Accounting Complexity", which summarizes the work performed and conclusions reached in the share-based payment research project.

Specifically, the project summary provides the following information:

  • At a glance — a high-level look at why the board performed this research, summary of findings, and feedback and conclusions.
  • Sources of information — sources used by the staff to conduct their research.
  • Research findings — summaries on variety and complexity of terms and conditions of share-based payments, grant-date fair value measurement, and disclosures.
  • Feedback on research findings and conclusions.
  • Measurement models in IFRS 2.
  • A look at what the information required by IFRS 2 tell users of financial statements.
  • Implications of other projects and IFRS Standards to IFRS2.

Review the press release and project summary on the Board's website.

Trends in SEC Non-GAAP Comment Letters 2016-2018

Oct 16, 2018

On October 16, 2018, Audit Analytics published an article looking at the trends of comment letters issued referencing form types 10-K, 10-K/A 10-Q, 10-Q/A and 8-K filings from January 2010 through June 2018. Their research shows an inverse relationship in the overall number of comment letters issued and the percent of letters referencing non-GAAP issues.

Here are the key findings:

  • The overall number of comment letters issued by the SEC has decreased since 2010
  • The percentage of comment letters referencing a non-GAAP metric increased through 2017, but has been trending downward in the first 6 months of 2018
  • The number and percentage of non-GAAP comment letters declined in 2018, while remaining above the 2015 level
  • The ratio of non-GAAP letters that focus on tailored accounting increased from 6.5% in the last 6 months of 2016 to 12.3% in the first 6 months of 2018, while the total number of comment letters in the same periods decreased from 2,876 to 1,475

Review the full article on Audit Analytics' website.

Updated IASB work plan — Analysis

Oct 26, 2018

On October 26, 2018, the International Accounting Standards Board (the Board) updated its work plan following its October 2018 meeting. Missing from the work plan is the fact that the Board has begun discussing possible amendments to IFRS 17, "Insurance Contracts" and plans to continue these discussions in the next months. Otherwise, changes to the work plan are few.

During its October meeting, the Board discussed the criteria the IASB® staff have developed for the Board to apply in assessing whether the concerns/issues identified by the staff warrants considering an amendment to IFRS 17. In a podcast, IASB member Darrel Scott noted that a decision is expected in 1-2 months. This is not reflected in the updated work plan yet.

Below is an analysis of all changes that were made to the work plan since our last analysis on September 25, 2018.

Maintenance projects

Research projects

Other projects

  • IFRS Taxonomy update — 2018 general improvements — A proposed update is expected in December 2018 (was: fourth quarter of 2018)

The revised IASB work plan is available on the Board's website.

WSS meeting sees fare-well speech by Michel Prada

Oct 01, 2018

On October 1, 2018, at the 2018 World Standard-setters Conference, Michel Prada, the outgoing Chair of the IFRS Foundation Trustees took leave of the members of the world standard setters community.

In his speech, Mr. Prada looked back over the long success story of IFRS Standards® that he had been closely involved with over twenty years. As he explained, the birth of the IFRS movement began, as many other movements do, with a crisis. In the late nineties, the Asian financial crisis hit a deeply fragmented accounting world, and in May 2000 IOSCO endorsed international financial reporting standards — in a meeting chaired by Michel Prada at that time. And while the SEC realized that it needed to protect investors that were increasingly investing abroad, the Enron scandal shook belief in US GAAP, and the international community came to the conclusion that "international accounting standards could not be drafted in Connecticut".

Mr. Prada explained how the European Union decided to adopt IFRS Standards from 2005 and how the EU, Hong Kong, South Africa, and others led the way in global adoption. Today, Mr. Prada stated, nine out of ten jurisdictions apply IFRS Standards, and many large jurisdictions that have not joined fully (yet) have either standards that are close to IFRS Standards or permit IFRS Standards — sometimes for certain groups only (Mr. Prada detailed the situation in China, India, Japan, and the US). He also touched upon the topic of consistent application. While there was still much to do and while, as Mr. Prada commented on one of the first adopters of IFRS Standards, "in Europe not everything is always easy" these days, he concluded that IFRS Standards have come of age.

Looking to the future of IFRS Standards, Mr. Prada talked about the relevance of accounting in an age of digital disruption and how IFRS Standards need to adapt and evolve. He also discussed broader corporate reporting and the need to cooperate globally to provide investors with a tool to assess companies performance across many fields. In this world, he maintained, IFRS Standards need looking after and sometimes even protection, but he did not doubt their relevance.

Taking leave of the standard-setters community, he urged his audience to deepen their cooperation, to develop standards together and to solve problems together. He ended with two strong messages: "IFRS Standards are not merely about standards, but also about people," he said, and "IFRS remains a shining example of what can be achieved when people work together."

Mr. Prada's term as Chair of the Trustee's ended in December 2017 but he agreed to stay on until a successor could be found. He will hand over to the designated Chair of the Trustees, Mr. Erkki Liikanen, at the Trustees' meeting in Johannesburg later this month.

Review the press release on the IASB's website.

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.