September 2019

AcSB response – Annual Improvements to IFRS® Standards 2018-2020 Exposure Draft

Sep 09, 2019

On September 9, 2019, the Accounting Standards Board's (AcSB) response to the International Accounting Standards Board’s (IASB) Exposure Draft, Annual Improvements to IFRS® Standards 2018-2020, was published.

The AcSB continues to strongly support the IASB in its efforts to identify and address standards implementation issues.

Overall, the letter agrees with most of the proposals but recommends that the IASB provide additional guidance to IFRS 16 Leases, to clarify when the reimbursement of leasehold improvements will be identified as a lease incentive.

Review the press release on the AcSB's website and the full letter on the IASB's website.

CRD launches report on alignment between its members' sustainability standards and frameworks and the TCFD recommendations

Sep 24, 2019

At the World Congress of Accountants in Australia in November 2018, the Corporate Reporting Dialogue (CRD), which brings together organisations that have significant international influence on the corporate reporting landscape, announced a two-year project focused on aligning the standards and frameworks of its members. A report 'Driving Alignment in Climate-related Reporting' was now launched amongst businesses and investors at the World Economic Forum’s Sustainable Development Impact Summit, during Climate Week NYC.

The publication maps the better alignment project participants’ standards and frameworks against the seven principles for effective disclosure, the 11 recommended disclosures and 50 illustrative example metrics detailed in the recommendations published by the Task Force on Climate-related Financial Disclosure (TCFD) in June 2017. It also documents the commonalities and differences between the participants within the parameters of the TCFD recommendations’ example metrics.

Participants of the CRD project on better alignment are the Carbon Disclosure Project (CDP), the Climate Disclosure Standards Board (CDSB), the Global Reporting Initiative (GRI), the International Integrated Reporting Council (IIRC), and the Sustainability Accounting Standards Board (SASB). Additional members of the CRD are the Financial Accounting Standards Board (FASB, observer), the International Accounting Standards Board (IASB), and the International Organization for Standardization (ISO).

The mapping in the report shows strong alignment between the participants’ frameworks and standards and the TCFD recommendations, specifically:

  • The TCFD’s seven ‘Principles for Effective Disclosures’ are harmonious and complementary with those of the participants’ frameworks and standards, with the mapping showing no sources of conflict.
  • The participants are well-aligned with the TCFD’s 11 recommended disclosures, each of which is comprehensively covered by the frameworks and standards.
  • Overall, 80% of the TCFD’s 50 illustrative metrics are fully or reasonably covered by CDP, GRI and SASB indicators.
  • There are high levels of alignment between CDP, GRI and SASB for the TCFD’s illustrative example metrics, with 70% of the TCFD’s 50 metrics showing no substantive difference between the participants’ indicators. For the remaining 15 indicators, substantive differences are limited.

Review the full report and more information on the CRD's website.

Deloitte's Richard Olfert appointed as vice-chair for CPA Canada

Sep 19, 2019

On September 19, 2019, CPA Canada announced the appointment of a new vice-chair for the organization’s board of directors.

As the new vice-chair, Mr. Olfert brings 30 years of world-class financial insight to companies across Canada in the public, private and not-for-profit sectors. Olfert is Deloitte Canada’s Managing Partner, Regulatory, Quality, Risk & Reputation. From 2013 to 2016, he was the firm’s Managing Partner, Audit. He leads The Deloitte Institute for Audit Innovation and Quality, a destination for sound-thinking on audit quality and perspectives on how audits should be performed in future.

Review the press release on the CPA Canada's website.

Democratic senators call on FASB for more international disclosures

Sep 30, 2019

On September 30, 2019, the US Senate released a letter asking the Financial Accounting Standards Board (FASB) Chairman Russell Golden to require companies to break out more information on a country-by-country basis.

The senators want companies to provide country-specific information on their income, assets, number of employees, and taxes paid.

FASB is in the midst of reviewing tax disclosure requirements, and the letter was in response to a revised exposure draft on the proposed Accounting Standards Update to Income Taxes (Topic 740).

Review the letter on US Senate's website and a summary on Accounting Today's website.

FASB proposes amendments to classification of debt that would bring US GAAP and IFRSs closer together

Sep 12, 2019

On September 12, 2019, the US standard-setter FASB issued a revised version of its proposed Accounting Standards Update (ASU) "Simplifying the Classification of Debt in a Classified Balance Sheet (Current Versus Noncurrent)." Comments are requested by October 28, 2019.

The proposed amendments would make US GAAP more consistent with IFRSs, especially with IAS 1 Presentation of Financial Statements that includes guidance on the classification of liabilities. The exposure draft notes that FASB leveraged IAS 1 guidance when developing its proposals for the classification of debt. Furthermore, the FASB’s decision on applying the debt classification principle to post-balance-sheet refinancings of debt is consistent with the guidance in IAS 1. However, differences would still remain between US GAAP and IFRSs for classifying debt arrangements with covenant violations.

The IASB currently has a project on its agenda to amend IAS 1 that is specifically related to the classification of liabilities. Final amendments to IAS 1 are currently expected in the fourth quarter of 2019.

Review the press release and exposure draft on the FASB's website.

FRC Lab report on cash disclosures

Sep 25, 2019

In September 2019, the Financial Reporting Lab of the UK Financial Reporting Council (FRC) released a report that considers disclosures on the sources and uses of cash.

The report considers how companies can answer investors’ questions about how a company generates cash and how it intends to use that cash. It provides practical guidance on how companies can give more information and context around its cash disclosures, beyond those in the cash flow statement including business model disclosures, capital allocation frameworks, reverse factoring arrangements and many others. It also includes several practical examples.

Review the report from the FRC's website.

IASB chair speaks in South Korea

Sep 04, 2019

On September 4, 2019, the International Accounting Standards Board (IASB) released a keynote speech given at an event organized to celebrate the 20th anniversary of the Korea Accounting Standards Board (KASB). In his speech, IASB chair Hans Hoogervorst discussed Korea’s contribution to international standard-setting through history and remaining relevant in the future.

Mr. Hoogervorst began by reflecting on the IASB's history with the KASB. He moved on to discuss the future of financial reporting and remaining relevant in a changing world. He noted, 'To remain relevant, we must adapt.' He reiterated his view that the IASB is unlikely to tackle sustainability reporting standards, but noted their importance. He also pointed to the work the KASB is doing to shrink the gap between book value and market value of companies — the KASB is researching the possibility of a separate 'Statement of Key Intangibles'. 

Review the transcript of Mr. Hoogervorst's speech on the IASB's website.

IASB Chairman opens WSS meeting

Sep 30, 2019

On September 30, 2019, the International Accounting Standards Board (IASB) released the opening remarks of IASB Chairman Hans Hoogervorst delivered at the World Standard-Setters (WSS) meeting held in London.

The focus of Mr. Hoogervorst's speech was the IASB's work programme for 2020, which will see three exposure drafts, two discussion papers, and three requests for views.

On individual projects, Mr. Hoogervorst spoke about

  • Primary financial statements. The IASB plans to publish an exposure draft at the end of 2019. The IASB is looking at introducing new subtotals in the income statement, is looking at improving discipline around management performance measures, and wants to improve disaggregation.
  • Goodwill and impairment. The IASB plans to publish a discussion paper in February 2020. While the IASB feels that the impairment model is not great, they are not sure whether any of the alternatives are better. By publishing a discussion paper, the IASB is hoping for new evidence and insights.
  • Rate-regulated activities. The IASB will publish an exposure draft in the first half of 2020. The IASB has developed an accounting model that will improve the information to investors about what rights and obligations a company has and is looking for feedback whether they have got the model right.

The IASB is also going to consult on a revised Management Commentary Practice Statement, on proposals on business combinations under common control, on whether the IFRS for SMEs should be updated to reflect changes in full IFRSs, and on the future agenda of the IASB.

Review the full transcript of Mr. Hoogervorst's speech on the IASB's website.

IASB finalizes phase 1 of its IBOR reform project

Sep 26, 2019

On September 26, 2019, the International Accounting Standards Board (IASB) published "Interest Rate Benchmark Reform (Amendments to IFRS 9, IAS 39 and IFRS 7)" as a first reaction to the potential effects the IBOR reform could have on financial reporting. The amendments are effective for annual periods beginning on or after January 1, 2020, with earlier application permitted.



Interbank offered rates (IBORs) are interest reference rates, such as LIBOR, EURIBOR and TIBOR, that represent the cost of obtaining unsecured funding, in a particular combination of currency and maturity and in a particular interbank term lending market. Recent market developments have brought into question the long-term viability of those benchmarks.

The amendments published today deal with issues affecting financial reporting in the period before the replacement of an existing interest rate benchmark with an alternative interest rate and address the implications for specific hedge accounting requirements in IFRS 9, Financial Instruments and IAS 39, Financial Instruments: Recognition and Measurement, which require forward-looking analysis. (IAS 39 is amended as well as IFRS 9 because entities have an accounting policy choice when first applying IFRS 9, which allows them to continue to apply the hedge accounting requirements of IAS 39. ) There are also amendments to IFRS 7, Financial Instruments: Disclosures regarding additional disclosures around uncertainty arising from the interest rate benchmark reform.



The changes in Interest Rate Benchmark Reform (Amendments to IFRS 9, IAS 39 and IFRS 7)

  • modify specific hedge accounting requirements so that entities would apply those hedge accounting requirements assuming that the interest rate benchmark on which the hedged cash flows and cash flows from the hedging instrument are based will not be altered as a result of interest rate benchmark reform;
  • are mandatory for all hedging relationships that are directly affected by the interest rate benchmark reform;
  • are not intended to provide relief from any other consequences arising from interest rate benchmark reform (if a hedging relationship no longer meets the requirements for hedge accounting for reasons other than those specified by the amendments, discontinuation of hedge accounting is required); and
  • require specific disclosures about the extent to which the entities' hedging relationships are affected by the amendments.


Effective date

The amendments are be effective for annual periods beginning on or after January 1, 2020 and must be applied retrospectively. Early application is permitted.


Additional information

In September 2019, the IASB began discussions on IBOR reform and the effects on financial reporting - Phase 2. The second phase of the project deals with issues that might affect financial reporting when an existing interest rate benchmark is actually replaced.

IASB publishes "Investor Perspectives" article on proposed amendments to IFRS 17

Sep 04, 2019

On September 4, 2019, the International Accounting Standards Board (the Board) issued the latest issue of "Investor Perspectives." In this edition, IASB board member Nick Anderson discusses the new disclosures in the targeted amendments to IFRS 17.

Specifically, this issue features insight into the proposed amendments related to commission paid on short-term insurance contracts with expected renewals and profit recognition on long-term insurance contracts with investment returns.

Review the press release and Investor Per­spec­tives article on the Board's website.

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