January 2017

IASB posts update on insurance webinars

Jan 10, 2017

On January 10, 2017, the International Accounting Standards Board (IASB) released a webinar that provides an updated overview of the forthcoming insurance contracts Standard reflecting decisions made in November.

In April and May 2016, the IASB posted a series of eight webinars on the forthcoming Standard.

The new webinar covers:

  • The need for change and the history of the project
  • Level of aggregation
  • Applying the Standard for the first time

Please click to access the update, as well as all previous webinars, on the IASB's website.

IASB publishes proposals for amendments under its annual improvements project (cycle 2015-2017)

Jan 12, 2017

On January 12, 2017, the International Accounting Standards Board (IASB) published an exposure draft "Annual Improvements to IFRS Standards 2015–2017 Cycle". It contains proposed amendments to three International Financial Reporting Standards (IFRSs) as result of the IASB's annual improvements project. Comments are requested by April 12, 2017.

The IASB uses the annual improvements process to make necessary, but non-urgent, amendments to IFRSs that will not be included as part of another major project.

The ED proposes the following amendments:

Standard Subject of proposed amendment
IAS 12 Income Taxes

To clarify that the requirements in the existing paragraph 52B (to recognise the income tax consequences of dividends where the transactions or events that generated distributable profits are recognised) apply to all income tax consequences of dividends by moving the paragraph away from existing paragraph 52A that only deals with situations where there are different tax rates for distributed and undistributed profits

IAS 23 Borrowing Costs

To clarify that when an asset is ready for its intended use or sale, an entity treats any outstanding borrowing made specifically to obtain that asset as part of the funds that it has borrowed generally

IAS 28 Investments in Associates and Joint Ventures

To clarify that an entity applies IFRS 9 Financial Instruments to long-term interests in an associate or joint venture that form part of the net investment in the associate or joint venture but to which the equity method is not applied

ED/2017/1 Annual Improvements to IFRS Standards 2015–2017 Cycle does not contain proposed effective dates for the proposed amendments to IAS 12 and IAS 23 as the intention is to decide on these after the exposure period. However, it is proposed that the amendments to IAS 28 should be effective for annual periods beginning on or after January 1, 2018 to align their effective date with the effective date of IFRS 9.

As for the proposed amendments to IAS 28, the ED contains a dissenting opinion as one Board member disagrees amending IAS 28 as proposed without also specifying the types of interests that an entity accounts for using the equity method and the types of interests that an entity accounts for applying IFRS 9.

Review the following additional information:

IFAC updates Policy Position Paper on enhancing organizational reporting

Jan 10, 2017

On January 10, 2017, the International Federation of Accountants (IFAC) issued an updated version of its Policy Position Paper 8 on enhanced organizational reporting. The update emphasizes IFAC's position that integrated reporting is the way to achieve a more coherent corporate reporting system, fulfilling the need for a single report that provides a fuller picture of organizations’ ability to create value over time.

While IFAC had originally maintained that there are a range of different organizational reporting frameworks and that it was important to examine the relationship between these frameworks, this position has now been modified and IFAC puts the International Integrated Reporting Council (IIRC) and the implementation of its Framework first claiming that integrated reporting is the key to enhanced organizational reporting. The paper states:

[T]he integrated report can be used as an “umbrella” report for an organization’s broad suite of reports and communications, enabling greater interconnectedness between different reports and recognizing that there is a range of different frameworks and regulations available, and under development.

The updated version of the paper also includes a new section that describes integrated reporting in more detail.

Review the following information on the IFAC's website:

President-elect Trump nominates new SEC chairman

Jan 04, 2017

On January 4, 2017, President-elect Donald Trump announced that he intends to nominate Jay Clayton as chairman of the US Securities and Exchange Commission (SEC).

Mr. Clayton would replace Mary Jo White, who announced in November 2016 that she will leave the SEC at the end of the Obama Administration. Mr Clayton’s appointment is contingent on a Senate confirmation vote.

Review the press release on the president-elect’s transition website.

Putting IFRS 16 into practice, practical implementation advices from IASB

Jan 13, 2017

In January 2017, the International Accounting Standards Board (IASB) published an article featuring four IASB members discussing the messages they have heard from stakeholders about IFRS 16 implementation over the last year and advice to companies implementing the new standard.

  • IASB Vice-Chair Sue Lloyd discusses transition options and benefits;
  • IASB Member Gary Kabureck explains early planning and practical steps;
  • IASB Member Darrel Scott expands on judgements and discount rates; and
  • IASB Member Stephen Cooper examines investor expectations and lease disclosures between now and 2019.

Review the article on the IASB's website.

SEC acting chairman directs the staff to reconsider conflict minerals guidance

Jan 31, 2017

On January 31, 2017, Michael Piwowar, who was recently appointed as acting chairman of the Securities and Exchange Commission (SEC), made public statements related to the Commission’s 2014 guidance on its August 2012 final rule on conflict minerals.

The SEC partially stayed compliance with the conflict minerals rule after an April 2014 appellate court ruling found that the rule violated the First Amendment of the U.S. Constitution. Mr. Piwowar noted:

"[T]he temporary transition period provided for in the Rule has expired. And the reporting period beginning January 1, 2017, is the first reporting period for which no issuer falls within the terms of that transition period. In light of this, as well as the unexpected duration of the litigation, I am directing the staff to consider whether the 2014 guidance is still appropriate and whether any additional relief is appropriate in the interim."

A comment letter page has been set up on the SEC’s Web site.

Review Mr. Piwowar’s statements on the conflict minerals rule and on the reconsideration of the rule’s implementation on the SEC’s Web site.

SEC Chair states that high-quality, globally accepted accounting standards are a "U.S. Imperative"

Jan 05, 2017

On January 5, 2017, the U.S. Securities and Exchange Commission (SEC) released a public statement on global accounting by Mary Jo White, Chair of the SEC, where she stressed that the strength of the U.S. capital markets depended on investors knowing that they could rely on the financial information that is available to them when they make investment decisions. And since U.S. investors also made many investment decisions using IFRS financial statements, ensuring that IFRS, as well as U.S. GAAP, are of the highest quality was one of the Commission's "highest priorities".

While Ms. White acknowledged that there had been no formal action by the Commission since 2010 and that any further action would be in the responsibility of the new SEC Chair Clayton, she nevertheless described the last years as a success.

She also noted that this progress was very important and that it needed to continue as both Boards, as well as investors, would benefit greatly from their sustained engagement.

Review the full statement on the SEC's website.

SEC publishes examination priorities for 2017

Jan 12, 2017

On January 12, 2017, the Securities and Exchange Commission’s (SEC) Office of Compliance Inspections and Examinations published its examination priorities for 2017.

The priorities focus on electronic investment advice, money market funds, and financial exploitation of senior investors. In addition, the priorities “reflect a continuing focus on protecting retail investors, including individuals investing for their retirement, and assessing market-wide risks.”

The document is not necessarily comprehensive and “may be adjusted in light of market conditions, industry developments, and ongoing risk assessment activities.”

Review the press release and the 2017 examination priorities on the SEC’s website.

Should the FASB have a role in sustainability disclosures?

Jan 13, 2017

In January 2017, the Financial Accounting Standards Board (FASB) released the newest FASB Outlook newsletter, which includes a contribution by FASB member Marc Siegel. The article is a reaction to questions raised as to whether the FASB should promulgate standards requiring corporate disclosures about sustainability or environmental, social, and governance (ESG) issues.

In the article, Mr. Siegel concludes that the answer to the question of whether FASB should engage in sustainability and/or ESG issues "is not binary". He notes that the Board engages where those issues are within the boundaries of financial reporting set forth by the FASB's Conceptual Framework, but that not all sustainability or ESG information is within the boundaries.

Review the article on the FASB's website.

Summary of the December 2016 ASAF meeting now available

Jan 24, 2017

On January 24, 2017, the staff of the International Accounting Standards Board (IASB) made available a summary of the discussions of the Accounting Standards Advisory Forum (ASAF) meeting held in London on December 8–9, 2016.

The topics covered during the meeting included:

  • Conceptual Framework for Financial Reporting
  • Country-by-country reporting
  • IFRS 13 Fair Value Measurement—Post -implementation Review
  • Rate-regulated Activities
  • Disclosure Initiative
  • Digital currency
  • Financial Instruments with Characteristics of Equity
  • Insurance Contracts project
  • Update by ASAF members on activities
  • Project updates and agenda planning

A full summary of the meeting is available on the IASB's website.

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