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March 2016

Chief Accountant of the SEC comments on revenue recognition

Mar 24, 2016

On March 24, 2016, the Securities and Exchange Commission (SEC) released a speech from Jim Schnurr, Chief Accountant of the SEC, where he shared some of his thoughts and perspectives on the continuing transition activities for the new revenue standard at an accounting and reporting congress in Philadelphia.

One of the aspects Mr. Schnurr elaborated on was the status of the revenue transition resource group (TRG) formed jointly by the IASB and the FASB. In January this year, the IASB announced that it will no longer attend TRG meetings. The FASB declared in February that it will continue to address implementation issues and has scheduled three TRG meetings for 2016.

On this development, Mr. Schnurr commented:

While I am optimistic that the key practice issues that require standard setting have been identified through the implementation activities of preparers, auditors and standard setters, I am concerned that there are still a number of questions that would benefit from the TRG process. [...] Without joint participation of the IASB’s TRG in the coming scheduled FASB TRG meetings, there is a concern that IFRS 15 may be interpreted through a U.S. GAAP lens without the perspective of IFRS preparers.

He even went as far as suggesting that IFRS preparers could "provide input to the FASB staff and the FASB TRG participants to the extent they believe they have important factors that should be considered for discussion by the FASB TRG". At a minimum, he noted, he expected SEC registrants to monitor the TRG discussions and meeting minutes to inform their selection and implementation of reasonable policies.

Review the full text of Mr. Schnurr's speech on the SEC's website.

Comparison of materiality definitions and approaches by Corporate Reporting Dialogue participants

Mar 30, 2016

On March 30, 2016, the Corporate Reporting Dialogue (CRD), which brings together organizations that have significant international influence on the corporate reporting landscape, issued a statement comparing the definitions and approaches to materiality by CRD participants.

The statement includes a comparison of materiality from the following organizations:

  • CDP
  • Climate Disclosure Standards Board (CDSB)
  • Financial Accounting Standards Board (FASB)
  • Global Reporting Initiative (GRI)
  • International Accounting Standards Board (IASB)
  • International Integrated Reporting Council (IIRC)
  • International Organization for Standardization (ISO)
  • Sustainability Accounting Standards Board (SASB)

In October 2015, the IASB published an exposure draft on the concept of materiality, which explains and illustrates the concept of materiality and helps preparers of financial statements when applying the concept.

For more information, see the statement on the CRD’s website.

EFRAG and ICAS issue financial reporting research report

Mar 09, 2016

On March 9, 2016, the European Financial Reporting Advisory Group (EFRAG) and the Institute of Chartered Accountants of Scotland (ICAS) issued a research report, “Professional investors and the decision usefulness of financial reporting,” which examines the use of financial reporting by professional investors and how the results of the research may have standard setting implications.

The research report discovered that:

  • “The objective of investors (valuation or stewardship) does matter.
  • Investors are strongly anchored on the income statement.
  • Investors have strong reservations about the representational faithfulness of bottom line figures.
  • Regardless of its shortcomings, financial accounting information is a key input factor for investors' decision making.
  • The quality of corporate governance, including audit, influences investors' assessment of the representational faithfulness.”

In addition, the research report noted that (1) different objectives for financial reporting need to be prioritised by standard setters; (2) income statements were considered more useful than the balance sheet; (3) standardised performance measures for the income statement need to be enhanced; and (4) "investors' perceptions of corporate governance significantly affect their views of representational faithfulness."

For more information, see the press release and report on the EFRAG’s website.

IASB issues "Investor Update" newsletter

Mar 22, 2016

On March 22, 2016, the International Accounting Standards Board (IASB) issued the ninth edition of its newsletter “Investor Update,” which provides investors with quick access to information about current accounting and financial reporting topics.

This issue fea­tures:

  • An interview with the President of the Asian Infrastructure Investment Bank, Mr Jin Liqun.
  • An overview of key features in the new leases standard, IFRS 16.
  • Current pro­jects that need input from the in­vest­ment com­mu­nity.
  • A cal­en­dar of current events.

The In­vestor Update newslet­ter is avail­able on the IASB’s website.

IASB member discusses the disclosure initiative

Mar 18, 2016

On March 18, 2016, the International Accounting Standards Board member, Gary Kabureck, issued an article, “Footnotes of the Future — Reflections from the Disclosure Initiative.” In his article, he discusses the progress the Board has made to improve disclosure effectiveness and looks at the next steps for this project.

The article features:

  • Examples of how the amendments to IAS 1 in December 2014 helped preparers improve their financial reporting.
  • The importance of identifying the primary users.
  • An assessment of disclosure materiality.
  • Discussion on material and immaterial errors.

The full article is available on the IASB’s website.

IASB updates its work plan

Mar 18, 2016

On March 18, 2016, the International Accounting Standards Board (IASB) released its updated work plan.

Updates regarding the im­ple­men­ta­tion projects are:

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

IASB webcast on IFRS 16 transition now available

Mar 18, 2016

On March 18, 2016, the International Accounting Standards Board (IASB) made available a webcast related to IFRS 16 transition requirements for lessees, as part of its series on IFRS 16 implementation.

This webcast discusses the transition steps that a lessee is required to perform and includes highlights of available transition relief and the decisions that need to be made at each stage.

The webcast is available on the IFRS 16 implementation page on the IASB’s website.

Report on the February 2016 IFRS Advisory Council meeting

Mar 11, 2016

On March 11, 2016, the International Accounting Standards Board (IASB) released a summary of the IFRS Advisory Council meeting held in London on February 23–24, 2016. Highlights of the meeting will be thorough discussions of the review of structure and effectiveness of the IFRS Foundation and of the future of corporate reporting.

The report, prepared by Chair of the IFRS Advisory Council Joanna Perry, notes the following dis­cus­sions:

  • IASB ac­tiv­i­ties — Members received a report of recent ac­tiv­i­ties and were congratulatory of the IASB bringing together implementation and education into one unit.
  • Trustee ac­tiv­i­ties — Members received an updated on the January Trustees meeting and were presented with the IFRS Foundation Strategy approved by the Trustees.
  • Post-implementation reviews strategy — Members discussed the primary objective of PIR and when a PIR would be necessary.
  • Review of the structure and ef­fec­tive­ness of the IFRS Foun­da­tion — Members discussed governance aspects of the review.
  • IFRS Foundation funding — The Council believed it is useful for members to have access to an Aide-Memoire and that there may be opportunities for additional funding from the public.
  • Corporate reporting — Members discussed consultation documents from the Federation of European Accountants and the Financial Stability Board and the Carbon Tracker Initiative on the implications of climate change in financial and corporate reporting.
  • Conceptual framework — Members provided advice related to the conceptual framework exposure draft.

The full report on the council’s February meeting is available on the IASB's Web site.

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