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April 2017

AcSB Exposure Draft – Improvements to IFRS 8 Operating Segments (Proposed amendments to IFRS 8 and IAS 34)

Apr 28, 2017

On April 28, 2017, the Accounting Standards Board (AcSB) issued its Exposure Draft that corresponds to the IASB’s Exposure Draft on this topic. Stakeholders are encouraged to submit their comments by July 31, 2017.

The proposed amendments:

  • clarify and emphasize the criteria that must be met before two operating segments may be aggregated;
  • require disclosure of the title and role of the person or group that performs the function of the chief operating decision maker;
  • require entities to provide information in the notes to the financial statements if segments in the financial statements differ from segments reported elsewhere in the annual report and in accompanying materials; and
  • require entities that change their segments to provide restated segment information for prior interim periods earlier than they currently do.

Review the Exposure Draft on the AcSB's website.

AcSB Exposure Draft – Prepayment Features with Negative Compensation (Proposed amendments to IFRS 9)

Apr 21, 2017

On April 21, 2017, the Accounting Standards Board (AcSB) issued an Exposure Draft that corresponds to the IASB’s Exposure Draft on this topic. Stakeholders are encouraged to submit their comments by May 24, 2017.

The proposed amendments would allow for a narrow exception to IFRS 9 that would permit particular financial instruments with prepayment features with negative compensation to be eligible for measurement at amortized cost or at fair value through other comprehensive income.

Review the Exposure Draft on the AcSB's website.

AICPA drafts revenue recognition guidance for airline, gaming, hospitality and time share industries

Apr 03, 2017

On April 3, 2017, the American Institute of CPAs’ (AICPA) Financial Reporting Executive Committee issued 11 new working drafts to help four different industries deal with the upcoming revenue recognition accounting standard.

The accounting issues relate to implementation of the new standard for the airline, gaming, hospitality and time-share industries and the AICPA is asking for feedback on the documents.

The accounting standards update will eliminate the transaction- and industry-specific revenue recognition guidance under current U.S. GAAP and replace it with a principles-based approach for determining revenue recognition. However, the AICPA has been working on a series of documents to help various industries cope with the transition to the new standard, which takes effect next year for public companies and in 2019 for private companies.

Review the working drafts on the AICPA's website and an article on Accounting Today's website.





The AICPA FinREC is asking for feedback on the drafts by June 1, 2017.

Article on investor event on better communication

Apr 04, 2017

On April 4, 2017, the International Accounting Standards Board (IASB) released an article summarizing a joint event for investors hosted by the IFRS Foundation and the CFA Institute on March 29, 2017 entitled "Better Communication in Financial Markets: Sharing Perspectives".

The better communication discussion was for a large part held under Chatham House rules, but saw directly attributable contributions by IASB Chairman, Hans Hoogervorst, who explained the IASB's position around alternative performance measures and the IASB's primary financial statements project. He believed that the IASB "should definitely have a go at defining EBIT" – a position also evidenced by the Board discussions on primary financial statements in March 2017 and the recently published discussion paper on principles of disclosures, which features a section on the use of performance measures in the financial statements.

Gary Baker, managing director of CFA Institute in EMEA, stressed there is a need to improve the presentation of financial statements to investors and to better connect all the different strands of information released by companies and pointed at the institute's recent studies on non-GAAP financial measures.

Review the article on the IASB's website.

BCBS frequently asked questions on changes to lease accounting

Apr 06, 2017

On April 6, 2017, the Basel Committee on Banking Supervision (BCBS) released responses to frequently asked questions related to the changes to lease accounting promulgated by the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB).

More of a regulatory than accounting nature, the three questions are all related to the right of use asset and the question whether this is a tangible or an intangible asset.

Review the FAQ on the Bank for International Settlements' website.

IASB chair speaks on integrated reporting

Apr 27, 2017

On April 27, 2017, the International Accounting Standards Board (IASB) released a speech by IASB chair Hans Hoogervorst, given at the International Integrated Reporting Council’s (IIRC) council meeting, where he discussed the IASB’s approach to wider corporate reporting landscape, as well as the IASB’s conceptual framework and practice statement on management commentary related to integrated reporting.

Mr. Hooger­vorst began by saying that the IASB is currently examining what the future role of IASB should be in regards to wider corporate reporting. The IASB initiated discussions during its March 2017 meeting. He mentioned that certain information that is needed by users to determine an entity’s value, such as a company’s intangibles, are not recognized in the financial statements. As stated in the IASB’s conceptual framework, the “general purpose financial reports are not designed to show the value of a reporting entity.” Mr. Hoogervorst noted that additional useful information needed to determine an entity’s value is often found integrated reporting.

In addition, Mr. Hoogervorst discussed the IASB’s 2010 Management Commentary Practice Statement. He stated that the practice statement encouraged managers to provide important context for the financial statement. This context is also considered an important component of integrated reporting. He concluded that there is “common ground between financial and integrated reporting.”

Lastly, he discussed that additional guidance has been issued by the UK Financial Reporting Council’s Strategic Report Guidance and the IIRC’s International <IR> Framework and that based on these documents as well as other considerations, the IASB may consider updating its practice statement.

Review the speech on the IASB’s website.

IASB proposes amendments to IFRS 9 regarding the classification of certain prepayable financial assets

Apr 21, 2017

On April 21, 2017, the International Accounting Standards Board (IASB) published an exposure draft "Prepayment Features with Negative Compensation (Proposed amendments to IFRS 9)" to address the concerns about how IFRS 9 "Financial Instruments" classifies particular prepayable financial assets. Comments are requested by May 24, 2017.

Suggested changes

The Board followed the Interpretations Committee's reasoning and therefore ED/2017/3 Prepayment Features with Negative Compensation (Proposed amendments to IFRS 9) proposes a narrow exception to IFRS 9 for particular financial assets that would otherwise have contractual cash flows that are solely payments of principal and interest but do not qualify for amortised cost or fair value through other comprehensive income measurement as a result of a prepayment feature.

The Board proposes that such a financial asset would be eligible to be measured at amortised cost or at fair value through other comprehensive income (depending on a company's business model) if two conditions are met.

The ED also contains proposed amendments to IFRS 7 and IFRS 1 for cases where it is impracticable to assess whether the fair value of a prepayment feature was insignificant at initial recognition.


Effective date and transition requirements

The proposed effective date of the amendments is January 1, 2018 (to coincide with the effective date of IFRS 9). The exception would be applied retrospectively, however, certain relief is granted if at the date of initial application it is impracticable for an entity to assess whether the fair value of a prepayment feature was insignificant at initial recognition of the financial asset.


Comment deadline

The IASB argues that the matter is narrow in scope and urgent. Consequently, comments on the ED are requested by May 24, 2017.


Next steps

In order to meet the intended effective date of January 1, 2018, the Board follows a very tight project timeline. After the end of the comment period in May, the Board intends to redeliberate the issue in June and July 2017 and (if it decides to proceed with the proposed amendments) issue a final amendment by the end of October 2017.


Additional information

IASB video on loan loss accounting and financial stability

Apr 25, 2017

On April 25, 2017, the International Accounting Standards Board (IASB) released a video on loan loss accounting requirements, financial stability, and the relationship between IFRS 9 and bank regulators’ capital requirements. The topics are discussed by IASB Vice-Chair Sue Lloyd as well as IASB members Stephen Cooper and Darrel Scott.

The video is available on the IASB’s website.

IFRS Foundation Annual Report 2016

Apr 25, 2017

On April 25, 2017, the IFRS Foundation (IFRSF) published its Annual Report for 2016, titled "Better Communication in Financial Reporting".

The report for 2016 provides an overview of the IFRS Foundation’s activities during the year and sets out the Foundation’s plans for 2017 and beyond. The report addresses in particular the large projects that are set for completion (Insurance contracts and Conceptual Framework).

Review the report on the IASB's website.

Insights into integrated reporting

Apr 24, 2017

In April 2017, the Association of Chartered Certified Accountants (ACCA) published a report which highlights the benefits and challenges that early integrated reporting adopters have experienced and gives practical recommendations to those that are yet to adopt.

The the report is based on a study by the ACCA, who worked with the International Integrated Reporting Council (IIRC), from July to October 2016 to review 41 corporate reports produced by participants of the IIRC's Business Network.

Review the report on the ACCA's website.

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