October 2017

IASB issues "Investor Update" newsletter

Oct 09, 2017

On October 9, 2017, the International Accounting Standards Board (IASB) issued the fourteenth edition of its newsletter "Investor Update", which provides investors with quick access to information about current accounting and financial reporting topics.

This issue features:

  • Challenges and approaches to defining an EBIT subtotal
  • Analysis of the disclosures in the 2016 annual and 2017 interim reports related to the implementation of IFRS 15, Revenue from Contracts with Customers
  • Project updates
  • Information on investor materials and current events

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

IASB posts webcast on IFRS 16 lease term requirements

Oct 02, 2017

On October 2, 2017, as part of the International Accounting Standards Board (IASB) webcast series on IFRS 16 implementation, the IASB staff made available a webcast related to IFRS 16 lease term requirements.

This webcast is hosted by IASB Board member, Darrel Scott, and addresses four implementation questions raised by stakeholders.

Review the press release and webcast on the IASB’s website.

IASB posts webcast on IFRS 9 disclosure requirements

Oct 03, 2017

On October 3, 2017, the International Accounting Standards Board (IASB) staff made available a webcast which provides a high-level discussion on key disclosure requirements in IFRS 9 and the importance of high-quality disclosure information.

The requirements in IFRS 9, Financial Instruments are different from those in IAS 39 in many aspects, and for some, it will result in a significant change in the information provided in the financial statements. High quality disclosures are important for investors and others to understand what has changed in the transition from IAS 39 to IFRS 9, and to understand the basis for the new amounts reported in the financial statements.

Review the press release and webcast on the IASB’s website.

IFRS Foundation issues case study report on disclosure improvements

Oct 05, 2017

On October 5, 2017, the IFRS Foundation has issued a case study report, “Better Communication in Financial Reporting — Making disclosures more meaningful.” The case study report looks at six companies from varied industries and describes their process to improve disclosures.

The case study report provides illustrations before and after the companies implemented a change in the way they communicated the information and connects the changes to relevant principles within the IASB’s Discussion Paper Disclosure Initiative — Principles of Disclosure.

Review the press release and case study report on the IASB’s website.

IIRC publishes results of integrated reporting implementation survey

Oct 13, 2017

In October 2017, the International Integrated Reporting Council (IIRC) released the results of a survey, that it had conducted earlier this year, on how companies are adopting integrated reporting since the International <IR> Framework was released in 2013.

The feedback received indicated that the Framework stands up well to the challenges of implementation. However, several opportunities to provide guidance and examples and take other actions to help report preparers and other stakeholders, who continue to tackle challenges, were also identified. In fact, the report identifies 48 actions the IIRC currently proposes taking, based on the preliminary analysis of the feedback. Some of these actions would also include updates to the framework itself. However, the report also acknowledges the need for a stable platform:

There is clearly a choice to be made between giving sufficient time for companies to implement the Framework without changes being made, and updating the Framework in the light of experience and external developments. We have carefully considered the small number of suggestions made in this exercise for Framework revisions, and concluded that none are of immediate concern to justify making those changes now.

Review the report from the IIRC's website.

Paper on the transition to full adoption of new revenue recognition requirements

Oct 24, 2017

In 2017, the CFA Institute, a global association of investment professionals, published "Revenue Recognition Changes".

About two months remain until the beginning of 2018 when all public companies reporting on a US GAAP and International Financial Reporting Standards (IFRS) basis adopt the revised revenue recognition requirements. The paper examines reporting patterns that have begun to crystallise in the transition to full adoption although it notes:

Notably, many companies seem to be crawling to the starting line. Very few companies have been early adopters. At the same time, insightful numerical information on anticipated impacts from those that are yet to adopt is limited.

The paper also reviews selected critical judgments that could affect reported revenue.

Review the full paper on the CFA Institute's website.

Recent sustainability and integrated reporting developments

Oct 03, 2017

A summary of recent developments at IIRC/ICAS, WBCSD and SASB.

The International Integrated Reporting Council (IIRC) and the Institute of Chartered Accountants of Scotland (ICAS) published a new report describing how businesses can achieve Sustainable Development Goals (SDGs). The report argues that corporate reporting frameworks can play a critical role in enhancing corporate contribution to the SDGs.

The World Business Council for Sustainable Development (WBCSD) launched the Reporting Exchange, a free, online platform designed to help businesses find trustworthy, up to date and accessible sustainability-related information – making it easier for businesses to know what, when and how to report.

The Sustainability Accounting Standards Board (SASB) opened its full suite of sustainability reporting guidelines to public comment. The exposure drafts, which impact 79 industries, are open for a 90-day public comment period.

Research into the local implementation of the EU Directive on disclosure of non-financial and diversity information

Oct 02, 2017

On November 22, 2017, Accountancy Europe, CSR Europe, and GRI will present and discuss their new research looking at the local implementation of the EU Directive on non-financial and diversity information reporting.

The research outlines the principal elements of the 28 Member States’ laws, and will provide insight on the direction non-financial reporting is headed in Europe. The November 22 event will address how the implementation of the Directive can positively contribute to the integration of sustainability factors into companies.

For more information and registration, visit the Accountancy Europe's website.

SEC updates EDGAR filer manual for 2017 IFRS taxonomy

Oct 02, 2017

On October 2, 2017, the Securities and Exchange Commission (SEC) implemented Release 17.3.1 of its Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system filer manual to support the 2017 IFRS taxonomy.

The 2017 IFRS taxonomy is identical to the one issued by the IFRS Foundation on March 9, 2017 and is consistent with IFRSs issued by the IASB as of January 1, 2017.

Review the press release on the SEC’s Web site.

Standard-setters split on whether to prohibit non-IFRS information in financial statements

Oct 19, 2017

In March 2017, the International Accounting Standards Board (IASB) published its discussion paper DP/2017/1 "Disclosure Initiative — Principles of Disclosure". Comments were requested by October 2, 2017 and 100 comment letters are now available on the IASB's website. An analysis shows that standard-setters are split on the question whether a general disclosure standard should prohibit an entity from including "non-IFRS information" or information that is inconsistent with IFRSs in its financial statements.

Some standard-setters are strictly against including any non-IFRS information in financial statements. Canada's AcSB argues that non-IFRS information "could undermine other information in the financial statements that conforms with IFRS Standards" and could "further reduce the relevance of financial statements". Mexico's CINIF ("we do not believe there are situations where 'non-IFRS information' is warranted").

Some standard-setters argue in favour of allowing information that is not IFRS information in financial statements. The UK FRC notes that it "does not support a principle which prohibits information".

Many standard-setters draw a line between non-IFRS information and information that is not consistent with IFRSs (with some of them again pointing out that it would be difficult to distinguish between the two types of information).

Other standard-setters again simply acknowledge that prohibiting non-IFRS information is impractical.

The middle ground is held by standard-setters who see pros and cons and weigh them carefully but who also stress two points: (i) in some jurisdictions there are legal requirements to include certain non-IFRS information in financial statements and (ii) IAS 1 already requires "to provide additional disclosures when compliance with the specific requirements in IFRSs is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity’s financial position and financial performance".

All comment letters cited or referred to are available on the IASB's website. The questions regarding non-IFRS information and information that is inconsistent with or contradicts IFRS information are questions 6 and 7.

Review the full article on our Global IAS Plus website.

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