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October 2016

AcSB and IASB panel discussion on IFRS 15

Oct 14, 2016

On October 14, 2016, the Accounting Standards Board (AcSB) hosted a panel discussion on the implemention of IFRS 15 "Revenue from Contracts with Customers". A video recording of that panel discussion and the presentation are now available.

The panel was chaired by IASB member Gary Kabureck. Panelists included Karen Higgins (Vice-Chair of the AcSB and Partner at Deloitte), Karyn Brooks (Retired Senior Vice President and Controller at Bell Canada and member of the Transition Resource Group for Revenue Recognition), Cameron McInnis (Chief Accountant at the Ontario Securities Commission), and Allison McManus (Partner at KPMG and former IASB staff). After a short overview of the situation in Canada, panelists discussed in depth the IFRS 15 implementation issues and project management, including external communications.

Review the video recording and the slides from the AcSB's website.

ASBJ publishes a quantitative study on goodwill and impairment

Oct 03, 2016

On October 3, 2016, the Accounting Standards Board of Japan (ASBJ) published the Research Paper, "Quantitative Study on Goodwill and Impairment" with a view to contribute to the global discussion regarding the accounting for goodwill and goodwill impairment following the post-implementation review of IFRS 3. The ASBJ research report is a companion piece to the EFRAG report published on September 29, but is not identical.

The main findings presented in the ASBJ report are:

  • For all stock market indices analysed (Japan, United States, Australia, Europe), the total amount of goodwill and the amount of goodwill per company increased from 2005 to 2014.
  • The stock market indices of the United States and Europe recognized larger amounts, both in the total amount of goodwill and the amount of goodwill per company, compared to the stock market indices of Japan and Australia.
  • The stock market indices of the United States and Europe have consistently shown higher ratios of goodwill to net assets and of goodwill to market capitalization.
  • In 2014, 32% of the companies recognizing goodwill in the United States and 25% of the companies recognizing goodwill in Europe had goodwill that exceeded 50% of their net assets. Furthermore, 14% of those companies in the Unites States and 11% of those companies in Europe had goodwill that exceeded 100% of their net assets. A few companies in the United States, Europe and Australia had goodwill that exceeded 100% of their market capitalization.
  • In the United States and Europe, the market capitalization exceeded by a large portion the carrying amount of equity in the statement of financial position.
  • Explicit time lags were not observed by analyzing the correlation between impairment and the price or points of the stock market index.
  • Fully expensing goodwill judged by the data collected takes on average 82 years in the United States, 37 years in Europe, 9 years in Japan, and 34 years in Australia.

Please click to access the study and a corresponding press release on the ASBJ's website. The EFRAG's research report can be accessed here.

FRC discussion paper on improving the statement of cash flows

Oct 20, 2016

On October 20, 2016, the UK Financial Reporting Council (FRC) issued a discussion paper on improving the statement of cash flows with the aim of identifying possible evolutionary improvements to the requirements of IAS 7 'Statement of Cash Flows'.

Noting that IAS 7 is more than twenty years old and that it would be "surprising if improvements cannot be identified from the perspective of 2016", the paper presents some ideas to improve the usefulness of the statement of cash flows. The paper is divided into five sections:

  • The usefulness of information about cash flows
  • The classification of cash flows
  • Cash equivalents and the management of liquid resources
  • Reconciliation of operating activities
  • Direct or indirect method?

The discussion paper includes 11 specific questions relating to these sections but also invites any other comments on issues relating to possible improvements to the statement of cash flows.

The discussion paper and associated press release are available from the FRC website.

IASB updates work plan

Oct 21, 2016

On October 21, 2016, the IASB released its updated its work plan.

Changes to the work plan include:

Major projects

  • No significant changes

Implementation projects

Research projects

  • Disclosure initiative — Principles of disclosure: A discussion paper is now expected in February 2017. During this week's meeting, the Staff revised the expected publication date of the discussion paper from mid-December 2016 to February 2017 in order to provide the Board with more time to focus on matters relating to the draft insurance standard.

Post-implementation reviews

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

Papers for the IASB research forum and registration for webcast

Oct 05, 2016

On October 5, 2016, the Canadian Academic Accounting Association released research papers that will be discussed at the 2016 Contemporary Accounting Research (CAR) conference in Waterloo, Ontario on October 15 and 16, 2016.

The following papers will be presented and discussed. The first three papers also feature IASB discussants:

  • Moving the Conceptual Framework Forward: Accounting for Uncertainty
  • Assets and Liabilities: When do they Exist?
  • Relative Effects of IFRS Adoption and IFRS Convergence on Financial Statement Comparability
  • How Does Intrinsic Motivation Improve Auditor Judgment in Complex Audit Tasks?
  • Relating Product Prices to Long-Run Marginal Cost: Evidence from Solar Photovoltaic Modules
  • How Quickly Do Firms Adjust to Optimal Levels of Tax Avoidance?
  • One Team or Two? Investigating Relationship Quality between Auditors and IT Specialists: Implications for Audit Team Identity and the Audit Process

All papers can be downloaded from the website of the Canadian Academic Accounting Association (CAAA). Also available is a webcast sponsored by the Canadian Accounting Standards Board (AcSB). Viewers around the world can access the research and discussions presented at the event. More information is here.

Trustees appoint IASB Vice-Chair

Oct 18, 2016

On October 18, 2016, after their meeting in New Delhi, the Trustees of the IFRS Foundation, announced the appointment of Sue Lloyd as vice-chair of the International Accounting Standards Board. Ms. Lloyd succeeds to Ian Mackintosh who served as vice-chair from 2011 to 2016. Her term is effective November 1, 2016 and expires on December 31, 2018 when she will be eligible for a second term.

Ms. Lloyd has been an IASB Board member since 2014. Previously, she served as the Director of Capital Markets and Senior Director of Technical Activities at the IASB. In addition, Ms. Lloyd is a former member of the Australian Accounting Standards Board.

For more information, see the press release on the IASB’s website.

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