Mr Hoogervorst said:

Valuable information gets drowned out by ‘tick the box’ disclosures and voluminous, but poorly organized and presented, financial data. For the investor, it is often difficult to see the woods through the multitude of information trees. We will take a fresh look at how financial information is presented, how it is grouped together, and in what form it is made available.

"Better Communication" will bring together a number of work streams, including:

• Primary Financial Statements—improving the organisation and structure of the ‘face of financial statements’ (statements of financial position, financial performance and cash flows);
• Disclosure Initiative—improving the quality and usefulness of financial disclosures through amendments;
• Financial Instruments with the Characteristics of Equity (FICE)—clarifying the definition, presentation and disclosure requirements for such instruments;
• Digital reporting—further developing the IFRS Taxonomy to ensure it meets electronic reporting needs and remains fit for purpose; and
• Non-financial reporting—assessing strategic challenges and exploring any potential future role that the Board may play in this area.

"Better Communication" as a theme for the Board's work responds to much of the feedback received through the 2015 Agenda Consultation, and should deliver material improvements to users’ ability to make economic decisions from financial information.

Mr Hoogervorst also announced that the Board will be playing a more active role in supporting jurisdictions in the implementation of new and existing IFRS Standards.

Read the full speech on the IASB's Web site.

In the webcast, the IASB staff discuss:

• measurement of lease liabilities
  • lease term
  • variable lease payments
  • in-substance fixed lease payments
  • discount rate
• measurement of right-of-use assets

The new webcast and all previous webcasts of the series are available on the IFRS 16 implementation page on the IASB’s website.

The proposed amendments provide:

• clearer application guidance to help distinguish between a business and a group of assets when applying IFRS 3; and
• clarification on how a company should account for previously held interest in a business, if acquiring control, or joint control, of that business.

The proposed amended application guidance on the definition of a business in IFRS 3 arises from the Board’s Post-implementation Review (PIR) process, which is conducted on each Standard and major amendment approximately two years after their effective dates. The IFRS 3 PIR shows general support for the accounting requirements in the Standard but identifies some areas where further research will be undertaken.

The proposed amendment to accounting for previously held interests was developed through the IFRS Interpretations Committee.

Further information about the Exposure Draft—Definition of a Business and Accounting for Previously Held Interests (Proposed Amendments to IFRS 3 and IFRS 11)—can be accessed on the IASB's Web site. The deadline for comments is October 31, 2016.

Additional information

Please click for:

• IASB press release (link to IASB website)
• Access to the exposure draft on the IASB website
• Our project page on IFRS 3 — Definition of a business
• Our project page on IFRS 3/IFRS 11 — Remeasurement of previously held interests

This issue of Investor Perspective features:

• An examination of capitalization tables;
• A closer look at the IASB's projects on Conceptual Framework and financial instruments with characteristics of equity;
• A solicitation for ideas on "more efficient and effective way for investors and lenders to obtain a comprehensive picture of the rights and obligations created by a company’s liability and equity claims"; and
• Recent resources related to disclosure effectiveness.

For more information, see the June 2016 edition of the Investor Perspectives newsletter on the IASB’s website.

Changes to the work plan include:

Major projects

• No changes made to major projects.

Im­ple­men­ta­tion projects

• Annual Improvements (2015-2017): A decision on the direction of the project is now expected within 3 months.
• Remeasurement at a Plan Amendment, Curtailment or Settlement / Availability of a Refund of a Surplus from a Defined Benefit Plan: A decision on the direction of the project is now expected within 3 months.
• Draft IFRIC Interpretation — Uncertainty over Income Tax Treatment: A decision on the direction of the project is now expected within 3 months.
• Draft IFRIC In­ter­pre­ta­tion — Foreign Currency Trans­ac­tions and Advance Con­sid­er­a­tion: A final interpretation is now expected within 6 months.

In addition, the work plan indicates that the exposure drafts on the definition of a business and on the remeasurement of previously held interests are expected to be released next week.

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

The debate over which accounting standards philosophy is better—principles or rules—has persisted for decades with no end in sight. It’s a healthy debate. Principles written at too high a level result in issues with comparability and other challenges but excessive rules result in unnecessary complexity and invite structuring.

Having spent 40 years in this space as a US auditor and preparer and for several years as an IASB member, I have the benefit of seeing this issue from several perspectives, and I have no doubt that a principle-based approach to establishing accounting standards is, without question, the better way to go.

However a principle-based approach is only successful when several pre-conditions are present—some technical, some mindset—which is the focus of this article.

Read the editorial on the IASB's Web site.

The amendments, which were developed through the IFRS Interpretations Committee, provide requirements on the accounting for:

• the effects of vesting and non-vesting conditions on the measurement of cash-settled share-based payments;
• share-based payment transactions with a net settlement feature for withholding tax obligations; and
• a modification to the terms and conditions of a share-based payment that changes the classification of the transaction from cash-settled to equity-settled.

Companies are required to apply the amendments for annual periods beginning on or after January 1, 2018. Earlier application is permitted.

Further information about the amendments—Classification and Measurement of Share-based Payment Transactions (Amendments to IFRS 2)—can be on the IASB's Web site.

The proposal revises the property disclosure requirements for mining registrants and related guidance “by aligning them with current industry and global regulatory practices and standards.” The purpose of the revisions is to help investors understand registrants’ mining properties so that they can “make more informed investment decisions.”

Foreign private issuers that use Form 20-F to file their Exchange Act registration statements and annual reports, or that refer to Form 20-F when filing their Securities Act registration statements on Forms F-1 and F-4, are generally not subject to Regulation S-K.

Because the SEC believes that the same property disclosure requirements should apply to both domestic and foreign mining registrants, the proposed rules would amend Form 20-F.

The proposed conforming changes are intended to ensure consistency in the mining disclosures of SEC filers across both domestic registrants and foreign private issuers (other than Canadian issuers that use the Multijurisdictional Disclosure System filing on Forms 40-F, F-10, F-7, F-8 or F-80). The proposed changes would particularly affect Canadian registrants that report pursuant to Form 20-F and are currently permitted to provide additional mining disclosure under NI 43-101 pursuant to the “foreign or state law” exception under Guide 7 and the “foreign law” exception under Form 20-F. The proposed rules would eliminate this exception and may thus increase compliance costs for these registrants to the extent that, as discussed previously, the proposed disclosure requirements differ from NI 43-101.482 That said, to the extent that these differences in disclosure requirements also provide expected incremental benefits, these benefits would mitigate any increase in compliance costs.

Comments on the proposed rule are due 60 days after the date of its publication in the Federal Register.

Review the press release and proposed rule on the SEC’s Web site.

The study begins by pointing out that the current system presumes that information is consumed by humans, therefore machine-readable formats are often neglected or viewed as secondary. However, the study concludes that the use of data and technology can result in a more effective and efficient overall financial reporting process in which users at every level receive more transparent, better-quality information on a timely basis. The three levels the study identifies are companies, auditors and investors.

• Companies. Using standardized data from very early on in the process (and not only at the regulatory filing stage) would enable companies to use applications that are able to pull information from different data sources to write automated reports, which will streamline current labor-intensive processes.
• Auditors. Structuring data early in the process would also allow auditors to use audit data analytics to make the audit more efficient and potentially provide users with a better quality and greater granularity of financial information with greater reporting frequency and possibly a higher level of assurance.
• Investors. Structured quantitative data not bounded by the document in which the information is contained would give investors the possibility to apply current technology to sift through data and analyse the numbers in a faster and more comprehensive manner.

However, the study also notes that to achieve these changes, regulators need to improve access to and searchability of information within the regulator’s primary source documents.

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

The webinar is hosted by the IASB’s senior technical manager Suzanne Morsfield and assistant technical manager Arjuna Dangalla.

For more in­for­ma­tion, see the webinar page on the IASB’s website.