Part I - IFRS

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IASB issues work plan update

May 29, 2015

On May 29, 2015, following its May meeting, the International Accounting Standards Board updated its work plan. The revised plan adds a new project on “Changes in accounting policies and estimates”, moves the Exposure Draft on “Clarifications to IFRS 15” and the Draft Interpretation on “Uncertainties in income taxes” back by one quarter, and introduces a new format for reporting on the progress in research projects.

The revised IASB work plan is available on the IASB's Web site.
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IASB proposes revisions to the Conceptual Framework

May 28, 2015

On May 28, 2015, the International Accounting Standards Board (IASB) published a comprehensive Exposure Draft (ED) containing proposals for topical areas where it considers a revision and amendment of the existing Conceptual Framework necessary. Included in the ED are proposals to revise the definitions of an asset and a liability, to introduce guidance on measurement and derecognition, and to set a framework for presentation and disclosure. The main ED is accompanied by an ED containing proposals regarding references to the Conceptual Framework in other IASB pronouncements. Comments on both EDs are due October 26, 2015.

ED/2015/3 Conceptual Framework for Financial Reporting explains that the Conceptual Framework's primary purpose is to assist the IASB in developing and revising IFRSs (even though it may be useful to parties other than the IASB) and that the framework does not override any specific IFRS. Should the IASB decide to issue a new or revised pronouncement that is in conflict with the framework, the IASB will highlight the fact and explain the reasons for the departure going forward.

ED/2015/4 Updating References to the Conceptual Framework contains proposed amendments to IFRS 2, IFRS 3, IFRS 4, IFRS 6, IAS 1, IAS 8, IAS 34, SIC-27 and SIC-32 in order to update those pronouncements with regard to references to and quotes from the framework so that they refer to the revised Conceptual Framework. As the Conceptual Framework will mainly affect the IASB and its work while the proposals regarding the other pronouncements could also affect preparers, the IASB considers granting a transition period of approximately 18 months for the amendments proposed in ED/2015/4 in order to give preparers time to identify, understand and adjust to possible implications.

The IASB allows constituents an extended six months period to work their way through the document and to respond to the questions raised; hence, comment letters are to be submitted by October 26, 2015. The IASB will consider the comments received when developing the final version of the revised Conceptual Framework. The IASB aims to finalize the revised Conceptual Framework in 2016.

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IFRS - ASBJ Image

ASBJ publishes research paper on the amortization of goodwill

May 19, 2015

On May 19, 2015, the Accounting Standards Board of Japan (ASBJ) published the Research Paper No.1 “Research on Amortization of Goodwill” with a view to make a contribution to the global discussion regarding how goodwill should be accounted for.

IFRS - IASB Image

New appointments to the IFRS Interpretations Committee

May 12, 2015

On May 12, 2015, the IFRS Foundation, the oversight body of the International Accounting Standards Board (IASB), announced two appointments to the IFRS Interpretations Committee.

Jongsoo Han, a board member of the Korea Accounting Standards Board (KASB) and Vice-President of the Korea Accounting Association, and Robert Uhl, a US-based Partner and National Director of Accounting Standards and Communications at Deloitte & Touche LLP, have both been appointed for a three-year term, commencing July 1, 2015. Mr. Uhl had already been appointed to the Committee in an interim capacity until June 30, 2015 in December 2014 following the departure of Laurence Rivat. In addition to the new appointments, John O’Grady and Sandra Peters have been reappointed to serve a second three-year term on the Committee, also commencing in July 2015.

Please click for the IFRS Foundation announcement (link to IASB website).

IFRS - IASB Image

IASB issues work plan update

Mar 26, 2015

On March 26, 2015, following its March meeting, the International Accounting Standards Board (IASB) has published a new work plan. We summarize the changes for you, which also included changes the IASB made to the February 24 work plan after it was published. Most notable changes are delays in the Conceptual Framework project and in the Principles of disclosure project as well as a new project on Clarifications to IFRS 15.

Minor updates regarding the implementation projects (deliberations continuing or moved slightly) affect:
  • IAS 1 — Classification of liabilities, IFRS 13 — Unit of account, and
  • IAS 12 — Recognition of deferred tax assets for unrealized losses.
In addition, a new project Clarifications to IFRS 15: Issues emerging from TRG discussions has been added to the IASB's work plan.

As regards research projects, board discussions on Disclosure initiative — Disclosure review will extend into the second quarter of 2015 now. Also, new projects have tentatively been introduced on the definition of a business and goodwill.

The revised IASB work plan (dated March 24, 2015) is available on the IASB's website.

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IASB proposes amendments to IAS 1 to clarify the classification of liabilities

Feb 10, 2015

On February 10, 2015, the International Accounting Standards Board has published an Exposure Draft of proposed amendments to IAS 1, Presentation of Financial Statements. The amendments aim at a more general approach to the classification of liabilities under IAS 1 based on the contractual arrangements in place at the reporting date. Comments are requested by June 10, 2015.

Background

The issue was originally adressed as part of the annual improvements project 2010 -2012 cycle. Exposure Draft ED/2012/1 Annual Improvements to IFRSs (2010—2012 Cycle), published in May 2012, proposed amendments to IAS 1.73 to clarify that a liability is classified as non-current if an entity expects, and has the discretion, to refinance or roll over an obligation for at least twelve months after the reporting period under an existing loan facility with the same lender, on the same or similar terms. During 2013, however, the IASB decided not to finalise the amendment, but instead pursue a narrow-scope project to refine the existing guidance in IAS 1 on when liabilities should be classified as current.

Suggested changes

The amendments proposed in ED/2015/1 Classification of Liabilities (Proposed amendments to IAS 1) aim at:

  • clarifying that the classification of liabilities as current or non-current should be based on rights that are in existence at the end of the reporting period by amending IAS 1.69(d) and IAS 1.73 so that both paragraphs refer to the "right" to defer settlement and both make explicit that only rights in place "at the end of the reporting period" should affect the classification of a liability;
  • making the link clear between the settlement of a liability and the outflow of resources from an entity by adding to IAS 1.69 that settlement refers to the "transfer to the counterparty of cash, equity instruments, other assets or services"; and
  • reorganizing the guidance in IAS 1 with respect to classification of liabilities as current or non-current by deleting IAS 1.74–76 and moving their content to the expanded and renumbered paragraphs IAS 1.72R and IAS 1.73R so that similar examples are grouped together.

Effective date and transition requirements

The ED does not contain a proposed effective date. However, the ED proposes that the amendments would be applied retrospectively and that early application should be permitted.

Additional information

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IFRS - ASBJ Image
IFRS - EFRAG Image

Feedback statement on the Discussion Paper on the accounting treatment for goodwill

Feb 04, 2015

On February 4, 2015, a research group of the Accounting Standards Board of Japan, the European Financial Reporting Advisory Group and the Italian standard setter Organismo Italiano di Contabilità released a feedback statement summarizing the comments received on a Discussion Paper (DP) published in July 2014. That DP “Should Goodwill still not be Amortized? - Accounting and Disclosure for Goodwill” was arguing that the reintroduction of amortization of goodwill would be appropriate.

In response to the paper, the research group received twenty nine comment letters.

The majority of respondents supported reintroducing the amortisation of goodwill. Nonetheless, these respondents provided mixed views on whether the IASB should indicate a maximum amortisation period. Some respondents also acknowledged the subjectivity and high level of judgement in determining the useful life of goodwill, but they believed the level of subjectivity and judgement to be not higher than that in the impairment test. In general, respondents who supported the amortisation of goodwill believed that the IASB should develop guidance to help preparers to determine the useful life of the acquired goodwill.

A minority of respondents, mostly users, were supportive of the current impairment-only approach. These respondents explained that the amortisation model was fairly meaningless and it would not be beneficial to users of financial statements.

The full feedback statement is available on the EFRAG website.

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