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Part I - IFRS

With the Coronavirus underway, here are six steps for business leaders to consider

Feb 06, 2020

On February 6, 2020, the Conference Board released an article how as the World Health Organization declared the Coronavirus outbreak a global health crisis, and cases are arising around the world beyond the borders of China, companies are considering how to respond.

A company’s first priority should be for the health and safety of its employees, customers, suppliers, and communities. As companies are grappling with the multifaceted implications of this epidemic, corporate citizenship professionals specifically are at work looking at how to deploy company resources to help with the situation externally.

Review the full article on the Conference Board's website.

Additional change to IASB work plan

Feb 04, 2020

On February 4, 2020, the International Accounting Standards Board (the Board) made an additional change to its work plan by moving the expected issuance of the discussion paper on its goodwill and impairment project to March.

Review this news item for a list of other changes made to the work plan since it was last revised.

EC launches initiative to update the NFRD

Feb 04, 2020

In 2020, the European Commission (EC) launched an initiative "Revision of the Non-Financial Reporting Directive".

As reported earlier, Executive Vice President Valdis Dombrovskis of the EC announced in January 2020 that later this year he would present a renewed sustainable finance strategy, which would include a revision of the Non-Financial Reporting Directive (NFRD).

As a first step of the corresponding initiative that has just been launched, an "Inception impact assessment" has been published. The background paper for the impact assessment notes the following current problems with the NFRD:

  • Reported non-financial information is not sufficiently comparable or reliable.
  • The reported non-financial information does not meet users' needs.
  • Companies incur unnecessary and avoidable costs related to reporting non-financial information.
  • Companies face uncertainty and complexity when deciding what non-financial information to report, and how and where to report such information.

The background papers names three options that could be followed to address these problems:

  1. Continue the current approach of non-binding guidelines to assist companies when reporting according to the NFRD.
  2. Explore the use of standards (which would remain voluntary for companies to use if they wish to).
  3. Revise and strengthen the provisions of the NFRD.

Given Mr Dombrovskis earlier remarks and the title of the initiative, it seems that the EC has already formed an opinion on the best way forward. However, stakeholders have the possibility to comment on the impact assessment (until February 27, 2020), and a formal full consultation is announced for the first quarter of 2020.

Review the consultation page on the EC website that offers access to the Inception impact assessment background paper, the feedback possibility and a general outline on the planned timing for the revision.

Viral contagion? Implications of China’s Coronavirus outbreak for global business

Feb 04, 2020

On February 4, 2020, the Conference Board released a podcast on how the World Health Organization has declared the novel coronavirus outbreak an international public health emergency, acknowledging that the virus now represents a risk beyond China. Key questions need to be answered today in global business scenario - How can organizations prepare for and manage the potential impact of this fast-moving, deadly outbreak? What are the short and long-term economic implications? How can companies respond to a major health outbreak from various functional perspectives?

Listen to the podcast on the Conference Board's website.

IASB releases podcast on IFRS 17

Feb 03, 2020

On February 3, 2020, the International Accounting Standards Board (IASB) released a podcast featuring IASB member Darrel Scott and technical staff member Roberta Ravelli as they discuss the developments at the January 2020 Board meeting related to the amendments to IFRS 17, "Insurance Contracts".

The podcast discusses the amend­ments ten­ta­tively finalized during the meeting and focuses on credit card contracts, risk mitigation option, contracts acquired in a settlement period, and acquisition cash flows.

View the podcast on the IASB's website.

FASB Staff issues Q&As on revenue recognition

Jan 31, 2020

In January 2020, the Financial Accounting Standards Board (FASB) staff issued a Q&A document, Revenue Recognition Implementation Q&As.

The Q&As are compiled from previously issued educational materials and address the following topics:

  • Scope
  • Step 1 — Identifying the contract
  • Step 2 — Identifying the performance obligation
  • Step 3 — Determining the transaction price
  • Step 4 — Allocating the price to the performance obligation
  • Step 5 — Recognizing revenue
  • Licensing
  • Presentation
  • Contract costs

Review the Q&A document on the FASB's website.

Updated IASB work plan — Analysis (January 2020)

Jan 31, 2020

On January 31, 2020, the International Accounting Standards Board (the Board) updated its work plan following its January 2020 meeting.

Below is an analysis of all changes made to the work plan since our last analysis on December 14, 2019.

Standard-setting projects

  • Primary Financial Statements — After publishing an exposure draft in December 2019, the next milestone for this project is now exposure draft feedback. Comments are due by 30 June 2020.
  • Rate-regulated Activities —  An exposure draft is now expected in H2 2020 (formerly H1 2020).
  • Subsidiaries that are SMEs — After reviewing research at the January 2020 Board meeting, the Board decided to elevate this project to a standard-setting project. The next milestone is now  a decision on whether to proceed with a discussion paper or exposure draft. No date is listed.

Maintenance projects

Research projects

Other projects

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

SEC Proposes Amendments to Modernize MD&A and Certain Other Financial Disclosure Requirements and Issues Guidance on KPIs and Metrics

Jan 30, 2020

On January 30, 2020, the Securities and Exchange Commission (SEC) issued a proposed rule and guidance as part of its efforts to “modernize, simplify, and enhance certain financial disclosure requirements in Regulation S-K.”

The proposed rule’s amendments would reduce “duplicative disclosure and [focus] on material information in order to improve these disclosures for investors and simplify compliance efforts for registrants.”

The guidance addresses “key performance indicators and metrics in Management’s Discussion and Analysis of Financial Condition and Results of Operations (‘MD&A’).”

Comments on the proposed amendments are due 60 days after the date of their publication in the Federal Register. The guidance will become effective on the date of its publication in the Federal Register.

Review the press release on the SEC’s website.

Executive Vice President of the European Commission calls for European non-financial reporting standards

Jan 28, 2020

On January 28, 2020, at a conference on implementing the European Green Deal, Executive Vice President Valdis Dombrovskis announced that the European Commission will support a process to develop European non-financial reporting standards.

Mr Dombrovskis said that later this year he would present a renewed sustainable finance strategy, which would include a revision of the Non-Financial Reporting Directive. This would require companies to increase disclosure on their sustainable activities and give adequate reliable information on sustainability risks and opportunities. However, he said, not every detail can - or should - be fixed in law. There was also a need for clear reporting standards for companies to apply. Mr Dombrovskis went on to say:

So today, I can tell you that the European Commission will support a process to develop European non-financial reporting standards. I will soon invite the European Financial Reporting Advisory Group [EFRAG] to begin preparatory work for these standards as quickly as possible. The many overlapping international reporting standards and set-ups confuse companies and investors. They also find it expensive. The EU is well placed to address this situation – and show leadership in building consensus for a set of standards that can be widely accepted.

Mr Dombrovskis conceded that the European Commission cannot do this alone. Therefore, he stated, the best and most widely accepted elements of what exists today will be the starting point and expert assistance from those organisations and individuals who can best contribute to the process will be used. 

Review the Mr. Dombrovskis' speech on the European Commission's website.

IASB publishes "Request for Information: Comprehensive Review of the IFRS for SMEs Standard"

Jan 28, 2020

On January 28, 2020, the International Accounting Standards Board (IASB), in cooperation with the SME Implementation Group (SMEIG), has developed and issued a request for information seeking comments on strategic and general questions, specific sections of the IFRS for SMEs, as well as new topics and other matters related to the IFRS for SMEs. Responses are due by July 27, 2020.

IFRS for SMEs was first issued in July 2009. A first comprehensive review of the standard took place between 2012 and 2014. The IASB has now launched a second review with the objective of seeking views on whether and how to align the IFRS for SMEs with full IFRSs.

The Request for Information is divided into three parts:

  • Part A contains strategic and general questions.
  • Part B contains questions on specific sections of the IFRS for SMEs and their alignment with the full IFRSs; and
  • Part C contains questions on new topics and other matters related to the IFRS for SMEs.

A summary of the questions asked in each Part is set out in the table at the bottom of the article.

The SMEIG is expected to review comments on the request for information and make recommendations to the IASB on possible amendments.

Click for:

 

Summary of questions asked in the request for information

Part A - Strategic and general questions

  • Alignment approach
    • Should the IFRS for SMEs be aligned with full IFRSs?
    • What extent of alignment of the IFRS for SMEs with full IFRSs is most useful, and why?
  • Alignment principles
    • Do the Board's proposed principles provide a framework to assist in determining whether and how the IFRS for SMEs should be aligned with full IFRSs?
  • When to consider alignment
    • Of the three possible dates for when to consider alignment, which is preferable?

Part B - Specific issues

  • Should Section 2 of the IFRS for SMEs be aligned with the 2018 Conceptual Framework and how?
  • Should Section 9 of the IFRS for SMEs be aligned with IFRS 10 and how?
  • Should Section 11 of the IFRS for SMEs be aligned with IFRS 9 and how?
  • Should Section 15 of the IFRS for SMEs be aligned with IFRS 11 and how?
  • Should Section 19 of the IFRS for SMEs be aligned with IFRS 3 and how?
  • Should Section 20 of the IFRS for SMEs be aligned with IFRS 16 and how?
  • Should Section 23 of the IFRS for SMEs be aligned with IFRS 15 and how?
  • Should Section 28 of the IFRS for SMEs be aligned with IAS 19 and how?
  • Should the IFRS for SMEs be aligned with IFRS 13 and how?
  • Should multiple sections of the IFRS for SMEs for amendments to IFRSs and IFRIC Interpretations and how?

Part C - New topics and other matters

  • Should the IFRS for SMEs be aligned with IFRS 14 or not?
  • Should holdings of cryptocurrency be addressed in the IFRS for SMEs?
  • Are there difficulties in applying the simplifications allowed by paragraph 28.19 of the IFRS for SMEs?
  • Are there any topics the IFRS for SMEs does not address that should be the subject of specific requirements?
  • Are there additional issues that should be brought to the Board’s attention relating to the IFRS for SMEs?

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.