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Part I - IFRS

EFRAG TEG appointments and reappointments

Jan 07, 2020

On January 7, 2020, the Board of the European Financial Reporting Advisory Group (EFRAG) announced the appointment of four new members of — and six reappointments to — its Technical Experts Group (TEG).

The new EFRAG TEG members are Jens Berger (Leader of Deloitte Germany's IFRS Centre of Excellence), Erlend Kvaal (academic, Norway), David Procházka (at large, Czech Republic) and Christoph Schauerte (industry, Germany). The appointments of Mr. Berger, Mr. Kvall and Mr. Schauerte are effective January 1, 2020, while Mr. Procházka will begin his term on April 1, 2020.

EFRAG TEG Vice-Chair Nicklas Grip has been reappointed, along with Ana Rosa Cortez, Geert Ewalts, Emmanuelle Guyomard, Ambrogio Virgilio and Jed Wrigley. Their reappointments are effective from April 1, 2020.

Review the press release on the EFRAG's website.

 

IASB publishes overview of consultation documents to be expected in 2020

Jan 07, 2020

On January 7, 2020, the International Accounting Standards Board (the Board) released a list of consultation documents that it plans to publish in 2020, including a discussion paper on goodwill and impairment, an exposure draft in its management commentary (wider corporate reporting) project, and a request for information regarding the 2020 Agenda consultation.

The full list of consultations to be expected and the currently expected timing is given below:

Project Type of consultation document When to be expected?
Goodwill and impairment Discussion paper Q1 2020
Comprehensive review of the IFRS for SMEs Request for information Q1 2020
Business combinations under common control Discussion paper Q2 2020
IBOR reform and its effects on financial reporting — Phase 2 Exposure draft Q2 2020
Rate-regulated activities Exposure draft Q2 2020
Post-implementation review of IFRS 10, IFRS 11, and IFRS 12 Request for information Q2 2020
Disclosure initiative — Targeted standards-level review of disclosures Exposure draft H2 2020
Management commentary (wider corporate reporting) Exposure draft H2 2020
2020 Agenda consultation Request for information H2 2020

Review the press release on the Board's website.

Year in review — 2019

Jan 03, 2020

2019 was another successful year for the Centre for Financial Reporting. We've devoted significant resources to bring you comprehensive coverage of all things IFRS and broader financial reporting and other relevant topics and are pleased that our readers appreciate our efforts.

Overall, our most popular pages remain our accounting standards summaries and project summaries, and we continued to witness strong demand for our news and publications.

Our 10 most popular stories of 2019
    1. IASB publishes proposed amendments to IFRS 17 (June)
    2. IASB publishes proposed amendments to IAS 12 (July)
    3. IASB finalizes phase 1 of its IBOR reform project (September)
    4. IASB proposes amendments to IAS 1 and the Materiality Practice Statement (August)
    5. IASB publishes proposals for amendments under its annual improvements project (cycle 2018-2020) (May)
    6. IASB discusses redeliberation plan for proposed IFRS 17 amendments (November)
    7. AcSB releases the Basis for Conclusions for revenue, agriculture, investments and income tax standards (May, November and December)
    8. PSAB releases Exposure Drafts on purchased intangibles and public private partnerships (November)
    9. AASB releases the Basis for Conclusions revising the requirements to communicate key audit matters in accordance with CAS 700 (December)
    10. Canadian Securities Regulators issue guidance on climate change-related disclosure (August)

 

We wish you a happy and safe New Year. We look forward to bringing you the latest financial reporting news in 2020.

Statement on role of audit committees in financial reporting and key reminders regarding oversight responsibilities

Dec 30, 2019

On December 30, 2019, the Securities and Exchange Commission (SEC) released a public statement providing observations and reminders on a number of potential areas of focus for audit committees.

It is their intention that these observations and reminders will assist audit committees carrying out their year-end work, including promoting efficient and constructive dialogue among audit committees, management and independent auditors in these and other areas.

Review the public statement on the SEC's website.

SEC proposes to codify certain consultations and modernize auditor independence rules

Dec 30, 2019

On December 30, 2019, the Securities and Exchange Commission (SEC) announced that it is proposing amendments to codify certain staff consultations and modernize certain aspects of its auditor independence framework.

The proposed amendments would update select aspects of the nearly two-decade-old auditor independence rule set to more effectively structure the independence rules and analysis so that relationships and services that would not pose threats to an auditor’s objectivity and impartiality do not trigger non-substantive rule breaches or potentially time consuming audit committee review of non-substantive matters.

Review the press release and proposed amendments on the SEC's website.

Accountancy Europe releases paper on interconnected standard-setting for corporate reporting

Dec 24, 2019

In December 2019, Accountancy Europe published a paper describing and calling for a global solution to interconnected standard-setting that can meet the need for reliable, consistent information in non-financial reporting that is interconnected with financial reporting.

The introduction to the paper notes:

Global risks and opportunities mean that financial information alone cannot give a full picture of a company’s performance. Climate change, environmental degradation, social unrest and internally generated intangibles are addressed by non-financial information (NFI) reporting. However, the hundreds of NFI reporting initiatives available are leading to confusion and the potential for greenwashing. For an effective response to these global issues and stakeholder demands, NFI reporting needs to be harmonized and interconnected with financial reporting.

Therefore, the paper introduces nine criteria to assess approaches to interconnected standard-setting for corporate reporting. The criteria are:

  • urgency,
  • global or local solution,
  • oversight,
  • due process of standard-setting,
  • responding to stakeholder interests,
  • framework and metrics,
  • materiality lens,
  • legal embedding, and
  • role of technology.

These criteria are then applied to four approaches, being (1) an international non-financial reporting standards board within the IFRS structures, (2) regional consolidation, (3) separate governance structure for financial and NFI reporting; and (4) global corporate reporting structure.

Accountancy Europe concludes that the fourth approach offers the best solution with an enhanced monitoring body, a corporate reporting foundation that builds on the current IFRS Foundation Trustees and would be responsible for financial reporting and non-financial reporting oversight and two standard-setting boards (the IASB and a new international non-financial reporting standards board) that would be connected by a common framework for connected reporting.

Comments on the paper are invited by March 31, 2020.

Review the paper on the Accountancy Europe's website.

IVSC continues article series on goodwill amortization

Dec 24, 2019

In 2019, the International Valuation Standards Council (IVSC) published the second article in a series looking into whether principles underlying business valuations are compatible with the concept of goodwill amortization. The series aims at encouraging public discussion by exploring certain fundamental questions in this area to inform financial statement preparers, reviewers, and users, and aid the capital market.

The second article What is the information value of the current impairment framework? can be accessed on the IVSC website.

The first article Is Goodwill a Wasting Asset? was published in September 2019.

FASB Releases 2020 Taxonomies for U.S. GAAP and SEC Financial Reporting

Dec 20, 2019

On December 20, 2019, the Financial Accounting Foundation (FASB) released the 2020 U.S. GAAP Financial Reporting Taxonomy, the 2020 SEC Reporting Taxonomy, and the 2020 XBRL U.S. Data Quality Committee (DQC) Rules Taxonomy (DQCRT).

The 2020 U.S. GAAP taxonomy reflects updates as a result of accounting standards and other improvements. The 2020 SEC taxonomy meets the requirements for SEC financial schedules, guarantors’ condensed consolidating financial information, and disclosures about activities related to oil and gas production.

As explained in the FASB’s press release, the “DQCRT is a FASB taxonomy that includes in a derivative format XBRL US DQC Rules published by XBRL US as validation checks for XBRL filings with the SEC. The purpose of the DQCRT is to improve exposure to and compliance with the DQCRs. This initial implementation is limited to three DQCRs. Over time, additional DQCRs are likely to be included.”

The taxonomies are subject to final SEC approval, which is expected to be granted in early 2020.

Review the press releaseU.S. GAAP taxonomy page, and SEC taxonomy page on the FASB’s Web site.

ESMA reports on EU issuers’ use of APMs

Dec 20, 2019

On December 20, 2019, the European Securities and Markets Authority (ESMA) published a report that builds on a desktop review of 2018 annual financial reports to assess issuers’ compliance with the guidelines.

In June 2015, the European Securities and Markets Authority (ESMA) published its final Guidelines on Alternative Performance Measures (APMs) for listed issuers that became effective in July 2016.

The assessment of issuers’ compliance with the guidelines shows that there is significant room for improvement as only a minority of issuers comply with all principles. The report also highlights that the use of APMs is widespread in all sectors and within all regulated documents. Significant diversity exists in the number and type of APMs used, as well as in their labels and definitions. ESMA notes that ratios and subtotals included inside financial statements may also fall within the definition of an APM and thus should comply with the guidelines.

ESMA will continue to monitor the application of the guidelines and take appropriate actions in case of infringements. ESMA will also submit the report to the IASB as part of its contribution to the IASB’s exposure draft consultation on General Presentation and Disclosures.

Review the report on the ESMA's website.

SEC Issues Guidance on Disclosure Requirements Related to Intellectual Property and Technology Risks Associated With International Operations

Dec 19, 2019

On December 19, 2019, the Securities and Exchange Commission’s (SEC) Division of Corporate Finance issued, "Intellectual Property and Technology Risks Associated with International Business Operations".

The guidance provides “views regarding disclosure obligations that companies should consider with respect to intellectual property and technology risks that may occur when they engage in international operations.”

Review the staff guidance on the SEC’s Web Site.

Correction list for hyphenation

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