At Compliance Week's 2018 conference, partners at Deloitte said certain changes in accounting rules for leases and revenue recognition are driving discussions about whether companies should change the way they manage contracts and compensate certain employees.

The discussions seem a little more advanced in the context of new revenue recognition rules, but lease implications are causing some reflection. Even new rules for recognizing loan losses are driving new conversations at financial institutions.

Review the full article on Compliance Week's website.

In addition, the webcast answers certain questions presented to the Board during the exposure draft period, as well as next steps in the project.

Review the press release on the Board’s website.

Below is an analysis of all changes made to the work plan since our last analysis on April 30, 2018.

Maintenance project

• Classification of Liabilities (Proposed Amendments to IAS 1) [ED] – The IASB now expects to decide the project direction in Q3/2018. Previously the final amendments to IAS 1 were to have been issued in the second half of 2018.
• Definition of a Business, proposed amendments to IFRS 3 [ED] – The IASB now expects to issue the final amendments to IFRS 3 in the second half of 2018. Previously they were to have been issued in June 2018.
• Lease in­cen­tives (amend­ments to IFRS 16 Il­lus­tra­tive Ex­am­ples) — Added pro­ject to work plan as part of the Annual Improvements to IFRSs 2017-2019 Cycle [Research]; previously no mile­stone or ex­pected date was listed.

Research project

• Discount Rates [Research] – The IASB now expects to issue the research summary in Q3/2018. Previously it was to have been issued in June 2018.
• Goodwill and Impairment [Research]  - The IASB has removed the expected date of issuing a discussion paper or exposure draft. Previously the date was shown as the second half of 2018.
• Management Commentary (Wider corporate reporting) [Research] – The IASB now expects to issue an exposure draft in 2020. Previously no expected date was listed.
• Share-based payments, potential amendments to IFRS 2 [Completed] – The IASN now expects to issue a research summary in Q3/2018. Previously it was to have been issued in June 2018.

Other pro­jects

• IFRS Taxonomy Update – Common Practice (IFRS 13) – The IASB now expects to issue the proposed update in Q3/2018. Previously, it was to have been issued in June 2018.

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

The topics discussed at this meeting include:

• Contract boundary for premium allocation approach
• Reinsurance contract boundary
• Educational materials
• Boundary of reinsurance contracts held with repricing mechanisms
• Combination of insurance contracts
• Determining the risk adjustment for non-financial risk in a group of entities
• Cash flows within the contract boundary
• Determining the quantity of benefits for identifying coverage units
• Implementation -challenges outreach report
• Reporting on other questions submitted to the IASB Transition Resource Group for IFRS 17

Review the summary on the AcSB's website.

Few, if any, analysts have questioned financial executives about their lease plans during the Q&A sessions of recent earning calls, where a majority of the accounting discussions revolved around revenue recognition issues.

And even once implementation begins in earnest as the 2019 deadline grows nearer, equity analysts admit they see fewer ramifications on their buy/sell decisions and models.

Review the full article on FEI's website and an article on how companies are still unprepared for leasing standard on Accounting Today's website.

The proposed amendments would introduce a new threshold that requires a company to consider the expected benefits to users of financial statements and the cost to the company of applying accounting policy changes that result from IFRS Interpretation Committee agenda decisions retrospectively.

Review the press release and the overview on the Board's website.

The purpose of the TRG is to seek feedback on potential issues related to implementation of IFRS 17, Insurance Contracts. During the meeting, the TRG discussed the following:

• Combination of insurance contracts
• Determining the risk adjustment for non-financial risk in a group of entities
• Cash flows within the contract boundary
• Boundary of reinsurance contracts held with repricing mechanisms
• Determining the quantity of benefits for identifying coverage units
• Implementation challenges outreach report
• Reporting on other questions submitted

A summary on the meeting and audio recordings of each session are available on the TRG meeting page on the International Accounting Standards Board's website.

Smaller companies may lack resources to make timely accounting changes, resulting in an implementation lag and significant issues, including restatements and control weaknesses.

Looking at 2,803 Russell 3000 companies that referenced ASC 606 in Q4 financial statements, they considered the following factors when assessing a company’s implementation process:

• Adoption Method Used
• Control Weakness
• Impact Disclosure
• Revenue streams and specific areas of accounting affected
• Other impacts
• Completion stage
• SEC Comment Letters
• Outlook

Review the analysis on Audit Analytics' website.

The FASB’s Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers, provides a comprehensive revenue recognition model intended to reduce the complexity inherent in today’s guidance by increasing financial statement comparability across companies and industries.

Review the article on FEI's website.

Review the speech on the SEC's website and an interview on Merrill Corporation's website.