News

IESBA (International Ethics Standards Board for Accountants) (lt gray) Image

IESBA Chairman’s Keynote Address at APESB Dinner in Sydney

Nov 08, 2018

On November 8, 2018, Dr. Stavros Thomadakis, Chairman of the IESBA, gave a keynote address at an APESB dinner in Sydney, Australia. In celebrating the news regarding the incorporation of the Restructured International Code of Ethics into the Australian ethical standards, Dr. Thomadakis shared his thoughts about the essentials of the Code, its global positioning, and the challenges that both standard setters and users of the Code face for the present and future.

Topics covered included:

  • Essentials of the Ethics Code
  • Global Positioning of the Code
  • Public Expectations, Public Interest, Regulation 
  • The Technological Revolution
  • Global Ethical Practice: Integration or Fragmentation? 

Re­view the speech on the IESBA's web­site.

FRC (United Kingdom Financial Reporting Council) Image

FRC Lab guidance on reporting performance metrics

Nov 07, 2018

In November 2018, the Financial Reporting Lab of the UK Financial Reporting Council (FRC) published guidance for companies on the presentation of performance metrics in their reporting following calls for clarity from investors.

Performance metrics – Principles and practice includes examples of how companies can apply the principles outlined in the Lab’s earlier project report Performance metrics - an investor perspective published in June 2018. That report found that investors wanted performance metrics to be aligned to strategy, transparent, in context, reliable and consistent.

Review the guidance on the FRC's website.

IFRS - ASAF Image

Summary of the October 2018 ASAF meeting now available

Nov 07, 2018

On November 7, 2018, the staff of the International Accounting Standards Board (IASB) made available a summary of the discussions of the Accounting Standards Advisory Forum (ASAF) meeting held in London on October 4, 2018.

The topics covered during the meeting were the following (numbers in brackets are ref­er­ences to the cor­re­spond­ing para­graphs of the summary):

  • Financial in­stru­ments with char­ac­ter­is­tics of equity (1–18): The ASAF members discusses views and feedback on the Dis­cus­sion Paper Financial In­stru­ments with Char­ac­ter­is­tics of Equity issued in June 2018.
  • IFRS 3 Business Combinations reference to the Conceptual Framework (19–27): ASAF members discussed problems that could arise if an existing reference in IFRS 3 to the Framework for the Preparation and Presentation of Financial Statements were replaced with a reference to the 2018 Conceptual Framework.
  • Extended external reporting (28–36): ASAF members gave feedback on the New Zealand’s External Reporting Board’s research on preparers of corporate reports and users of EER information.
  • Accounting policies and accounting estimates (37–50): ASAF members provided their views on the definition of accounting estimate and accounting policy and were updated on feedback received from the IFRS Interpretations Committee.
  • Rate-regulated activities (51–58): ASAF members provided their views on disclosure objectives and requirements for defined rate regulation.
  • Extractive activities (59–64): The ASAF members provided information on what significant changes since the issuance of the 2010 Discussion Paper Extractive Activities.
  • Project updates and agenda planning (65–70): ASAF members discussed the proposed agenda for the December 2018 ASAF meeting, disclosure initiative, and goodwill and impairment.

A full summary of the meeting is available on the IASB's website.

Leaf - sustainability (green) Image

CRD announces two-year project for better alignment

Nov 07, 2018

On November 7, 2018, at the World Congress of Accountants in Sydney, Australia, the Corporate Reporting Dialogue (CRD), which brings together organizations that have significant international influence on the corporate reporting landscape, announced a two-year project focused on aligning the standards and frameworks of its members.

The Corporate Reporting Dialogue was launched in June 2014 as a way to achieve dialogue and alignment between some of the key standard-setters and framework developers around the world. It includes the Carbon Disclosure Project (CDP), the Climate Disclosure Standards Board (CDSB), the Financial Accounting Standards Board (FASB, observer), the International Accounting Standards Board (IASB), the Global Reporting Initiative (GRI), the International Organization for Standardization (ISO), the Sustainability Accounting Standards Board (SASB), and is convened by the International Integrated Reporting Council (IIRC).

CRD participants hold regular meetings to share their views and provide further cooperation. They have already released a common map of the reporting landscape (May 2015) and a materiality statement (March 2016). Under the new project, participants will work on aligning their standards with the recommendations published by the Task Force on Climate-related Financial Disclosure (TCFD) in June 2017. They will map their respective sustainability standards and frameworks to identify the commonalities and differences between them, jointly refining and continuously improving overlapping disclosures and data points to achieve better alignment, taking into account the different focuses, audiences and governance procedures.

Importantly, participants will also identify how non-financial metrics relate to financial outcomes and how this can be integrated in mainstream reports. This work will be undertaken with the overview of financial standard-setters with the ultimate aim of integrating financial and non-financial reporting.

Review the participants' joint press release on the IIRC's website.

SASB (Sustainability Accounting Standards Board) Image

SASB issues industry-specific sustainability accounting standards

Nov 07, 2018

On November 7, 2018, the US Sustainability Accounting Standards Board (SASB) issued the world's first set of industry-specific sustainability accounting standards covering financially material issues in 77 industries. The standards aim at providing investors with in-depth information about the impact of a company’s actions on society and the environment - they come at a time of increased investor concern about companies' business practices.

What makes the standards unique in the marketplace is their focus on industry specificity and financial materiality. By addressing the subset of sustainability factors most likely to have financially material impacts on the typical company in an industry, SASB’s industry-specific standards help investors and companies make more informed decisions. They are global in nature and contain concepts that are important for investors and businesses around the world.

The release marks a six-year effort by the SASB. Over the course of those six years, the SASB released several sets of provisional standards for different industries, which have already been used by companies around the world. The SASB standards can be used alongside other sustainability frameworks and are well-aligned with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and are complementary to the Global Reporting Initiative (GRI).

Review the press release and download the standards on the SASB's website.

United States Image

Why companies should blow up best practices

Nov 07, 2018

On November 7, 2018, Geoff Tuff, principal at Deloitte Consulting and senior leader of the organization’s innovation and applied design practices, and Steven Goldbach, principal at Deloitte, chief strategy officer and member of its U.S. executive leadership team, joined the Knowledge@Wharton radio show to talk about their book, "Detonate: Why and How Corporations Must Blow Up Best Practices (and Bring a Beginner’s Mind)".

Both Tuff and Goldbach have learned one sure thing after decades of working with different companies: Relying on best practices does not guarantee future success. Today’s accelerated speed of change means that business leaders need to ditch old habits and bring a fresh perspective to their operations if they want to get to the top and stay there.

Tuff emphasizes:

When change accelerates and we can no longer rely on the lessons of the past to do things well, that’s where best practices become really dangerous.

Review the transcript of the conversation and podcast on Wharton's website.

All - Deloitte Image

Revenue Recognition Implementation Far From Over: A Q&A with Deloitte’s Eric Knachel

Nov 07, 2018

On November 7, 2018, Financial Executives International (FEI) posted an article regarding a conversation with Deloitte Partner, Professional Practice Group, Eric Knachel about what U.S. public companies must turn their attention to in disclosures now that the first few filings have been completed.

U.S. public companies with fiscal years ending December 31st have now adopted the new revenue recognition standard (ASC 606) and applied it for the first time to their quarterly reports. What work is left to do? As public companies continue to better understand the nuances of the new revenue recognition standard, the issue of disclosures remains a critical pain point for CFOs. Benchmarking can be extremely helpful. But what steps can companies take if they find their revenue recognition practices are out of line with what others are doing?

Refer to the article in FEI Daily for details of Deloitte Partner, Eric Knachel’s comments.

 

IFRS - IASB Image

IFRS Foundation announces technology initiative

Nov 05, 2018

On November 5, 2018, the IFRS Foundation announced the launch of its technology initiative. The technology initiative will consider how changes in technology may affect the work done by the International Accounting Standards Board (IASB) in certain areas.

Specifically, the technology initiative will investigate how automation, AI, and the consumption of big data may affect accounting, financial reporting, standard-setting process, and stakeholder engagement.

Review the press release on the IASB’s website.

FRC (United Kingdom Financial Reporting Council) Image

FRC publishes thematic review findings of IFRS 9 and IFRS 15 company disclosures

Nov 05, 2018

On November 5, 2018, the UK Financial Reporting Council (FRC) published two thematic reviews to help companies improve the quality of their corporate reporting in relation to IFRS 9, "Financial Instruments" and IFRS 15, "Revenue from Contracts with Customers".

The reports analyze the disclosures in a sample of companies’ June 2018 interim reports in relation to the adoption of the new standards and provide examples of better practice in explaining their effect.

The FRC’s review identified a number of areas where disclosure could be improved especially with respect to explanations of the impact of adoption of IFRS 15. It highlights that the best disclosures were those that were specific to the company and that provided additional detail for the benefit of providing a relevant and robust explanation of the impact of IFRS 15.

The main impact of IFRS 9 will be felt by banks and the FRC thematic review focused on the adequacy of disclosures regarding the effect of the transition to IFRS 9 in the first year of adoption. The FRC review highlights some areas where disclosure could be improved and some areas where no disclosure had been provided at all. In particular, the FRC highlights that some smaller banks did not sufficiently explain the impact of adopting IFRS 9.

Review the following additional information on the FRC's website:

 

IFRS - EFRAG Image

EFRAG publishes two FICE bulletins

Nov 01, 2018

On November 1, 2018, the European Financial Reporting Advisory Group (EFRAG) issued two bulletins to help constituents better understand the International Accounting Standards Board’s (IASB) discussion paper DP/2018/1 "Financial Instruments with Characteristics of Equity" and participate in the debate on it.

The two bulletins cover (1) the classification criteria included in the DP and (2) the presentation and disclosure requirements included in the DP.

Review the press release and bulletins on the EFRAG's website.

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