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Chief Accountant of the SEC comments on revenue recognition

Mar 24, 2016

On March 24, 2016, the Securities and Exchange Commission (SEC) released a speech from Jim Schnurr, Chief Accountant of the SEC, where he shared some of his thoughts and perspectives on the continuing transition activities for the new revenue standard at an accounting and reporting congress in Philadelphia.

One of the aspects Mr. Schnurr elaborated on was the status of the revenue transition resource group (TRG) formed jointly by the IASB and the FASB. In January this year, the IASB announced that it will no longer attend TRG meetings. The FASB declared in February that it will continue to address implementation issues and has scheduled three TRG meetings for 2016.

On this development, Mr. Schnurr commented:

While I am optimistic that the key practice issues that require standard setting have been identified through the implementation activities of preparers, auditors and standard setters, I am concerned that there are still a number of questions that would benefit from the TRG process. [...] Without joint participation of the IASB’s TRG in the coming scheduled FASB TRG meetings, there is a concern that IFRS 15 may be interpreted through a U.S. GAAP lens without the perspective of IFRS preparers.

He even went as far as suggesting that IFRS preparers could "provide input to the FASB staff and the FASB TRG participants to the extent they believe they have important factors that should be considered for discussion by the FASB TRG". At a minimum, he noted, he expected SEC registrants to monitor the TRG discussions and meeting minutes to inform their selection and implementation of reasonable policies.

Review the full text of Mr. Schnurr's speech on the SEC's website.


IPSASB concludes interview series

Mar 24, 2016

On March 24, 2016, the International Public Sector Accounting Standards Board (IPSASB) released the final installment of its interview series with Ian Carruthers who took office as new IPSASB Chair on January 1, 2016. In the fifth installment, Mr. Carruthers looks ahead and identifies key priorities for the IPSASB.

Please click to access all interviews on the IPSASB website. They are:

  • What are IPSAS?
  • Why is IPSAS Adoption Important?
  • What are the IPSASB's Key Achievements?
  • What are the IPSASB's Current Areas of Focus?
  • What are Your Key Priorities as IPSASB Chair?
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2016-2017 federal budget highlights

Mar 22, 2016

On March 22, 2016, the Minister of Finance, Bill Morneau, presented the 2016-2017 budget in the House of Commons. In its first budget, the new government has expressed a commitment to growing the economy, creating jobs and strengthening the middle class.

The budget proposes $120 billion of investment in infrastructure and job creation over the next ten years, including significant investments in public transit, clean technology, and First Nations, Inuit Peoples and the Metis Nation.

Some of the key features of the budget plan were:

  • Mr. Morneau indicated that the deficit for 2015-2016 will be $5.4 billion while a deficit of $29.4 billion is predicted for 2016-2017. The deficit is projected to decline gradually reaching $14.3 billion by 2020-2021.
  • This budget proposes to keep the small business tax rate at 10.5 percent after 2016 rather than reducing this rate to 9% by 2019 as announced in the previous budget.
  • Where the exception to the deemed association corporation rules applies (i.e., an election not to be associated is made or the third corporation is not a CCPC), the budget proposes to make investment income derived from an associated corporation’s active business ineligible for the small business deduction and taxable at the general corporate tax rate.
  • This budget contains proposals regarding certain recommendations of the Organisation for Economic Co-operation and Development (OECD) as set out in its final reports on its base erosion and profit shifting (BEPS) initiative, released in October 2015. 

A summary of the economic and tax highlights contained in the budget is outlined in our Canadian tax alert

For further details, we refer you to the Ministry of Finance website.


IASB issues "Investor Update" newsletter

Mar 22, 2016

On March 22, 2016, the International Accounting Standards Board (IASB) issued the ninth edition of its newsletter “Investor Update,” which provides investors with quick access to information about current accounting and financial reporting topics.

This issue fea­tures:

  • An interview with the President of the Asian Infrastructure Investment Bank, Mr Jin Liqun.
  • An overview of key features in the new leases standard, IFRS 16.
  • Current pro­jects that need input from the in­vest­ment com­mu­nity.
  • A cal­en­dar of current events.

The In­vestor Update newslet­ter is avail­able on the IASB’s website.

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Recent sustainability reporting developments

Mar 22, 2016

On March 22, 2016, the Global Reporting Initiative (GRI) released "The Next Era of Corporate Disclosure: Digital, Responsible, Interactive," a digital publication that maps out the future of sustainability reporting and disclosure.

According to GRI, the future will involve new formats with organizations moving from annual reports to sustainability data exchange, while focusing on major challenges such as climate change and human rights. The publication is the culmination of the first year of GRI’s "Sustainability and Reporting 2025" project and provides insights from these discussions.

Review the report on the GRI's website.


IASB updates its work plan

Mar 18, 2016

On March 18, 2016, the International Accounting Standards Board (IASB) released its updated work plan.

Updates regarding the im­ple­men­ta­tion projects are:

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


IASB webcast on IFRS 16 transition now available

Mar 18, 2016

On March 18, 2016, the International Accounting Standards Board (IASB) made available a webcast related to IFRS 16 transition requirements for lessees, as part of its series on IFRS 16 implementation.

This webcast discusses the transition steps that a lessee is required to perform and includes highlights of available transition relief and the decisions that need to be made at each stage.

The webcast is available on the IFRS 16 implementation page on the IASB’s website.


IASB member discusses the disclosure initiative

Mar 18, 2016

On March 18, 2016, the International Accounting Standards Board member, Gary Kabureck, issued an article, “Footnotes of the Future — Reflections from the Disclosure Initiative.” In his article, he discusses the progress the Board has made to improve disclosure effectiveness and looks at the next steps for this project.

The article features:

  • Examples of how the amendments to IAS 1 in December 2014 helped preparers improve their financial reporting.
  • The importance of identifying the primary users.
  • An assessment of disclosure materiality.
  • Discussion on material and immaterial errors.

The full article is available on the IASB’s website.


Report on the February 2016 IFRS Advisory Council meeting

Mar 11, 2016

On March 11, 2016, the International Accounting Standards Board (IASB) released a summary of the IFRS Advisory Council meeting held in London on February 23–24, 2016. Highlights of the meeting will be thorough discussions of the review of structure and effectiveness of the IFRS Foundation and of the future of corporate reporting.

The report, prepared by Chair of the IFRS Advisory Council Joanna Perry, notes the following dis­cus­sions:

  • IASB ac­tiv­i­ties — Members received a report of recent ac­tiv­i­ties and were congratulatory of the IASB bringing together implementation and education into one unit.
  • Trustee ac­tiv­i­ties — Members received an updated on the January Trustees meeting and were presented with the IFRS Foundation Strategy approved by the Trustees.
  • Post-implementation reviews strategy — Members discussed the primary objective of PIR and when a PIR would be necessary.
  • Review of the structure and ef­fec­tive­ness of the IFRS Foun­da­tion — Members discussed governance aspects of the review.
  • IFRS Foundation funding — The Council believed it is useful for members to have access to an Aide-Memoire and that there may be opportunities for additional funding from the public.
  • Corporate reporting — Members discussed consultation documents from the Federation of European Accountants and the Financial Stability Board and the Carbon Tracker Initiative on the implications of climate change in financial and corporate reporting.
  • Conceptual framework — Members provided advice related to the conceptual framework exposure draft.

The full report on the council’s February meeting is available on the IASB's Web site.


EFRAG and ICAS issue financial reporting research report

Mar 09, 2016

On March 9, 2016, the European Financial Reporting Advisory Group (EFRAG) and the Institute of Chartered Accountants of Scotland (ICAS) issued a research report, “Professional investors and the decision usefulness of financial reporting,” which examines the use of financial reporting by professional investors and how the results of the research may have standard setting implications.

The research report discovered that:

  • “The objective of investors (valuation or stewardship) does matter.
  • Investors are strongly anchored on the income statement.
  • Investors have strong reservations about the representational faithfulness of bottom line figures.
  • Regardless of its shortcomings, financial accounting information is a key input factor for investors' decision making.
  • The quality of corporate governance, including audit, influences investors' assessment of the representational faithfulness.”

In addition, the research report noted that (1) different objectives for financial reporting need to be prioritised by standard setters; (2) income statements were considered more useful than the balance sheet; (3) standardised performance measures for the income statement need to be enhanced; and (4) "investors' perceptions of corporate governance significantly affect their views of representational faithfulness."

For more information, see the press release and report on the EFRAG’s website.

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