On better communication Mr. Hoogervorst offered no new insights, but confirmed that the IASB feels that it now has a good set of standards that covers the vast majority of transactions and would therefore prioritize better presentation and formatting of the information in the financial statements in the coming years, rather than developing new, big standards with focus on recognition and measurement. Similarly, on support of implementation and application, he mainly stressed the importance of the work of the IFRS Interpretations Committee, but offered no detailed insights.

Turning then to wider corporate reporting, Mr. Hoogervorst stated that the IASB is often asked questions about its role in this space and that some constituents would like the IASB to play a more central role in trying to create more uniformity in the multitude of sustainability standards. He admitted:

[T]he IASB knows that financial reporting in the narrow sense has its limitations. There are many elements of value creation which are important to the investor but which are not adequately captured in the financial statements. Investors need to understand a company’s business model and its strategy for long-term value creation. They need to understand the intangibles that are vital to their business model. And, yes, sustainability issues can also be important for long-term value creation in certain industries, just think of mining and car manufacturing.

And yet he also stated:

Let me be clear; we do not plan to get into environmental and sustainability reporting. That is not our area of expertise. There are many other players. Our remit is, and will remain, financial reporting—with focus on the participants in the capital markets. That is investors and potential creditors.

In conclusion, Mr. Hoogervorst offered that there has been a lot of development in this area since 2010 when the IASB published its Management Commentary Practice Statement and therefore, the IASB "is considering" whether to update the practice statement to capture the developments. This topic has been included on the IASB's agenda for its next meeting.

Review the full speech on the IASB's website.

The new revenue standard is effective for all public entities for annual periods beginning January 1, 2018 for calendar year-end public entities. The SEC’s Division of Corporation Finance selectively reviewed filings to monitor and enhance compliance with applicable disclosure and accounting requirements of the new standard. FEI reviewed revenue-related comment letter correspondence between the SEC and filers, and found the following trends:

• Early adopters have been asked to clarify considerations made for operationalizing different aspects of the standard
• The SEC began requesting more robust SAB 74 disclosures for periods ending December 31, 2016
• Several companies have disclosed incorrect effective dates for ASC 606 in their SAB 74 disclosures

Review the press release and the update on FEI's website.

The 2018 SEC Reporting Taxonomy (SRT) moves a range of elements from the GAAP Financial Reporting Taxonomy into a new taxonomy that can be used for companies reporting under both IFRS and US GAAP. 

The broad categories addressed in the SRT include:

• The oil and gas industry
• Financial schedules
• Condensed consolidating financial information for guarantors
• Country code elements
• Common axis/domain used while reporting financials in US-GAAP.

The introduction of the SRT taxonomy eliminates the need for foreign private issuers (FPIs) using the IFRS taxonomy to import the US-GAAP Financial Reporting Taxonomy. This simplifies what would otherwise be a complex process.

Review the announcement on the SEC's website and the taxonomy on the FASB's website.

Following the outcome of the OECD/G20 Project on Base Erosion and Profit Shifting (the BEPS Project), many countries and jurisdictions have implemented measures to reflect the revisions to the Transfer Pricing Guidelines resulting from the 2015 Reports on Action 8-10 Aligning Transfer Pricing Outcomes with Value Creation and on Action 13 Transfer Pricing Documentation and Country-by-Country Reporting, in addition to changes incorporating the revised guidance on safe harbours approved in 2013 as well as consistency changes made to the rest of the OECD Transfer Pricing Guidelines.

The newly updated profiles focus on countries' domestic legislation regarding key transfer pricing principles, including the arm's length principle, transfer pricing methods, comparability analysis, intangible property, intra-group services, cost contribution agreements, transfer pricing documentation, administrative approaches to avoiding and resolving disputes, safe harbours and other implementation measures. The information contained in the TPCP is intended to clearly reflect the current state of countries' legislation and to indicate to what extent their rules follow the OECD Transfer Pricing Guidelines. The information was provided by countries themselves in response to a questionnaire so as to achieve the highest degree of accuracy.

Review the country profiles on the OECD's webiste.

Review the article on Accounting Today's website.

The new webcast is part of a series on the implementation of IFRS 17 and can be accessed on the IASB website. Earlier webcasts and webinars on IFRS 17 are available through an archive on the IASB's website.

Blockchain is seen as a solution in every situation where there is need for a trustworthy record. And that is where blockchain’s next big disruption is: its potential application in inter-organizational records, including accounts management.

In a mature blockchain and an artificial intelligence-driven world, investors could—in real-time—have a true and fair view of financials that are inherently trustworthy. This would eliminate the need for external audits in its current form.

Does this really mean external audits would be extinct?

Not really. First, as it stands today, blockchain suffers from lack of clarity in its administrative framework. In addition, the internal controls surrounding origination and creation points for transactions and configuration of smart contracts and mining may always be a cause of internal control concern and need to be audited. 

Transformation of external audit

One can say with some certainty that the external audits in a blockchain-driven world will need to shift focus from transaction based audits to audit of internal control design and change management.

Review the full article on the IFAC's website.

The broker-dealer working draft addresses underwriting revenues, while the telecommunications working draft covers the determination of transaction prices.

Below is an analysis of all changes made to the work plan since our last analysis on September 22, 2017.

Main­te­nance projects

• Accounting policy changes (changes in accounting policies that result from agenda decisions published by the IFRS Interpretations Committee) — exposure draft is now expected in first quarter of 2018.
• Classification of Liabilities — final amendments are now expected in the second half of 2018.
• Long-term interests in associates and joint ventures — the work plan reflects that the final amendments have been published.
• Improvements to IFRS 8 — Feedback statement on exposure draft is now expected in November 2017.
• Plan amendment, curtailment or settlement — final amendments are now expected in January 2018.
• Prepayment features with negative compensation — the work plan reflects that the final amendments have been published.

Research projects

• Financial in­stru­ments with char­ac­ter­is­tics of equity — a dis­cus­sion paper is now expected in the first half of 2018.
• Principles of disclosure — feedback statement on the discussion paper is now expected in the first quarter of 2018.

Other projects

• IFRS Taxonomy update for prepayment features with negative compensation — New entry added to work plan. Feedback statement on the proposed update is expected in the first quarter of 2018.

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

The Consultation Paper outlines key historical developments related to the CSA’s corporate governance regime, sets out our approach to determining director and audit committee member independence, and describes the approaches to determining independence in other jurisdictions. The Consultation Paper also examines the benefits and limitations of our approach.

Comments should be submitted in writing by January 25, 2018.

Review the press release on the CSA's website and the Consultation Paper on the CSA members’ websites.