News

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IASB Chairman speaks on "The Future of Financial Reporting" at the Australian Accounting Standards Board forum

Oct 10, 2017

On October 10, 2017, the Australian Accounting Standards Board (AASB) hosted a forum featuring special guest IASB Chairman, Hans Hoogervorst, who delivered a presentation on the "big picture" and the IASB’s plans for global financial reporting.

The forum also featured a panel discussion on users of financial statements, further financial information to be reported and an analysis of financial information.

Review a summary of the key discussion points and the slides for the presentation on the AASB's website.

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IASB issues "Investor Update" newsletter

Oct 09, 2017

On October 9, 2017, the International Accounting Standards Board (IASB) issued the fourteenth edition of its newsletter "Investor Update", which provides investors with quick access to information about current accounting and financial reporting topics.

This issue features:

  • Challenges and approaches to defining an EBIT subtotal
  • Analysis of the disclosures in the 2016 annual and 2017 interim reports related to the implementation of IFRS 15, Revenue from Contracts with Customers
  • Project updates
  • Information on investor materials and current events

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

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Trump administration proposes eliminating pay-gap reporting requirement for companies

Oct 06, 2017

On October 6, 2017, MarketWatch released an article that discussed how the Trump administration proposed scrapping a requirement that companies disclose the pay ratio between chief executives and employees, one of several recommendations outlined in a detailed report on capital markets.

The U.S. Treasury Department (Treasury) said parts of the Dodd-Frank Act should be repealed, among other steps, to promote economic growth and capital formation. "By streamlining the regulatory system, we can make the U.S. capital markets a true source of economic growth which will harness American ingenuity and allow small businesses to grow," Treasury Secretary Steven Mnuchin said in remarks accompanying a report on regulation and markets.

The Treasury recommends that Section 1502 (conflict minerals), Section 1503 (mine safety), Section 1504 (resource extraction), and Section 953(b) (pay ratio) of Dodd-Frank be repealed and any rules issued pursuant to such provisions be withdrawn, as proposed by H.R. 10, the Financial CHOICE Act of 2017. In the absence of legislative action, the Treasury recommends that the SEC consider exempting smaller reporting companies (SRCs) and emerging growth companies (EGCs) from these requirements.

Appendix B of the report includes a list of all of the Treasury’s recommendations, including the recommended action, the method of implementation (Congressional and/or regulatory action), and which Core Principles are addressed. 

Review the article on MarketWatch's website and the report on U.S. Treasury Department's website.

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IFRS Foundation issues case study report on disclosure improvements

Oct 05, 2017

On October 5, 2017, the IFRS Foundation has issued a case study report, “Better Communication in Financial Reporting — Making disclosures more meaningful.” The case study report looks at six companies from varied industries and describes their process to improve disclosures.

The case study report provides illustrations before and after the companies implemented a change in the way they communicated the information and connects the changes to relevant principles within the IASB’s Discussion Paper Disclosure Initiative — Principles of Disclosure.

Review the press release and case study report on the IASB’s website.

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Bill 141 Proposed amendments to the Act respecting the AMF with regard to whistleblowing

Oct 05, 2017

On October 5, 2017, the Government of Quebec released a proposed amendments to the "Act respecting the Autorité des marchés financiers", which is intended to protect whistleblowers. The proposed amendments could have significant and potentially problematic consequences under certain circumstances.

The Bill states that it is forbidden to take a reprisal or to threaten to take a reprisal against a person who, in good faith, makes a disclosure to the Authority or who cooperates in an investigation. It specifies that the demotion, suspension or dismissal or transfer of the employee is presumed to be a reprisal.

The Bill also states that persons who make a disclosure may do so despite any disclosure constraints provided elsewhere in Quebec laws, such as the Act respecting the protection of personal information in the private sector (chapter P-39.1). The Bill goes further by providing that persons who make a disclosure may do so despite any provision of a contract or duty of loyalty or confidentiality that may be binding on them. The Bill specifies, however, that the authorized waiver of professional secrecy does not apply to professional secrecy between a lawyer or a notary and a client.

The waiver of professional secrecy, therefore, applies to all other professionals, such as accountants. If this provision is adopted as proposed, it may create significant challenges for auditors in establishing the relationship of trust with clients and their audit committees, in particular, because transparent communication of information between a client and an auditor is a key ingredient to audit quality.

Review the Bill and proposed amendments on the Government of Quebec's website and an article on McCarthy Tétrault LLP's website.

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Regulators Release New Findings and Trends on Women on Boards and in Executive Officer Positions

Oct 05, 2017

On October 5, 2017, the securities regulatory authorities in Alberta, Manitoba, New Brunswick, Newfoundland and Labrador, Northwest Territories, Nova Scotia, Nunavut, Ontario, Québec, Saskatchewan and Yukon (the participating jurisdictions) published CSA Multilateral Staff Notice 58-309 "Staff Review of Women on Boards and in Executive Officer Positions – Compliance with NI 58-101 Disclosure of Corporate Governance Practices".

The notice summarizes results from a review of the corporate governance disclosure of 660 non-venture issuers with year ends between December 31, 2016 and March 31, 2017 as it relates to women in leadership roles. This is the third review following the implementation of rules under National Instrument 58-101 Disclosure of Corporate Governance Practices, which require non-venture issuers to disclose certain information regarding women on boards and in executive officer positions. The notice also highlights trends observed in the three reviews to date as well as certain compliance findings.

The review found the following:

  • The total percentage of board seats occupied by women has increased to 14 per cent from 11 per cent in the first year, reflecting a difference of three per cent.
  • Of the issuers with a market capitalization over $10 billion, 24 per cent of board seats are held by women, compared with 21 per cent in the first year, reflecting a difference of three per cent.
  • In the issuer sample, 61 per cent of issuers have at least one woman on their boards, compared to 49 per cent in the first year, reflecting a difference of twelve per cent.
  • The percentage of issuers with at least one woman in an executive officer position increased to 62 per cent from 60 per cent in the first year, reflecting a difference of two per cent.

The review noted a significant increase in the percentage of issuers that have adopted a policy relating to the representation of women on their board. Of the issuers sampled, 35 per cent have adopted a policy, representing a 20 per cent increase over three years. Those issuers that have adopted such a policy had a higher percentage of women on their boards compared to issuers without such a policy.

Review the press release and the Staff Notice on the participating jurisdictions website.

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AcSB Exposure Draft – Accounting Policies and Accounting Estimates (Proposed amendments to IAS 8)

Oct 04, 2017

On October 4, 2017, the Accounting Standards Board (AcSB) issued its Exposure Draft that corresponds to the IASB’s Exposure Draft on this topic. Stakeholders are encouraged to submit their comments by January 15, 2018.

The proposed amendments help to distinguish between accounting policies and accounting estimates by clarifying that accounting estimates are judgments and assumptions used in applying an accounting policy when an item cannot be measured with precision.

Review the Exposure Draft on the AcSB's website.

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Divergent Regulatory Approaches to Cryptocurrency Offerings: Developments in Canada, the United States, and China

Oct 04, 2017

In October 2017, McMillan LLP released a bulletin that considers the statements made by regulators as they adopt their respective mechanisms for dealing with cryptocurrency as a new investment vehicle.

The issuance of cryptocurrency has become more common as a capital raising mechanism, which has caused considerable attention to be paid to cryptocurrency offerings by both the investing public and the governmental authorities responsible for securities regulation in various jurisdictions around the word.

The Canadian approach to cryptocurrency offerings appears to be to apply the current regulatory system for securities to the offerings, once the test for a security has been met on the basis of the individual set of facts related to the type of cryptocurrency and the offering itself.

Review the bulletin on McMillan LLP's website.

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IASB posts webcast on IFRS 9 disclosure requirements

Oct 03, 2017

On October 3, 2017, the International Accounting Standards Board (IASB) staff made available a webcast which provides a high-level discussion on key disclosure requirements in IFRS 9 and the importance of high-quality disclosure information.

The requirements in IFRS 9, Financial Instruments are different from those in IAS 39 in many aspects, and for some, it will result in a significant change in the information provided in the financial statements. High quality disclosures are important for investors and others to understand what has changed in the transition from IAS 39 to IFRS 9, and to understand the basis for the new amounts reported in the financial statements.

Review the press release and webcast on the IASB’s website.

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Recent sustainability and integrated reporting developments

Oct 03, 2017

A summary of recent developments at IIRC/ICAS, WBCSD and SASB.

The International Integrated Reporting Council (IIRC) and the Institute of Chartered Accountants of Scotland (ICAS) published a new report describing how businesses can achieve Sustainable Development Goals (SDGs). The report argues that corporate reporting frameworks can play a critical role in enhancing corporate contribution to the SDGs.

The World Business Council for Sustainable Development (WBCSD) launched the Reporting Exchange, a free, online platform designed to help businesses find trustworthy, up to date and accessible sustainability-related information – making it easier for businesses to know what, when and how to report.

The Sustainability Accounting Standards Board (SASB) opened its full suite of sustainability reporting guidelines to public comment. The exposure drafts, which impact 79 industries, are open for a 90-day public comment period.

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