News

Canada Image

Top ten issues for CFOs in 2017-2018

Sep 13, 2017

In September 2017, the Financial Executives International (FEI) Canada's Policy Forum released a list of Top 10 issues for CFOs and senior financial executives to consider, as they start out the new fiscal year for 2017-18.

The top 10 issues include:

Corporate Reporting

  • Member preparedness for implementation of new complex financial reporting requirements
  • Continued evolution to a more challenging and demanding reporting environment in a cost-conscious world:
  • Corporate reporting — More than accounting

Governance and Risk

  • Ensuring governance keeps pace with growth and improving risk management capabilities/practices
  • Sustainability, Corporate Social Responsibility and ESG:

Treasury and Capital Markets

  • Cash flow best practices, treasury risks, and raising money/financing

Taxation

  • Income tax simplification

Information Technology

  • Cybersecurity and business continuity
  • Disruption through digital transformation and block chain technology
  • Data analytics and big data

Review the publication on the FEI Canada's website.

IFRS - IASB Image

IASB publishes proposed amendments to IAS 8 regarding accounting policies and accounting estimates

Sep 12, 2017

On September 12, 2017, the International Accounting Standards Board (IASB) published an exposure draft "Accounting Policies and Accounting Estimates (Proposed amendments to IAS 8)" to help entities to distinguish between accounting policies and accounting estimates. Comments are requested by January 15, 2018.

 

Suggested changes

The changes proposed in ED/2017/5 Accounting Policies and Accounting Estimates (Proposed amendments to IAS 8) are focused on three areas:

  • Relation of accounting policies and accounting estimates to each other.
    • The ED proposes to clarify the exisiting definition of accounting policies by removing the terms "conventions" and "rules" as the Board feels that their meanings are not clear and because these terms are not used elsewhere in IFRSs. Also, the Board proposes to clarify the term "bases" by using "measurement bases" instead.
    • The ED proposes to add a definition of accounting estimates because so far a defintion has not been provided. The definition makes clear that accounting policies are the overall objectives and accounting estimates are the inputs used in achieving that objective by stating that "accounting estimates are judgements or assumptions used in applying an accounting policy when, because of estimation uncertainty, an item in financial statements cannot be measured with precision".
  • Selecting an estimation technique or valuation technique. The ED proposes to clarify that selecting an estimation technique or valuation technique (the ED deliberately uses both terms as both terms are used in IFRSs) used when an item cannot be measured with precision constitutes making an accounting estimate.
  • IAS 2 Inventories. In developing the ED, the Board concluded that that selecting one of the two cost formulas for interchangeable inventories is not an attempt to estimate the actual flow of these inventories, therefore it does not constitute making an accounting estimate but selecting an accounting policy.

 

Effective date

The exposure draft does not contain a proposed effective date which the IASB intends to decide on after the exposure. However, the Board has already concluded that an entity should apply the amendments only to changes in accounting policies and changes in accounting estimates that occur on or after the start of the first annual period in which the entity applies the amendments.

Review the press release and the exposure draft on the IASB's website.

United States Image

Modernizing Compliance: 6 Questions Every Finance Executive Should Be Asking

Sep 12, 2017

On September 12, 2017, Financial Executives International (FEI) released an article by Tom Nicolosi, Deloitte Risk and Financial Advisory principal, and Carey Oven, Deloitte Risk and Financial Advisory partner, where they discuss the many reasons why compliance modernization seems to evade some organizations.

There are some important questions all CFOs and finance executives could benefit from asking their compliance teams when considering a transformation process. These include:

  1. How are we using technology to support and enable compliance testing?
  2. Are we investing in people who know how to use that technology?
  3. What kind of alternative delivery model strategy have we considered?
  4. Have we taken a hard look at how compliance is organized throughout the business to identify redundancies in the system?
  5. How are we going to see a return on investment?
  6. Is our compliance function focused on making the transformation to value creation?

Review the article on FEI's website.

Australia Image

Plans to mandate a modern slavery reporting requirement

Sep 12, 2017

In September 2017, the Australian Government released a consultation paper on its proposed model for reporting on modern slavery in supply chains.

According to the paper, the government plans to require businesses with total annual revenues of at least $100 million to publish annual statements outlining their actions to address modern slavery in their operations and supply chains.

Review the consultation paper on the Australian Government's website and an article on the Governance Institute of Australia's website.

US_SEC Image

SEC chief accountant discusses advancing high-quality reporting in financial and capital markets

Sep 11, 2017

On September 11, 2017, the Securities and Exchange Commission (SEC) released a speech by SEC Chief Accountant, Wesley Bricker, given at the recent AICPA National Conference.

In his speech, Mr. Bricker discussed a number of topics related to public company reporting, including the role of financial reporting in our financial and capital markets, the FASB’s new credit loss standard, and recent PCAOB activities.

Review the speech on the SEC's website.

ÌFRS - CFA Institute Image

Study on providing financial information in a structured format

Sep 08, 2017

In September 2017, the CFA Institute, a global association of investment professionals, published "The Cost of Structured Data: Myth vs. Reality".

The study notes that the potential benefits of using structured data have not been realized yet, even though the use of such data can potentially improve the way financial information can be consumed by investors, regulators, and other users. The authors argue that this is primarily the case because companies mainly see structured data and reporting as a cost burden.

Therefore, the study looks first at what companies are saying about the costs associated with their XBRL filings and then goes through several case studies to demonstrate how, with proper implementation, companies can benefit from structured data. The authors conclude that if companies:

  • bring structured reporting in-house instead of using outside vendors to prepare their regulatory filings,
  • implement inline XBRL so that the data is both human and machine readable, and
  • curtail the use of company-specific tags

they can reduce costs, allowing both companies and users to benefit from structured reporting.

Review the full study on the CFA Institute's website.

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

IESBA Proposes Revised Ethical Requirements Prohibiting Improper Inducements

Sep 08, 2017

On September 8, 2017, the International Ethics Standards Board for Accountants (IESBA) released for public comment the Exposure Draft, "Proposed Revisions to the Code Pertaining to the Offering and Accepting of Inducements." The proposals strengthen the Code of Ethics for Professional Accountants (the Code) by clarifying the appropriate boundaries for the offering and accepting of inducements, and by prohibiting any inducements with intent to improperly influence behavior.

The proposed comprehensive framework covers all forms of inducements and applies to both professional accountants in business and professional accountants in public practice. It also provides enhanced guidance on the offering and accepting of inducements by professional accountants’ immediate or close family members.

Among other matters, the proposals also require professional accountants to address any threats to compliance with the fundamental ethical principles in accordance with the Code’s conceptual framework where there is no improper intent.

Comments are requested by December 8, 2017.

Review the press release and the Exposure Draft on the IESBA's website.

Leaf - sustainability (green) Image

The Role of Stock Exchanges in Fostering Economic Growth and Sustainable Development

Sep 07, 2017

In September 2017, the United Nations Conference on Trade and Development (UNCTAD) and the World Federation of Exchanges (WFE) published a report examining the role of stock exchanges in promoting economic growth and sustainable development.

The report notes that by mid-2017 there were 32 stock exchanges providing formal guidance to issuers on reporting environmental, social, and governance (ESG) information and that stock exchanges, through their ability to influence the reporting behaviour of their listed entities, are successfully generating a rapid uptake in sustainability disclosure.

Review the report on the WFE's website.

IFRS - ICAEW Image

ICAEW briefing paper on IFRS 9 for banks

Sep 06, 2017

In September 2017, the Institute of Chartered Accountants in England and Wales (ICAEW) published a briefing paper for analysts and other market participants on IFRS 9, "Financial Instruments". The paper is accompanied by a shorter briefing note for a non-technical audience.

The briefing paper covers:

  • Development of IFRS 9 and expected loss accounting
  • Regulatory expected loss
  • Staging of provisions
  • Complexities of presenting and understanding the new information

The briefing note covers an understanding of the role of banks, changes required by IFRS 9 and the expected effect on banks in applying its requirements.

Review the Briefing paper and the Briefing note on the ICAEW's website.

US_AICPA Image

AICPA issues seven revenue working drafts

Sep 06, 2017

On September 6, 2017, the AICPA’s revenue recognition task forces released for public comment seven working drafts on accounting issues associated with the implementation of the new revenue standard for aerospace and defense, asset management, broker-dealer, engineering and construction, power and utility, software, and time-share entities.

The working drafts address the following topics:

  • Disclosure requirements (aerospace and defense and engineering and construction)
  • Costs of managing investment companies (asset management)
  • Soft-dollar revenue (broker-dealers)
  • Revenue recognition for fixed-price contracts (power and utilities)
  • Determination of whether a customer’s right to acquire additional users/copies of a delivered software product constitutes an option to acquire additional software rights or variable consideration related to software rights already purchased (software)
  • Principal-versus-agent considerations related to time-share interval sales (time shares)

Comments on the working drafts are due by November 1, 2017.

For more information, see the revenue recognition page on the AICPA’s Web site.

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.