XBRL technology uses a data-tagging format that is supposed to make it easier for investors and analysts to compare financial information across companies and industries. Problems with the technology and the inconsistency of the tags used by companies have limited XBRL’s usefulness to many investors, however.

Lou Rohman, vice president of XBRL services at Merrill Corporation, said “The group has issued three sets of rules now and approved them. Now our focus is going to go into topical areas of disclosures, such as the cash flow statement and stock-based compensation disclosures. We’re focusing on how we can get people to tag those consistently and do it error free. We’ll provide rules and guidance.” He believes the quality of the XBRL filings has been improving but still isn’t ideal.

The SEC’s proposal for Inline XBRL could potentially expand the usability of XBRL for auditors and investors. “It’s not a final rule,” Rohman cautioned. “It’s still being discussed. The interesting part about that is the audit requirement. The paper-based financial statements and the XBRL-based ones were separate, so the auditors audited the traditional HTML paper-based financials and they would say we have not touched the XBRL. Now the two are combined into one document, so the auditors in some respect have to say, ‘I audited this piece but not that piece of the same financial statement document,’ which is kind of odd to see. We’re watching that to see if there will ever be an audit requirement for XBRL tagging. Technically the legal liability for XBRL is the same as the legal liability for traditional paper-based financial statements that are issued.”

Review the article on Accounting Today's website.

The proposed amendments would prohibit deducting from the cost of an item of property, plant and equipment any proceeds from selling items produced before the asset is available for use. Instead, an entity would recognize the proceeds from selling such items, and the related production costs, in profit or loss.

Re­view the Ex­po­sure Draft on the AcSB's web­site.

The report argues that sus­tain­abil­ity needs to be put at the heart of the financial system and that to deliver systemic change, ESG factors and long-term sus­tain­abil­ity risks and op­por­tu­ni­ties will be needed in corporate gov­er­nance, core indices, accounting standards and credit ratings.

On accounting frame­works, the authors note: “While there are numerous ini­tia­tives on sus­tain­abil­ity reporting, the ultimate ambition has to be the con­ver­gence of financial and sus­tain­abil­ity in­for­ma­tion, supported by a more com­pre­hen­sive set of accounting standards. In­te­grated reporting supports this con­ver­gence qual­i­ta­tively through reporting that links sus­tain­abil­ity factors with firms’ strategy. Accounting standards can help advance the quan­ti­ta­tive element.”

The report is aimed at readers in Europe and beyond, who are concerned about issues of sus­tain­abil­ity, financial markets and the wider chal­lenges for society. It is intended to provide the basis for fruitful and con­struc­tive con­sul­ta­tions as the HLEG engages in the next phase of its work. The HLEG welcomes comments, questions and dis­cus­sions during the process of preparing its final report for pub­li­ca­tion in December 2017.

For further information, refer to the press release and the full report on the European Com­mis­sion website.

The exercise, which follows up on the first impact as­sess­ment published in November 2016, has confirmed the EBA's initial ob­ser­va­tions on the stage of prepa­ra­tion for the im­ple­men­ta­tion of IFRS 9 and the estimated impact of IFRS 9 on reg­u­la­tory own funds.

On the qual­i­ta­tive side, the report high­lights that banks have made further progress on the im­ple­men­ta­tion of IFRS 9 since the previous exercise, but smaller banks are still lagging behind in their prepa­ra­tion compared with larger banks. On the quan­ti­ta­tive side, the responses received show that the estimated impact of IFRS 9 is mainly driven by IFRS 9 im­pair­ment re­quire­ments. The estimated increase of pro­vi­sions is on average 13% compared to the current levels of pro­vi­sions under IAS 39.

The full report can be accessed on the EBA website.

The purpose of the ED, entitled Disclosure Framework for the Valuation of Financial Instruments is to provide a framework for the valuation professional when engaged or assigned to provide fair value and other measurements of financial instruments and components thereof. By design, the framework does not provide instructions on how to arrive at a valuation conclusion, but instead, the documents provide valuation professionals with guidance on the level of documentation and substantiation that is required when performing, reviewing or working with securities or financial instrument valuations.

Comments on the Exposure Draft are requested by September 27, 2017.

For more in­for­ma­tion, see summary on the AICPA’s website.

The review focused on four key topics, which included (1) fair value dis­clo­sures, (2) unit of account, (3) level of market activity and fair value, and (4) valuation ad­just­ments for de­riv­a­tives. The review found that the Standard has “generally been well in­cor­po­rated in the financial state­ments of the issuers in the sample.” However, the report noted that com­pli­ance and com­pa­ra­bil­ity in the ap­pli­ca­tion of IFRS 13 could improve.

The results of this review will con­tribute to the IASB’s post-im­ple­men­ta­tion review of IFRS 13.

For more in­for­ma­tion, see the press release and report on the ESMA’s Web site.

In addition to being used as a form of payment, digital currency also is held as an asset by businesses, which can sell the currency when its value goes up. The increased presence in the market indicates the need for consistent accounting guidance, the Digital Chamber of Commerce said.

Some financial professionals believe digital currency should be accounted for under Topic 305, Cash and Cash Equivalents; others say Topic 825, Financial Instruments, applies to electronic money; while others consider Topic 350, Intangible Assets, or, Topic 330, Inventory, the more appropriate accounting guidance.

The conflicting views — and lack of authoritative accounting guidance — leads to auditing questions, which can turn off investors, and, in turn, research and development.

This is similar to a position the Australian Accounting Standards Board took in December 2016 when it presented a paper to the IASB’s main advisory panel, the Accounting Standards Advisory Forum (ASAF), suggesting the international board investigate consistent accounting for digital currency.

The paper’s author, Henri Venter, director in Deloitte Australia’s National Accounting Technical Team, said the lack of clear guidance in international accounting standards meant digital currencies were accounted for either under IAS 2, Inventory , or IAS 38, Intangible Assets, but the measurement guidance in neither standard provides sufficient information to analysts and investors about the value of the electronic money.

Review the article on Thomson Reuters' website.

The consultative document is entitled Criteria for identifying simple, transparent and comparable short-term securitisations (the short-term STC criteria), which is available on the BCBS and IOSCO websites. The short-term STC criteria maintain and build on the principles in the Criteria for identifying simple, transparent and comparable securitisations issued by BCBS-IOSCO in July 2015. The criteria published today take account of the characteristics of asset-backed commercial paper (ABCP) conduits, such as (i) the short maturity of the commercial paper issued, (ii) the different forms of program structures and (iii) the existence of multiple forms of liquidity and credit support facilities.

The criteria aim to assist the financial industry in its development of simple, transparent and comparable short-term securitizations. They were designed to help the parties to such transactions to evaluate the risks of a particular securitization across similar products and to assist investors with their conduct of due diligence on securitizations.

The BCBS has concurrently issued a consultative document Capital treatment for simple, transparent and comparable short-term securitisations outlining how the short-term STC criteria could be incorporated into the regulatory capital framework for banks.

Re­view the press release on the IOSCO's web­site.

The consultation paper is entitled Recommendations of Liquidity Risk Management for Collective Investment Schemes, and builds on the guidance set out in IOSCO´s 2013 report Principles of Liquidity Risk Management for Collective Investment Schemes (CIS). It also addresses the structural vulnerabilities identified by the Financial Stability Board (FSB) regarding liquidity risk management in the asset management industry in its final recommendations published in January 2017. The FSB asked IOSCO to take forward the recommendations regarding the mismatch between fund investments and redemption terms for open-ended funds.

IOSCO´s consultation paper on the recommendations proposes revisions that supplement the 2013 liquidity report with additional recommendations and detailed guidance on several issues, including those highlighted in the FSB report. Topics covered in the consultation paper include disclosure to investors, the alignment between asset portfolio and redemption terms, availability and effectiveness of liquidity risk management tools and fund level stress testing. In addition, IOSCO includes additional recommendations on contingency planning and requests specific public comments on issues affecting exchange traded funds.

On the same date, IOSCO also published another paper, Open-ended Fund Liquidity and Risk Management – Good Practices and Issues for Consideration, that provides practical information, examples and good practices regarding open-ended fund liquidity risk management, to supplement its recommendations.

Re­view the press release on the IOSCO's web­site.

CSA staff are proposing to amend National Instrument 25-101 Designated Rating Organizations (NI 25-101) to reflect new European Union (EU) requirements for credit rating organizations, to ensure the EU continues to recognize the Canadian regime as “equivalent” for regulatory purposes after these new requirements go into effect on June 1, 2018. The proposed amendments would allow credit ratings of a Canadian office of a DRO to continue to be used for regulatory purposes in the EU.

To ensure that NI 25-101 continues to reflect the International Organization of Securities Commissions (IOSCO) Code of Conduct Fundamentals for Credit Rating Agencies (the Code), the proposed amendments also reflect new provisions in the March 2015 version of the Code..

Stakeholders are invited to submit their comments in writing by October 4, 2017.

For fur­ther de­tails re­fer to the press re­lease and the proposed changes.