The authors of the study found that companies still invested for the long term even after they were required to start reporting on a quarterly basis.

The new CFA Institute Research Foundation brief “Impact of Reporting Frequency on UK Public Companies” examines the time period between 2007, when UK regulators began requiring quarterly reports from companies, to 2014, when they dropped that requirement. They found several effects associated with the two different approaches to reporting frequency.

Effect of Requiring and Not Requiring Quarterly Reporting

• No difference in long-term investment activity
• Quarterly reports became more qualitative than quantitative
• More companies issued managerial guidance
• Analyst coverage increased

Policy Recommendations

• Going from quarterly to semi-annual reporting does not combat “short-termism”
• Quarterly reports should be streamlined and include relevant metrics

Review the article on the CFA Institute's website.

The We Mean Business coalition has released a statement and key recommendations to the G20 leaders expressing support for the recommendations of the TCFD.

Deloitte is among one of the companies that is committed to action, as part of the We Mean Business coalition.

Review the Statement and key recommendations on the We Mean Business coalition's website.

This move is one of a number of proposed measures designed to protect benefit security for members of defined benefit plans once the new funding framework, which will eliminate solvency funding for plans with a funded ratio of at least 85 per cent, is in place. The other measures include increasing the monthly pension amount guaranteed by the pension benefits guarantee fund in the event of employer insolvency and requiring increased disclosure to plan members regarding the funded status of their plan.

Review the press release on the Ontario government's website and an article on the Benefits Canada website.

Below is an analysis of all changes made to the work plan since the last update in April 2017.

Research projects

• no changes

Major projects

• Insurance contracts — Comprehensive project — removed from the work plan in line with the issuance of IFRS 17, Insurance Contracts yesterday

Nar­row-scope amend­ments

• a new project on long-term interests in associates and joint ventures has been split off from the Annual improvements 2015–2017 — final amendments to IAS 28 are expected within six months
• a new project vaguely called "Annual improvements (next cycle)" has been added to the agenda — an exposure draft is expected after six months

IFRS Taxonomy

• proposed taxonomy update on insurance contracts (published together with IFRS 17 yesterday) — a final updated is expected within six months

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

Scope

An entity shall apply IFRS 17, Insurance Contracts to:

• Insurance and reinsurance contracts that it issues;
• Reinsurance contracts it holds; and
• Investment contracts with discretionary participation features (“DPF”) it issues, provided it also issues insurance contracts.

Scope changes from IFRS 4

• The requirement, that in order to apply the insurance standard to investment contracts with DPF, an entity has to also issue insurance contracts.
• An option to apply IFRS 15, Revenue from Contracts with Customers to fixed-fee contracts, provided certain criteria are met.

Level of aggregation

IFRS 17 requires entities to identify portfolios of insurance contracts, which comprises contracts that are subject to similar risks and are managed together. Each portfolio of insurance contracts issued shall be divided into a minimum of three groups:

• A group of contracts that are onerous at initial recognition, if any;
• A group of contracts that at initial recognition have no significant possibility of becoming onerous subsequently, if any; and
• A group of the remaining contracts in the portfolio, if any.

An entity is not permitted to include contracts issued more than one year apart in the same group. Furthermore, if a portfolio would fall into different groups only because law or regulation constrains the entity's practical ability to set a different price or level of benefits for policyholders with different characteristics, the entity may include those contracts in the same group.

Overview of the new accounting model

The standard measures insurance contracts either under the general model or a simplified version of this called the Premium Allocation Approach. The general model is defined such that at initial recognition an entity shall measure a group of contracts at the total of (a) the amount of fulfillment cash flows (“FCF”), which comprise probability-weighted estimates of future cash flows, an adjustment to reflect the time value of money (“TVM”) and the financial risks associated with those future cash flows and a risk adjustment for non-financial risk; and (b) the contractual service margin (“CSM”).

On subsequent measurement, the carrying amount of a group of insurance contracts at the end of each reporting period shall be the sum of the liability for remaining coverage and the liability for incurred claims. The liability for remaining coverage comprises the FCF related to future services and the CSM of the group at that date. The liability for incurred claims is measured as the FCF related to past services allocated to the group at that date.

An entity may simplify the measurement of the liability for remaining coverage of a group of insurance contracts using the premium allocation approach on the condition that, at initial recognition, the entity reasonably expects that doing so would produce a reasonable approximation of the general model, or the coverage period of each contract in the group is one year or less.

Presentation in the statement of financial performance

An entity shall disaggregate the amounts recognized in the statement(s) of financial performance into an insurance service result, comprising insurance revenue and insurance service expenses, and insurance finance income or expenses. Income or expenses from reinsurance contracts held shall be presented separately from the expenses or income from insurance contracts issued.

An entity shall present in profit or loss revenue arising from the groups of insurance contracts issued, and insurance service expenses arising from a group of insurance contracts it issues, comprising incurred claims and other incurred insurance service expenses. Revenue and insurance service expenses shall exclude any investment components.

Effective date

IFRS 17 is effective for annual reporting periods beginning on or after January 1, 2021. Earlier application is permitted if both IFRS 15, Revenue from Contracts with Customers and IFRS 9, Financial Instruments have also been applied.

Transition

An entity shall apply the standard retrospectively unless impracticable, in which case entities have the option of using either the modified retrospective approach or the fair value approach.

At the date of initial application of the standard, those entities already applying IFRS 9 may retrospectively re-designate and reclassify financial assets held in respect of activities connected with contracts within the scope of the standard.

Additional information

IASB website

• Press release
• Project summary
• Feedback statement
• Fact sheet — IFRS 17 Insurance Contracts
• Effects analysis
• Access to the standard, the illustrative examples, and the basis for conclusions on eIFRS (eIFRS subscription required)
• Interview with Hans Hoogervorst introducing the standard
• Proposed update of the IFRS Taxonomy regarding IFRS 17 (comments to be received by September 18, 2017)
• Call for nominations for the Transition Resource Group for IFRS 17

Global IAS Plus website

• Summary of IFRS 17 Insurance Contracts
• IFRS in Focus newsletter summarising the new standard
• Infographic IFRS 17. Start early. Start small. Keep it simple.

Other updated information

• EFRAG endorsement status report

The world of insurance has always been a difficult one for financial reporting. People talked of patchwork quilts and of black boxes. No one could quite see the proper picture, and comparability was difficult. All this dated back to the dawn of time, or at least twenty years ago. Everything had been stitched together or grandfathered into what was IFRS 4. Now we have IFRS 17. And as from accounting periods starting from January 1, 2021 that is what the industry, and investors, will have to deal with. Insurers will put old practices aside and apply the same rules and so this should be an aid to comparability. Whereas the old system was most definitely an obstacle to comparability.

It will be a big change to implement. But early planning for what is to come will make life easier in the long-term. Rather like insurance.

Review the entire column on our Global IAS Plus website.

On October 3, 2016, the Government of Canada released “The pan-Canadian approach to pricing carbon pollution” – the benchmark  – outlining the criteria that carbon pricing systems implemented by provinces and territories need to meet. The goal of the benchmark is to ensure that carbon pollution pricing applies to a broad set of emission sources with increasing stringency over time in order to reduce GHG emissions at lowest cost to business and consumers and support innovation and clean growth.

The pan-Canadian approach to pricing carbon pollution provides jurisdictions the flexibility to implement either an explicit price-based system (a carbon tax such as the one in British Columbia, or a hybrid approach composed of a carbon levy and an output-based pricing system, such as in Alberta) or a cap-and-trade system (such as those in Quebec and Ontario).

The Pan-Canadian Framework includes a commitment for a review of the overall approach to pricing carbon by early 2022 to confirm the path forward. An interim report will also be completed in 2020, which will be reviewed and assessed by First Ministers. As an early deliverable, the review will assess approaches and best practices to address the competitiveness of emissions-intensive, trade-exposed sectors.

The federal government plans to introduce new legislation and regulations to implement a carbon pollution pricing system – the backstop – to be applied in jurisdictions that do not have carbon pricing systems that align with the benchmark.

All elements of the backstop will apply in a jurisdiction that does not have a carbon pricing system in place. The backstop will also supplement (or “top-up”) systems that do not fully meet the benchmark. For example, the backstop could expand the sources covered by provincial carbon pollution pricing or it could increase the stringency of the provincial carbon price.

As committed in the October 3, 2016 document Pan-Canadian Approach to Pricing Carbon Pollution, the federal system will return direct revenues from the carbon price to the jurisdiction of origin. The federal government is open to feedback on the best mechanism to achieve this.

Comments on the proposed federal option are welcome until June 30, 2017.

Review the press release and Discussion Paper on the Government of Canada's website and highlights of the discussion paper on Tory's website.

The web presentations will provide an overview of the new requirements and will allow participants to ask questions. Registration is required (on the IASB's website) for the May 18 web presentations:

• Session at 9 am (GMT)
• Session at 3 pm (GMT)

Review the press release on the IASB's website.

In the webcast, IASB Vice-Chair Sue Lloyd and Technical Director Kumar Dasgupta talk through key requirements of IFRS 9, Financial Instruments that are relevant when an entity determines the expected life of revolving facilities, such as credit cards and overdrafts, by considering its normal credit risk management actions.

View the webcast on the IASB’s website.

The GLASS research project is related to the recognition in the financial statements of high inflation effects before reaching hyperinflation, as IAS 29, Financial Reporting in Hyperinflationary Economies currently requires. As part of the research project, GLASS has prepared a questionnaire and would appreciate feedback.

Please be advised that the deadline for the completed questionnaire is May 31, 2017. It is available for download here. Completed questionnaires should be submitted to fperezcervantes@cinif.org.mx.