The SEC received over 276 non-form comment letters in response to the Concept Release, with a strong showing of support for improved disclosure of sustainability-related information in SEC filings. Two-thirds of comment letters address sustainability-related concerns. Most of these letters support improved sustainability-related disclosures in SEC filings; for many commenters this was the only matter of concern.

In addition to climate change, sustainability-related areas of interest noted in comments to the SEC include a vast array of issues, including but not limited to: land tenure rights; water (access to, stewardship of); political spending and lobbying; gender pay equity; diversity; human rights; human capital management; international tax payments; sustainable palm oil; forestry, and; supply chain management.

The report is available on the SASB's Website.

The amendments in Applying IFRS 9 "Financial Instruments" with IFRS 4 "Insurance Contracts" (Amendments to IFRS 4) provide two options for entities that issue insurance contracts within the scope of IFRS 4:

• an option that permits entities to reclassify, from profit or loss to other comprehensive income, some of the income or expenses arising from designated financial assets; this is the so-called overlay approach;
• an optional temporary exemption from applying IFRS 9 for entities whose predominant activity is issuing contracts within the scope of IFRS 4; this is the so-called deferral approach.

The application of both approaches is optional and an entity is permitted to stop applying them before the new insurance contracts standard is applied.

An entity would apply the overlay approach retrospectively to qualifying financial assets when it first applies IFRS 9. The application of the overlay approach requires disclosure of sufficient information to enable users of financial statements to understand how the amount reclassified in the reporting period is calculated and the effect of that reclassification on the financial statements.

An entity would apply the deferral approach for annual periods beginning on or after January 1, 2018. The application of the deferral approach needs to be disclosed together with information that enables users of financial statements to understand how the insurer qualified for the temporary exemption and to compare insurers applying the temporary exemption with entities applying IFRS 9. The deferral can only be use for the three years following January 1, 2018.

Read further:

• IASB press release (IASB's Web site)
• Project summary and feedback statement (IASB's Web site)

Here are some excerpts from his remarks:

"We finished our deliberations recently and our staff are very busy drafting the Standard.

We have been working on the new insurance Standard for many years and its publication will not come a day too soon. Our current insurance Standard, IFRS 4, is a holding standard which has grandfathered an array of highly diverse national accounting standards. As a result, there is little comparability between insurance companies around the world.

Moreover, there is variety in the measurement of the insurance liability. Some insurers use discount rates that are based on the expected return of assets, others use risk-free discount rates; others still use historical rates based on interest rates at the date of inception.

As a result, the devastating impact of the current low-interest-rate environment on long-term obligations is not nearly as visible in the insurance industry as it is in the defined benefit pension schemes of many companies. Clearly, discounting an insurance liability that was incurred 15 years ago at a historical interest rate of 5-6 per cent does not give relevant information in a time when interest rates are close to—or even below—zero.

In some cases, minimum-return guarantees and other complex features are typically reflected in the insurance liability only when they become worth exercising and even then typically only at an amount that does not reflect their true economic value. For a bank, such treatment of complex financial liabilities would be unthinkable.

As a result, there is not only a lack of comparability among insurance companies, but there is also a great lack of comparability between insurance and other parts of the financial industry, such as banks."

Please click to access the full text of Mr. Hooger­vorst's speech on the IASB's Web site.

The proposed ASU and IFRS 9 provide similar methodologies for measuring the hedged item in a partial-term fair value hedge of interest rate risk. The proposed update would allow qualitative assessments of hedge effectiveness if certain conditions are met, while IFRS 9 allows for either quantitative or qualitative assessment of hedge effectiveness.

However, there are some differences between FASB’s proposed ASU and IFRS 9 pertaining to the presentation of changes in the fair value of hedging instruments. FASB’s proposed amendments would eliminate the concept of hedge ineffectiveness, while IFRS 9 retains that concept. FASB’s proposed changes would require an institution to record the entire change in the fair value of the hedging instrument in the same income statement line item as the earnings effect of the hedged item, while IFRS 9 does not provide broad guidance on presentation.

FASB plans to decide on an effective date for the update after redeliberates about all the comments gets during the comment period and from the public roundtable meetings. Early application of the proposed amendments would be allowed at the beginning of any fiscal year before the effective date.

In the paper, the ASBJ argues two points:

• As long as the statement of profit or loss is the primary source of information about an entity’s financial performance, the Conceptual Framework should, at a minimum, describe the fundamental characteristics that information about profit or loss should possess.
• In order to calculate profit or loss that is useful, the measurement basis should be selected appropriately from the perspective of the statement of financial position and from the perspective or the statement(s) of financial performance, respectively. If the measurement basis differ, the difference in the changes in the measurements should be included in OCI.

Please click for access to the full paper on the ASBJ's Web site.

The webcast, which was hosted by Mary Tokar, IASB Board Member, and Michael Stewart, Technical Director, provides an overview of the proposals, including the two proposed assessment models.

For more information, view the webcast on the IASB’s website.

The topics discussed at the meeting included:

• IASB and Interpretations Committee Update: Members discussed the support of consistent application of IFRSs and the agenda consultation.
• Materiality: Members discussed a proposed ‘four-step approach’ for making materiality judgements when preparing a financial report:
  • Step 1 — identifying the primary users and their information needs;
  • Step 2 — making a materiality judgement, considering quantitative factors as well as qualitative entity-specific and environmental factors;
  • Step 3 — organising material information within the financial report; and
  • Step 4 — stepping back and reviewing the financial report as a whole.
• Statement of Cash Flows: Topics discussed were the classification of cash flows (positively defining cash flows from operating activities, presenting cash outflows for acquiring property, plant and equipment as cash flows from operating activities, presentation of cash flows related to financing liabilities, cash received from customers and presentation of cash flows related to tax), cash equivalents and the management of liquid resources, reconciliation of operating activities, and direct or indirect method.
• Primary Financial Statements: Members discussed the structure and content of the statement of profit or loss and OCI as regards line items and subtotals as well as alternative performance measures, the structure and content of the statement of financial position, and the interaction between items reported in different primary financial statements,
• Financial instruments with characteristics of equity: Focus of the discussion were shares redeemable at fair value and cumulative preference shares.

Review the full meeting summary on the IASB's website.

The framework A professional judgement framework for financial reporting decision making - An international guide for preparers, auditors, audit committees, regulators and standard setters across business and not-for-profit sectors identifies core principles and provides a structured process to guide decision makers through how to make, assess and document significant judgements. It targets significant judgements across narrative and financial reporting including accounting treatment, materiality and disclosures.

The framework is designed to fit within the context provided by applicable accounting standards. It also provides a useful training guide for students or those new to decision making.

Access the framework and a corresponding press release on the ICAS' Web site.

Held at Microsoft's headquarters in New York City, the event marks the first meeting between blockchain specialists from Deloitte, Ernst & Young, KPMG and PwC. According to ConsenSys head of blockchain accounting, Griffin Anderson, the series of roundtable discussions will center on how the accounting industry could work together to develop new blockchain standards.

While organizers say the accounting consortium effort is in its early stages, the concept itself has proven to be a popular way for established players to work with the potentially disruptive technology.

Review the full article.

The pro­posed amend­ments pro­vide:

• clearer ap­pli­ca­tion guid­ance to help dis­tin­guish be­tween a busi­ness and a group of as­sets when ap­ply­ing IFRS 3; and
• clar­i­fi­ca­tion on how a com­pany should ac­count for pre­vi­ously held in­ter­est in a busi­ness, if ac­quir­ing con­trol, or joint con­trol, of that busi­ness.

The pro­posed amended ap­pli­ca­tion guid­ance on the de­f­i­n­i­tion of a busi­ness in IFRS 3 arises from the Board’s Post-im­ple­men­ta­tion Re­view (PIR) process, which is con­ducted on each Stan­dard and ma­jor amend­ment ap­prox­i­mately two years af­ter their ef­fec­tive dates. The IFRS 3 PIR shows gen­eral sup­port for the ac­count­ing re­quire­ments in the Stan­dard but iden­ti­fies some ar­eas where fur­ther re­search will be un­der­taken. The pro­posed amend­ment to ac­count­ing for pre­vi­ously held in­ter­ests was de­vel­oped through the IFRS In­ter­pre­ta­tions Com­mit­tee.

Ad­di­tional in­for­ma­tion

Please click for:

• Ac­cess to the ex­po­sure draft on the AcSB web­site
• Our pro­ject page on IFRS 3 — De­f­i­n­i­tion of a busi­ness
• Our pro­ject page on IFRS 3/IFRS 11 — Re­mea­sure­ment of pre­vi­ously held in­ter­ests