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IASB publishes proposed amendments to IFRS 3 to update a reference to the Conceptual Framework

May 30, 2019

On May 30, 2019, the International Accounting Standards Board (the Board) published an exposure draft "Reference to the Conceptual Framework (Proposed amendments to IFRS 3)" with three proposed amendments to IFRS 3 "Business Combinations" that would update an outdated reference in IFRS 3 without significantly changing its requirements. Comments are requested by September 27, 2019.



In March 2018, the IASB issued the 2018 Conceptual Framework and most references to the Framework included in IFRS Standards® were updated to the 2018 Framework at that time. However, paragraph 11 of IFRS 3, Business Combinations, which still refers to the 1989 Framework, was not updated as this could have caused conflicts for entities applying IFRS 3.

Potential conflicts occur as the definition of assets and liabilities in the 2018 Framework differ to those in the 1989 Framework potentially leading to day 2 gains or losses post-acquisition for some balances recognized.

The IASB has now identified three possible amendments to IFRS 3 that would update IFRS 3 without significantly changing its requirements.


Suggested changes

The changes proposed in ED/2019/3 Reference to the Conceptual Framework (Proposed amendments to IFRS 3):

  • update IFRS 3 so that it refers to the 2018 Conceptual Framework instead of the 1989 Framework;
  • add to IFRS 3 a requirement that, for transactions and other events within the scope of IAS 37 or IFRIC 21, an acquirer should apply IAS 37 or IFRIC 21 (instead of the Conceptual Framework) to identify the liabilities it has assumed in a business combination; and
  • add to IFRS 3 an explicit statement that an acquirer should not recognize contingent assets acquired in a business combination.

The exposure draft also notes alternative approaches considered by the Board as well as the Board's reasons for not choosing those.

Comments on the proposed changes are requested by September 27, 2019.


Effective date

The exposure draft does not contain a proposed effective date for the amendments as the intention is to decide on it after the exposure period. However, it is already clear that early application would be permitted if an entity also applies all other updated references (published together with the updated Conceptual Framework) at the same time or earlier.


Additional information


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Chief Accountant to leave SEC

May 30, 2019

On May 30, 2019, the SEC an­nounced that Wesley R. Bricker, the agency's Chief Ac­coun­tant, will leave the SEC in June. The current deputy chief ac­coun­tant, Sagar Teotia, will become the acting chief ac­coun­tant after Mr. Bricker’s de­par­ture.

Mr. Bricker was ap­pointed acting chief ac­coun­tant in the SEC's Office of the Chief Ac­coun­tant in July 2016. He was named to the po­si­tion per­ma­nently in No­vem­ber 2016.

Mr. Teotia was ap­pointed deputy chief ac­coun­tant in March 2017. He is a former partner at De­loitte & Touche LLP.

For more in­for­ma­tion, see the press re­leases on Mr. Bricker’s de­par­ture and Mr. Teotia’s ap­point­ment on the SEC's Web site.

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ESEF becomes European law

May 29, 2019

On May 29, 2019, the European Com­mis­sion announced that it has published a reg­u­la­tion requiring all listed companies across the European Union to submit their annual financial state­ments digitally as Inline XBRL documents effective January 1, 2020 onwards.

The new European Single Elec­tronic Format (ESEF) aims at improving ac­ces­si­bil­ity and at making the in­for­ma­tion much more user-friendly. The move will also fa­cil­i­tate the avail­abil­ity of key financial in­for­ma­tion in all EU official languages. In support of these new rules, the European Se­cu­ri­ties and Markets Authority (ESMA) has prepared an ESEF Reporting Manual and ESEF taxonomy files to help companies in their prepa­ra­tion. The new pro­vi­sions will be updated on a yearly basis to reflect possible updates to the International Financial Reporting Standards (IFRS) taxonomy, which aims to improve com­mu­ni­ca­tion between preparers and users of financial state­ments.

Please click for the following ad­di­tional in­for­ma­tion:

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TCFD Implementation Guide

May 23, 2019

In May 2019, the Sustainability Accounting Standards Board (SASB) and the Climate Disclosure Standards Board (CDSB) have jointly released the TCFD Implementation Guide, which offers an effective solution for organizations around the world, in all industries and sectors, drawing on both organizations’ well-established reporting frameworks to provide companies with how-to guidance.

The guide is intended to help companies to more effectively take the TCFD recommendations from principles to practice, to offer greater insight into the material climate-related financial risks and opportunities they face, equipping investors with reliable, comparable, decision-useful information, and enhancing the resilience and stability of global capital markets to drive sustainable, long-term economic development.

Review the guide on the SASB's website.

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PCAOB posts staff guidance: A deeper dive on the communication of CAMs

May 22, 2019

On May 22, 2019, the Public Company Accounting Oversight Board (PCAOB) released a staff guidance document, "A Deeper Dive on the Communication of CAMs", developed to support implementation of the new critical audit matter requirements.

This document was informed by discussions with auditors regarding their experiences conducting dry runs of CAMs with their audit clients, the staff’s review of methodologies submitted by 10 U.S. audit firms that collectively audit approximately 85% of large accelerated filers, and other outreach efforts.

Review the staff guidance on the PCAOB's website.


IASB publishes proposals for amendments under its annual improvements project (cycle 2018-2020)

May 21, 2019

On May 21, 2019, the International Accounting Standards Board (the Board) published an exposure draft ED/2019/2 "Annual Improvements to IFRS Standards 2018–2020". It contains proposed amendments to four International Financial Reporting Standards as result of the Board's annual improvements project. Comments are requested by August 20, 2019.

The Board uses the annual improvements process to make necessary, but non-urgent, amendments to IFRS Standards® that will not be included as part of another major project.

The ED proposes the following amendments:

Standard Subject of proposed amendment
IFRS 1, First-time Adoption of International Financial Reporting Standards Subsidiary as a first-time adopter. The proposed amendment would require a subsidiary that applies paragraph D16(a) of IFRS 1 to measure cumulative translation differences using the amounts reported by its parent, based on the parent’s date of transition to IFRS Standards.
IFRS 9, Financial Instruments Fees in the ‘10 per cent’ test for derecognition. The proposed amendment clarifies which fees an entity includes when it applies the ‘10 per cent’ test in paragraph B3.3.6 of IFRS 9 in assessing whether to derecognize a financial liability. Applying the proposed amendment, an entity would include only fees paid or received between the entity (the borrower) and the lender, including fees paid or received by either the entity or the lender on the other’s behalf.
IFRS 16, Leases Lease incentives. The proposed amendment to Illustrative Example 13 accompanying IFRS 16 would remove from the example the illustration of the reimbursement of leasehold improvements by the lessor. The proposed amendment would resolve any potential confusion regarding the treatment of lease incentives that might arise because of how lease incentives are illustrated in that example.
IAS 41, Agriculture Taxation in fair value measurements. The proposed amendment would remove the requirement in paragraph 22 of IAS 41 for entities to exclude taxation cash flows when measuring the fair value of a biological asset using a present value technique. The proposed amendment would ensure consistency with the requirements in IFRS 13.

In June 2018, the Board tentatively decided to also propose some amendments to IFRS 17, Insurance Contracts as part of its next cycle of annual improvements. However, these proposed amendments have now been moved the general project regarding proposed amendments to IFRS 17 that will see an exposure draft in June 2019.

ED/2019/2 Annual Improvements to IFRS Standards 2018–2020 does not contain proposed effective dates for the proposed amendments as the intention is to decide on these after the exposure period.

Review the following additional information:



Updated IASB work plan — Analysis

May 18, 2019

On May 18, 2019, the International Accounting Standards Board (the Board) updated its work plan following its May 2019 meeting.

Below is an analysis of all changes that were made to the work plan since our last analysis on April 12, 2019.

Standard-setting projects

  • Primary financial statements — at this month's meeting the IASB decided that the next consultation document will be an exposure draft, not a discussion paper; the timing remains unchanged (H2 2019)

Maintenance projects

Research projects

  • No changes

Other projects

  • Due Process Handbook Review — an exposure draft of proposed amendments was published on April 30, 2019; a first discussion of the feedback received is scheduled for Q4 2019

Known changes not reflected in the work plan update

The IASB has announced that it expects to publish an exposure draft Annual Improvements to IFRS Standards 2018–2020 on May 21, 2019. In the work plan the projects concerned are still noted as expecting an exposure draft in June 2019. The following projects are part of the annual improvements 2018-2020:

  • Fees in the ‘10 per cent’ Test for Derecognition (Amendments to IFRS 9)
  • Lease Incentives (Amendment to Illustrative Example 13 accompanying IFRS 16)
  • Subsidiary as a First-time Adopter (Amendments to IFRS 1)
  • Taxation in Fair Value Measurements (Amendments to IAS 41)

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

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    IASB issues podcast on IFRS 17 discussions

    May 17, 2019

    On May 17, 2019, the International Accounting Standards Board (the Board) released a podcast recorded by Darrel Scott, IASB member, and Andrea Pryde, technical staff, reporting on the discussion at the May 2019 meeting of the Board about IFRS 17, "Insurance Contracts".

    Listen to the 10-minute podcast on the Board's website.

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    Nasdaq launches global environmental, social and governance reporting guide for companies

    May 15, 2019

    On May 15, 2019, the United Nation's Sustainable Stock Exchanges (SSE) launched of its new global ESG reporting guide for public and private companies.

    The 2019 ESG Reporting Guide 2.0 includes the latest third-party reporting methodologies widely adopted by the industry, and aims to help companies navigate the evolving standards on ESG data disclosure, regardless of geography or market capitalization.

    Review the press release on the SSE's website.

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    Webcast on research and the comparability of financial reporting

    May 14, 2019

    On May 14, 2019, the International Accounting Standards Board (the Board) released a webcast featuring Board member Ann Tarca discussing the results of research into the comparability of companies reporting using IFRS Standards.

    Professor Tarca's 24 minute webcast discusses:

    • definition and importance of comparability;
    • research evidence in four research areas:
      • Policy choice;
      • Measuring compliance;
      • Comparing numbers derived in accounting systems; and
      • Comparability and market outcomes;
    • tools the IFRS Foundation uses to promote comparability; and
    • the Board's achievements and challenges.

    Listen to the webcast on the Board's website.

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