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News

IFRS - IASB Image

IASB posts webinar on IFRS 9 after IFRS Interpretations Committee discussion

Jul 22, 2019

On July 22, 2019, the International Accounting Standards Board (IASB) posted to its website a webinar summarizing the IFRS Interpretations Committee's recent discussions on how a company should present amounts in its statement of profit or loss if a credit-impaired financial asset is subsequently paid in full or no longer credit-impaired (cured).

The webinar is hosted by IASB technical staff members Angie Ah Kun and Elizabeth Figgie. They discuss the March 2019 meeting of the IFRS Interpretations Committee and walk through the relevant requirements in IFRS 9 for amortized cost measurement and impairment.

Review the press release and webinar on the IASB’s website.

IFRS - IASB Image

IFRS Foundation developing a stakeholder engagement register

Jul 22, 2019

On July 22, 2019, the IFRS Foundation announced that it will publish a register to provide a public record of IASB members’ engagement with stakeholders. The register will be published quarterly, beginning December 2019.

The register is being created to increase transparency and "continue demonstrating the Board’s independence and accountability and is also in line with stakeholder feedback." The register will include speaking engagements and face-to-face, web-based or phone meetings of more than 30 minutes duration. IASB members will record the date, the name of the relevant stakeholder organization, and location and purpose of each engagement.

This development can be traced back, among other things, to demands made by the European Commission in its annual report on the activities of the IFRS Foundation, EFRAG and PIOB in 2017, which was published in October 2018. The Commission had observed:

When members of the IFRS Foundation meet with stakeholders outside the framework of the Due Process Handbook, no formal record is kept.

The Commission had noted that it would take action in this regard:

The Commission will engage with the beneficiaries in 2018 in order to ensure (even) higher standards of transparency, in particular with regard to the establishement of mandatory transparency registers on meetings with external stakeholders.

As the Commission has made similar comments when reporting on the activities of EFRAG, it is likely that EFRAG will also present a transparency register in the near future.

Review the Commission report on the European Commission's website and press release on the IASB's website.

Canada Image

New CBCA diversity disclosure requirements confirmed

Jul 22, 2019

On July 22, 2019, Norton Rose Fullbright LLP released a summary of the regulations supporting the amendments to the Canada Business Corporations Act (CBCA) related to diversity disclosure. The amendments will require publicly-listed CBCA corporations to provide certain information on board and executive officer diversity policies and statistics beginning in 2020.

Although the CBCA was amended on May 1, 2018 to require publicly-listed CBCA corporations to include diversity disclosure in their annual shareholder meeting notice or proxy circular, the amendments were not brought into force until the regulations supporting the changes could be finalized. These regulations have now been published and come into force on January 1, 2020. Accordingly, the following requirements apply for the 2020 shareholder meetings of publicly-listed CBCA corporations. Of particular note, the amendments expand the existing Canadian securities law requirements on diversity disclosure to broaden the meaning of diversity beyond gender and to apply to all CBCA reporting issuers, including issuers listed on the Toronto Stock Exchange (TSX), TSX Venture Exchange (TSXV) and Canadian Securities Exchange (CSE).

Review the following resources:

IFRS - IASB Image

IASB publishes proposed amendments to IAS 12

Jul 17, 2019

On July 17, 2019, the International Accounting Standards Board (IASB) published an exposure draft "Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Proposed amendments to IAS 12)" that aim at clarifying how companies account for deferred tax on leases and decommissioning obligations. Comments are requested by November 14, 2019.

 

Background

The IFRS Interpretations Committee received a submission about IAS 12, Income Taxes and the recognition of deferred tax in relation to leases (when a lessee recognizes an asset and a liability at the lease commencement) and decommissioning obligations (when an entity recognizes a liability and includes the decommissioning costs in the cost of the item of of property, plant and equipment). The submitted fact pattern assumed that lease payments and decommissioning costs were deductible for tax purposes when paid and identified different approaches in practice.

The Committee discussed the submission at its meetings in March 2018 and June 2018 and came to the conclusion that the matter was relevant and widespread, as there are various kinds of contracts and fact patterns affected. Moreover, the question as to whether tax deductions are attributable to a contract, a (single) asset/liability, or rather to cash flows, and as to which consequences this may have for determining temporary differences, is fundamental within IAS 12. Therefore, the Committee recommended that the IASB develop clarifying amendments to IAS 12.

The IASB discussed the issue in October 2018 (general discussion of the issue and agreement with the IFRS Interpretations Committee's recommendation) and January 2019 (transition, retrospective application, and early application) and has now published an exposure draft of proposed clarifying amendments.

 

Suggested changes

The main change proposed in ED/2019/5 Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Proposed amendments to IAS 12) is a proposed exemption from the initial recognition exemption provided in IAS 12.15(b) and IAS 12.24. Accordingly, the initial recognition exemption would not apply to transactions in which both deductible and taxable temporary differences arise on initial recognition that result in the recognition of deferred tax assets and liabilities of the same amount. This is also explained in the newly inserted paragraph IAS 12.22A.

    Comments on the proposed changes are requested by November 14, 2019.

     

    Effective date and transition

    The exposure draft does not contain a proposed effective date as the IASB intends to decide on this after exposure. The proposed amendments would be applied retrospectively in accordance with IAS 8 and early adoption would be permitted.

    For practical and cost reasons, some simplification is provided for the assessment of the probability that a taxable profit will be available against which the deductible temporary difference can be utilized. A similar simplification is proposed for first-time adopters.

     

    Additional information

     

    IFRS - AcSB Image

    AcSB Exposure Draft – Amendments to IFRS 17

    Jul 17, 2019

    On July 17, 2019, the Accounting Standards Board (AcSB) issued its Exposure Draft that corresponds to the IASB’s Exposure Draft on this topic. Comments are requested by September 25, 2019.

    The AcSB would like input from Canadian respondents on the following additional question regarding the proposed amendments:

    The IASB has developed the proposed amendments in accordance with its due process for application around the world. Assuming the Exposure Draft proposals are finalized and approved by the IASB in accordance with its due process, do you think that the proposals are appropriate for application in Canada? If not, please specify which aspects of the proposals, and what circumstances, make the accounting requirements proposed in the Exposure Draft inappropriate.

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

    FASB (US Financial Accounting Standards Board) (lt blue) Image

    FASB staff issues Q&As on expected credit losses

    Jul 17, 2019

    On July 17, 2019, the Financial Accounting Standards Board (FASB) issued a Q&A document, “Topic 326, No. 2: Developing an Estimate of Expected Credit Losses on Financial Assets.”

    The Q&As address the following topics:

    • “Use of historical loss information.”
    • “Making reasonable and supportable forecasts.”
    • “The reversion to historical loss information.”

    Review the press release and Q&A document on the FASB’s website.

    IFRS - IASB Image

    Extractive Activities — AcSB Staff's Research Update

    Jul 17, 2019

    On July 17, 2019, the Accounting Standards Board (AcSB) published a revised In Brief that features additional context from the Research Update provided to the IASB.

    The In Brief provides an overview of the results of the AcSB staff’s research findings, stakeholder views, and suggestions on additional areas for the IASB to consider as it starts research on extractive activities.

    Review the press release and overview on the AcSB's website.

    FRC (United Kingdom Financial Reporting Council) Image

    FRC consults on enhanced ethical and auditing standards

    Jul 15, 2019

    On July 15, 2019, the Financial Reporting Council (FRC) issued a consultation proposing important changes to the UK’s Ethical and Auditing Standards. The FRC proposes to set more stringent ethical rules for auditors, in response to findings from recent audit enforcement cases and from audit inspections. Comments are request by September 27, 2019.

    In response to feedback from investors, the FRC also proposes to enhance the quality and content of auditor’s reports in order to improve transparency about what is found in the course of an audit.

    Key changes proposed include:

    • A clearer and stronger ‘objective, reasonable and informed third party test’ which requires audit firms to consider whether a proposed action would affect their independence from the perspective of public interest stakeholders rather than another auditor.
    • Enhancing the authority of the Ethics Partner function within audit firms, in order to ensure firm wide focus on ethical matters and the public interest, and to require reporting to those charged with governance where an audit firm does not follow the Ethics Partner’s advice.
    • The list of prohibited non-audit services that auditors of Public Interest Entities (PIEs) can provide to audited bodies has been replaced with a much shorter list of permitted services, all of which are ‘closely related’ to an audit or required by law and/or regulation. No other services can be provided.
    • The requirement for the auditors of all UK listed entities to include in their published auditor’s reports the performance materiality threshold used in the audit.

    Review the press release and consultation paper on the FRC's website.

    IFRS - AcSB Image

    AcSB and OIC hold joint meeting

    Jul 15, 2019

    On July 15, 2019, the Canadian Accounting Standards Board (AcSB) and the Italian standard-setter Organismo Italiano di Contabilità (OIC) held a joint meeting in Rome. The meeting was the second bilateral meeting between the two standard-setters.

    In addition to giving updates on their respective standard-setting activities at the meeting, the two boards exchanged views on the IASB’s current project on proposed amendments to IFRS 17 and on rate-regulated activities. In addition, the AcSB and the OIC discussed implementation activities regarding IFRS 16 Leases.

    Review the press release on the OIC's website.

    US_SEC Image

    Statement on LIBOR transition

    Jul 12, 2019

    On July 12, 2019, the Securities and Exchange Commission (SEC) published a statement by the staffs of the Divisions of Corporation Finance, Investment Management, and Trading and Markets, and the Office of the Chief Accountant on managing the transition from LIBOR.

    The statement covers:

    • Alternative reference rates
    • Managing the transition from LIBOR
    • Division specific guidance

    Review the full statement on the SEC's website.

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