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News

IAASB - Assurance Image

The future of international standard setting

Oct 21, 2019

On October 21, 2019, the International Auditing and Assurance Standards Board (IAASB) published a speech by Tom Seidenstein IAASB Chair to the Institute of Chartered Accountants of England and Wales’s Audit Conference.

In his speech, Mr. Seidenstein expresses that he firmly believes that auditors must play a critical role in ensuring trust in markets. He worries that trust is eroding in these institutions and in the way the economy works. It is his belief that that the IAASB, in conjunction with their many stakeholders, can and must play a role in enhancing and possibly restoring trust where it has eroded.

Review the full speech on the IAASB's website.

G7 Image

Investigating the impact of global stablecoins

Oct 18, 2019

On October 18, 2019, the Bank for International Settlements (BIS) released a report by the G7 Working Group on Stablecoins on how recently a number of stablecoin initiatives have emerged, some sponsored by large technology or financial firms.

Stablecoins, which have many of the features of earlier cryptocurrencies but seek to stabilize the price of the "coin" by linking its value to that of a pool of assets, have the potential to contribute to the development of more efficient global payment arrangements.

The report lays out initial recommendations for both private sector stablecoin developers and public sector authorities to address the challenges and risks. Finally, the report suggests that authorities could develop road maps for improving the efficiency and lowering the cost of payments and financial services.

Review the press release and report on the BIS' website.

IAASB - Assurance Image

Focus on professional skepticism

Oct 18, 2019

On October 18, 2019, the International Auditing and Assurance Standards Board (IAASB) published its third update to stakeholders highlighting the IAASB’s efforts to appropriately reflect professional skepticism in its standards.

Review the update on the IAASB's website.

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

FASB approves proposed effective date delays

Oct 16, 2019

On October 16, 2019, the Financial Accounting Standards Board (FASB) approved its August 2019 proposal to grant private companies, not-for-profit organizations, and certain small public companies various effective date delays on its credit losses (CECL), leases, and hedging standards.

At this meeting, the FASB discussed (1) the effective dates of its standards on credit losses, hedging, leases, and insurance for private companies, not-for-profit organizations, and small public companies and (2) multiple-layer hedging.

Effective-date considerations

The Board affirmed its decision to stagger effective dates for major standards and to amend the effective dates of its standards on credit losses, hedging, leases, and insurance to give implementation relief to certain types of entities. The Board directed its staff to draft a final Accounting Standards Update (ASU) for a vote by written ballot.

Review the press release and tentative Board decisions on the FASB’s website and Deloitte's related journal entry.

Hedging — last-of-layer method

The Board discussed multiple-layer and fair value hedge basis adjustment issues and directed its staff to draft a proposed ASU for external review.

Review the tentative Board decisions on the FASB’s website and Deloitte's related journal entry.

IFRS - IASB Image

IFRS Foundation publishes proposed IFRS Taxonomy update

Oct 14, 2019

On October 14, 2019, the IFRS Foundation published "IFRS Taxonomy 2019 — Interest Rate Benchmark Reform (Amendments to IFRS 9, IAS 39 and IFRS 7)". Comments are requested by December 13, 2019.

The proposed update includes elements to reflect the new disclosure requirements introduced by the amendments to IFRS 9, IAS 39 and IFRS 7, issued by the Board on September 26, 2019.

Review the press release and proposed update on the IASB’s website.

FRC (United Kingdom Financial Reporting Council) Image

FRC publishes thematic review findings of IFRS 9, IFRS 15, and IAS 36 company disclosures

Oct 10, 2019

On October 10, 2019, the UK Financial Reporting Council (FRC) published three thematic reviews to help companies improve the quality of their corporate reporting in relation to IFRS 9 "Financial Instruments", IFRS 15 "Revenue from Contracts with Customers" and the impairment of non-financial assets.

The reports analyze the disclosures in a sample of companies’ reports and provide examples of better practice.

The FRC concluded that IFRS 15 disclosures could be improved especially with respect to

  • improving the descriptions of accounting policies and ensuring that these are tailored to their own particular circumstances; and
  • providing more detailed information about the judgements significantly affecting the amount and timing of revenue.

In connection with IFRS 9 the FRC found that there was still room for companies to improve disclosures by

  • analysing the credit quality of trade receivables by non-banking companies; and
  • providing details of the indicators of a significant increase in credit risk particularly by the smaller banks.

As regards IAS 36 and the impairment of non-financial assets, the FRC encourage companies to pay greater attention to:

  • providing relevant information around significant judgements and key assumptions made in estimating the recoverable amount of assets and cash-generating units;
  • explaining the sensitivity to changes in key assumptions, where reasonably possible changes could give rise to impairment of goodwill or material further adjustments to already-impaired assets. 

Review the following additional information on the FRC's website:

 

United States Image

How engaged is your team, really?

Oct 09, 2019

On October 9, 2019, the Harvard Business Review published an article on how a recent global study of engagement from the ADP Research Institute found that if employees consider themselves part of a team (or even better, part of more than one team), they are twice as likely to feel engaged in their work.

Knowing that engagement is tied to teams is critical for leaders looking to increase their output, since engagement is a known driver of productivity.

Leaders should look for these three signs:

  • Lack of teamwork
  • Playing the system
  • Only managing up

Review the full article on the Harvard Business Review's website.

OECD (Organisation for Economic Co-operation and Development) Image

Proposal issued for unified approach to certain tax challenges of digitalization

Oct 09, 2019

On October 9, 2019, the Organisation for Economic Co-operation (OECD) released a proposal that seeks to harmonize aspects of three initial proposals to develop a possible new approach to address the nexus and profit allocation challenges arising from digitalization.

As part of the ongoing work of the G20/OECD Inclusive Framework on Base Erosion and Profit Shifting ("Inclusive Framework"), the OECD released a public consultation document containing a Secretariat Proposal for a "Unified Approach" under Pillar One. This follows on from the program of work issued on May 31, 2019, and seeks to harmonize aspects of the three initial proposals around user participation, marketing intangibles and significant economic presence in order to develop a possible new approach. It does not, at this stage, have consensus political support from the more than 130 governments participating in the Inclusive Framework.

Review a summary on Deloitte Tax's website.

IESBA (International Ethics Standards Board for Accountants) (lt gray) Image

IESBA Meeting Highlights September 16-19, 2019

Oct 08, 2019

On October 8, 2019, the International Ethics Standards Board for Accountants (IESBA) released the highlights of its September 16-19, 2019 meeting.

Discussion points included:

  • Highlights & Key Developments
  • Alignment of Part 4B with ISAE 3000
  • Non-Assurance Services
  • Fees
  • Technology

Review the highlights and the podcast on the IESBA's website.

United States Image

Caremark duties include duty not only to establish oversight processes but also to monitor them

Oct 07, 2019

On October 7, 2019, the D&O diary published an article on the October 1, 2019 decision in the Clovis Oncology Derivative Litigation. In the decision, the Delaware Chancery Court provided further perspective on directors’ potential liability for breaches of the duty of oversight.

Boards not only must be able to show that they have made good faith efforts to implement an oversight system, but that also that they monitor the system – particularly when a company operates in a highly regulated industry.

Review the full article on the D&O diary's website.

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