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News

IFRS - GPF Image
IFRS - Meeting Image

Summary of the November 2016 GPF meeting

Jan 20, 2017

On January 20, 2017, the International Accounting Standards Board (IASB) posted the minutes of the meeting of the Global Preparers Forum (GPF) with representatives of the IASB held in London on Tuesday, November 29, 2016.

The topics discussed at the meeting included:

  • IASB and Interpretations Committee Update
  • Post-implementation Review of IFRS 13, Fair Value Measurement
  • Education Initiative commercial publications
  • Definition of a business

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

IFRS - IASB Image

Updated IASB work plan — Analysis

Jan 19, 2017

On January 19, 2017, following its January 2017 meeting, the International Accounting Standards Board (IASB) updated its work plan. In particular, the new standard on insurance (IFRS 17) is now expected in May and no longer in March since the fatal flaw review revealed some small issues that the staff wants to lay before the Board before finalizing the draft. Also, following yesterday's decision to take a project on IFRS 9 and prepayment options onto the agenda, the IASB now announces that it expects to publish an exposure draft on the issue in April.

Below is an analysis of all changes made to the work plan since the last update in December 2016.

Research projects

Standard-setting and related projects

  • Disclosure initiative: Materiality (practice statement) — the expected publication of the practice statement has moved forward and is now given as "within 6 months".
  • Insurance contracts — the expected issuance of the IFRS has been delayed to May since the fatal flaw review revealed some small issues that the staff wants to lay before the Board before finalizing the draft.

Nar­row-scope amend­ments

  • Improvements to IFRS 8 resulting from the post-implementation review of IFRS 8 — the expected publication of an exposure draft is now expected in April.
  • Symmetric prepayment options — following yesterday's decision to take a related project onto the agenda, the IASB now announces that it expects to publish an exposure draft on the issue in April.
  • Annual improvements to IFRSs 2015-2017 — following the publication of an exposure draft of proposed amendments earlier this month, the project is now marked as being in consultation phase with a decision on the project direction expected "within 6 months".

Post-implementation reviews

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

IFRS - IASB Image

IASB decides on project on limited IFRS 9 amendments

Jan 18, 2017

On January 18, 2017, the International Accounting Standards Board (IASB) voted to add a limited scope project on IFRS 9 "Financial Instruments" to its agenda.

The project will look into whether a narrow-scope exception could be made to allow instruments with symmetric prepayment options to qualify for amortized cost or fair value through other comprehensive income measurement because they would otherwise fail the SPPI condition.

Review a summary of the agenda paper released by our Global firm.

IFRS - IASB Image

Putting IFRS 16 into practice, practical implementation advices from IASB

Jan 13, 2017

In January 2017, the International Accounting Standards Board (IASB) published an article featuring four IASB members discussing the messages they have heard from stakeholders about IFRS 16 implementation over the last year and advice to companies implementing the new standard.

  • IASB Vice-Chair Sue Lloyd discusses transition options and benefits;
  • IASB Member Gary Kabureck explains early planning and practical steps;
  • IASB Member Darrel Scott expands on judgements and discount rates; and
  • IASB Member Stephen Cooper examines investor expectations and lease disclosures between now and 2019.

Review the article on the IASB's website.

IFRS - IASB Image

IASB publishes proposals for amendments under its annual improvements project (cycle 2015-2017)

Jan 12, 2017

On January 12, 2017, the International Accounting Standards Board (IASB) published an exposure draft "Annual Improvements to IFRS Standards 2015–2017 Cycle". It contains proposed amendments to three International Financial Reporting Standards (IFRSs) as result of the IASB's annual improvements project. Comments are requested by April 12, 2017.

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

The ED proposes the following amendments:

Standard Subject of proposed amendment
IAS 12 Income Taxes

To clarify that the requirements in the existing paragraph 52B (to recognise the income tax consequences of dividends where the transactions or events that generated distributable profits are recognised) apply to all income tax consequences of dividends by moving the paragraph away from existing paragraph 52A that only deals with situations where there are different tax rates for distributed and undistributed profits

IAS 23 Borrowing Costs

To clarify that when an asset is ready for its intended use or sale, an entity treats any outstanding borrowing made specifically to obtain that asset as part of the funds that it has borrowed generally

IAS 28 Investments in Associates and Joint Ventures

To clarify that an entity applies IFRS 9 Financial Instruments to long-term interests in an associate or joint venture that form part of the net investment in the associate or joint venture but to which the equity method is not applied

ED/2017/1 Annual Improvements to IFRS Standards 2015–2017 Cycle does not contain proposed effective dates for the proposed amendments to IAS 12 and IAS 23 as the intention is to decide on these after the exposure period. However, it is proposed that the amendments to IAS 28 should be effective for annual periods beginning on or after January 1, 2018 to align their effective date with the effective date of IFRS 9.

As for the proposed amendments to IAS 28, the ED contains a dissenting opinion as one Board member disagrees amending IAS 28 as proposed without also specifying the types of interests that an entity accounts for using the equity method and the types of interests that an entity accounts for applying IFRS 9.

Review the following additional information:

IFRS - IASB Image

Canadian academic Tom Scott appointed to the IASB

Jan 11, 2017

On January 11, 2017, the IFRS Foundation Trustees announced the appointment of Tom Scott to serve as a member of the International Accounting Standards Board (IASB). Mr. Scott will join the IASB in April 2017 for an initial term 5-year term.

Mr. Scott has been an academic in the field of accounting at various universities in Canada since the late 1970s. Most recently, he acted as a Director and Professor of Accounting at the School of Accounting and Finance, University of Waterloo, Canada. He also served as a member of the Canadian Accounting Standards Board from 2003 to 2011.

Review the announcement on the IASB's website.

IFRS - IASB Image

IASB posts update on insurance webinars

Jan 10, 2017

On January 10, 2017, the International Accounting Standards Board (IASB) released a webinar that provides an updated overview of the forthcoming insurance contracts Standard reflecting decisions made in November.

In April and May 2016, the IASB posted a series of eight webinars on the forthcoming Standard.

The new webinar covers:

  • The need for change and the history of the project
  • Level of aggregation
  • Applying the Standard for the first time

Please click to access the update, as well as all previous webinars, on the IASB's website.

US_AICPA Image

AICPA issues additional revenue working drafts

Jan 06, 2017

In January 2017, the American Institute of Certified Public Accountants’s (AICPA) Revenue Recognition Task Force released for public comment four working drafts on accounting issues associated with the implementation of the new revenue standard for the following industries: aerospace and defense, telecommunications, and time shares.

The aerospace and defense working draft provides guidance on contract modifications, the working draft for time-share entities discusses performance obligations, and the two working drafts for the telecommunications industry address (1) separate performance obligations and (2) stand-alone selling prices. Comments on the working drafts are due by March 1, 2017.

For more information, see the aerospace and defense, telecommunications, and time-share Revenue Recognition Task Force pages on the AICPA’s Web site.

US_FASB Image

FASB clarifies the definition of a business

Jan 05, 2017

On January 5, 2017, the US Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2017-01, "Clarifying the Definition of a Business", which provides guidance on evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses.

The ASU amends ASC 805 to “provide a more robust framework to use in determining when a set of assets and activities is a business.” In addition, the amendments “provide more consistency in applying the guidance, reduce the costs of application, and make the definition of a business more operable.”

The ASU discusses its divergence with IFRS:

The definition of a business in GAAP is currently identical to the definition in IFRS. However, the Board observed that although the definition is identical, it does not appear to be interpreted or applied consistently in practice between jurisdictions that apply GAAP and jurisdictions that apply IFRS. That is, stakeholders have said that in jurisdictions that apply IFRS, the definition of a business generally is not applied as broadly as it is in jurisdictions that apply GAAP. In response to concerns from its stakeholders about the complexity of the definition of a business, the IASB added a project on the definition of a business to its agenda and issued an Exposure Draft, Definition of a Business and Accounting for Previously Held Interests, which proposes similar amendments to those in this Update.

Review the press release, ASU, and FASB in Focus newsletter on the FASB’s website.

SEC (US Securities and Exchange Commission) Image

SEC Chair states that high-quality, globally accepted accounting standards are a "U.S. Imperative"

Jan 05, 2017

On January 5, 2017, the U.S. Securities and Exchange Commission (SEC) released a public statement on global accounting by Mary Jo White, Chair of the SEC, where she stressed that the strength of the U.S. capital markets depended on investors knowing that they could rely on the financial information that is available to them when they make investment decisions. And since U.S. investors also made many investment decisions using IFRS financial statements, ensuring that IFRS, as well as U.S. GAAP, are of the highest quality was one of the Commission's "highest priorities".

While Ms. White acknowledged that there had been no formal action by the Commission since 2010 and that any further action would be in the responsibility of the new SEC Chair Clayton, she nevertheless described the last years as a success.

She also noted that this progress was very important and that it needed to continue as both Boards, as well as investors, would benefit greatly from their sustained engagement.

Review the full statement on the SEC's website.

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