This site uses cookies to provide you with a more responsive and personalised service. By using this site you agree to our use of cookies. Please read our cookie notice for more information on the cookies we use and how to delete or block them.
The full functionality of our site is not supported on your browser version, or you may have 'compatibility mode' selected. Please turn off compatibility mode, upgrade your browser to at least Internet Explorer 9, or try using another browser such as Google Chrome or Mozilla Firefox.

News

UKGAAP Image

UK GAAP application for reporting periods ending 31 March 2020

31 Mar 2020

The table below reflects new and revised UK GAAP financial reporting requirements that need to be considered for financial reporting periods ending on 31 March 2020.

As the revised UK GAAP regime has now been in place for a number of years, preparation of either parent company or subsidiary accounts under either FRS 101 or FRS 102 should now have become a more routine exercise. The FRC has made several changes to FRS 102 as part of its first triennial review of the Standard to deal with issues highlighted in its implementation. The amendments were published in December 2017. More recently amendments to FRS 102 related to multi-employer defined benefit plans and interest rate benchmark reform have been issued.

The table below reflects new and revised UK GAAP financial reporting requirements that need to be considered for financial reporting periods ending on 31 March 2020. For those reporters who want to understand new UK GAAP application for earlier periods please select one of the following:

Pronouncement Effective date Application for quarters ending 31 March 2020?
1st qtrs.* 2nd qtrs.** 3rd qtrs.*** Full yrs****
FRS 100
Amendments to FRS 102 (first triennial review) Effective 1 January 2019. Early application is permitted provided that all the amendments to FRS 101 as a result of the triennial review are applied at the same time. Already applied in prior period (January 2019) Mandatory Mandatory Mandatory
FRS 101
The amendments are available from when an entity applying FRS 101 first applies IFRS 16 - see note 1. Already applied in prior period (January 2019) Mandatory Mandatory Mandatory
Amendments to FRS 102 (first triennial review)

Effective for accounting periods beginning on or after 1 January 2019. Early application is permitted provided that all the amendments to FRS 101 as a result of the triennial review are applied at the same time

 

Already applied in prior period (January 2019) Mandatory Mandatory Mandatory
Amendments to the Basis for Conclusions FRS 101 Reduced Disclosure Framework

No effective date. No amendments to FRS 101 have been made

N/A (see effective date column) N/A (see effective date column) N/A (see effective date column) N/A (see effective date column)
Amendments to FRS 101 - 2018/19 cycle issued

The amendments take effect for accounting periods beginning on or after 1 January 2021. If an entity applies the recognition, measurement and disclosure requirements of IFRS 17 early, the amendments to FRS 101 are applied at the same time.

# # # #
FRS 102
Amendments to FRS 102 (first triennial review) The effective date for most of the amendments to FRS 102 is for accounting periods beginning on or after 1 January 2019, with early application permitted provided all amendments are applied at the same time. The only exceptions to this are the amendments relating to directors’ loans and the tax effects of gift aid payments, for which early application is permitted separately. Limited transitional provisions are also available. The amendments to disclosure requirements under Section 1A for small entities in the Republic of Ireland are effective for accounting periods beginning on or after 1 January 2017. However, early application is permitted for companies in the Republic of Ireland that apply the Companies (Accounting) Act 2017 is applied from the same date.

Already applied in prior period (January 2019)

 

Mandatory

 

Mandatory

 

Mandatory

 

Amendments to FRS 102: Multi-employer defined benefit plans

The amendments are effective for accounting periods beginning on or after 1 January 2020, with early application permitted.

Mandatory

Optional

Optional

Optional

'Amendments to FRS 102 – Interest rate benchmark reform'.

The amendments are effective for accounting periods beginning on or after 1 January 2020, with early application permitted.

Mandatory

Optional

Optional

Optional

FRS 103
Amendments to FRS 102 (first triennial review) Effective for accounting periods beginning on or after 1 January 2019. Early application is permitted provided that all the amendments to FRS 103 as a result of the triennial review are applied at the same time. Already applied in prior period (January 2019) Mandatory Mandatory Mandatory
FRS 104
Amendments to FRS 102 (first triennial review) Effective for accounting periods beginning on or after 1 January 2019. Early application is permitted if an entity also applies the Triennial review 2017 amendments to FRS 101 or FRS 102 for an accounting period beginning before 1 January 2019. Already applied in prior period (January 2019) Mandatory Mandatory Mandatory
FRS 105
Amendments to FRS 102 (first triennial review)
The changes to disclosure requirements in FRS 105 for micro entities in the UK are applicable for accounting periods beginning on or after 1 January 2017; all other amendments to FRS 105 as a result of the triennial review are applicable for accounting periods beginning on or after 1 January 2019. Early application for UK micro-companies is permitted provided that all the amendments to FRS 105 are applied at the same time.

With respect to the Republic of Ireland, the changes to incorporate FRS 105 are applicable to accounting periods beginning on or after 1 January 2017. Earlier application is permitted for companies in the Republic of Ireland that apply the Companies (Accounting) Act 2017 is applied from the same date. All other amendments to FRS 105 as a result of the triennial review are applicable for accounting periods beginning on or after 1 January 2019. Early application of the other amendments is permitted provided that all of these other amendments are applied at the same time.

Already applied in prior period

Changes to incorporate FRS 105 in ROI applied in prior periods.  Other amendments - mandatory

Disclosure requirements for micro entities already applied in prior periods.  Other amendments - Mandatory

Changes to incorporate FRS 105 in ROI applied in prior periods.  Other amendments - mandatory

Disclosure requirements for micro entities already applied in prior periods.  Other amendments - Mandatory

Changes to incorporate FRS 105 in ROI applied in prior periods.  Other amendments - mandatory

Disclosure requirements for micro entities already applied in prior periods.  Other amendments - Mandatory

Changes to incorporate FRS 105 in ROI applied in prior periods.  Other amendments - mandatory

* 1st quarter ending on 31 March 2020 (accounting period began on 1 January 2020).

** 2nd quarter ending 31 March 2020 (accounting period began 1 October 2019).

*** 3rd quarter ending 31 March 2020 (accounting period began 1 July 2019).

**** 4th quarter ending 31 March 2020 (accounting period began 1 April 2019).

# - The amendments take effect for accounting periods beginning on or after 1 January 2021. If an entity applies the recognition, measurement and disclosure requirements of IFRS 17 early, the amendments to FRS 101 are applied at the same time. IFRS 17 has not yet been endorsed for use in the EU.

Note 1 - IFRS 16 is applicable to an entity's first annual IFRS financial statements for a period beginning on or after 1 January 2019.

 

EFRAG (European Financial Reporting Advisory Group) (dk green) Image

EFRAG publishes pre-consultation document on IBOR ED

31 Mar 2020

The IASB expects to​​ issue an exposure draft on its project on the IBOR reform Phase 2 during April 2020 with a comment period of 45 days.​​ In order to maximise the period during which its constituents can comment on its draft comment, the European Financial Reporting Advisory Group (EFRAG) has now published pre-consultation document on the exposure draft.

The views in the document are based on the IASB tentative decisions available on 31 March 2020. They will form the basis for EFRAG’s draft comment letter that will be published as quickly as possible once the IASB has published its exposure draft.

In the document, EFRAG welcomes the tentative decisions taken by the IASB during its deliberations on the second phase of its project on the IBOR reform. In particular, EFRAG supports providing a practical expedient allowing an entity to apply paragraph B.5.4.5 of IFRS 9 Financial Instruments to account for mod​ifications related to IBOR reform; supports the tentative decisions taken on hedge accounting; and observes that the proposed disclosures will assist users of financial statements in understanding the effects of IBOR reform on an entity.​

Please click for more information on the EFRAG website:

Calendar Image

New and revised pronouncements as at 31 March 2020

31 Mar 2020

Our popular summary of new and revised financial reporting requirements, updated for financial reporting periods ending on 31 March 2020. This listing can be used to perform a quick check that new financial reporting requirements such as new and revised accounting standards and interpretations, and amendments to standards and interpretations, have been fully considered in the reporting close process.

The information below reflects developments to 31 March 2020 and will be updated through to 30 June 2020 to reflect new and revised financial reporting requirements that need to be considered for financial reporting periods ending on 31 March 2020. For accounts approved after June 2020, please also refer to subsequent versions of this document for any new and revised IFRSs that have additionally been issued that might require disclosure in the accounts under IAS 8:30.

The information below is organised as follows:

Summary

The table below provides a summary of the pronouncements which will be mandatorily applied by entities for the first time at 31 March 2020, for various quarterly reporting periods. Where an EU entity chooses to prepare financial statements in accordance with IFRSs as issued by the IASB, as well as in compliance with IFRSs as adopted by the EU, that entity should comply with the earlier IASB effective date for those items. The table below provides a summary of these pronouncements, and which reporting periods they apply to:

Pronouncement IASB Effective date* EU effective date* EU Mandatory at 31 March 2020?
1st qtrs.** 2nd qtrs.*** 3rd qtrs.**** Full yrs*****
IFRS 16 Leases 1 January 2019 1 January 2019 Already applied in prior period (January 2019) Yes Yes Yes
NEW OR REVISED INTERPRETATIONS
IFRIC 23 Uncertainty over Income Tax Treatments 1 January 2019 1 January 2019 Already applied in prior period (January 2019) Yes Yes Yes
Annual Improvements 2015-2017 Cycle 1 January 2019 1 January 2019 Already applied in prior period (January 2019) Yes Yes Yes
Applying IFRS 9 'Financial Instruments' with IFRS 4 'Insurance Contracts' (Amendments to IFRS 4)
1 January 2018 1 January 2018 Optional ~ Optional ~ Optional ~ Optional ~
Long-term Interests in Associates and Joint Ventures (Amendments to IAS 28) 1 January 2019 1 January 2019 Already applied in prior period (January 2019) Yes Yes Yes
Prepayment Features with Negative Compensation (Amendments to IFRS 9) 1 January 2019 1 January 2019 Already applied in prior period (January 2019) Yes Yes Yes
Plan Amendment, Curtailment or Settlement (Amendments to IAS 19) 1 January 2019 1 January 2019 Already applied in prior period (January 2019) Yes Yes Yes
Amendments to References to the Conceptual Framework in IFRS Standards 1 January 2020 1 January 2020 Yes No No No
Definition of Material (Amendments to IAS 1 and IAS 8) 1 January 2020 1 January 2020 Yes No No No
Interest Rate Benchmark Reform (Amendments to IFRS 9, IAS 39 and IFRS 7) 1 January 2020 1 January 2020 Yes No No No

* Generally annual reporting periods beginning on or after the date indicated, may only apply to first-time adopters in some limited cases (see below for full details).

** 1st quarter ending on 31 March 2020 (accounting period began on 1 January 2020).

*** 2nd quarter ending 31 March 2020 (accounting period began 1 October 2019).

**** 3rd quarter ending 31 March 2020 (accounting period began 1 July 2019).

***** 4th quarter ending 31 March 2020 (accounting period began 1 April 2019).

~ The application of both approaches (overlay approach/ deferral approach) is optional and an entity is permitted to stop applying them before the new insurance contracts standard is applied.

More information about these pronouncements, and all new and revised pronouncements, is set out below.

Financial statement considerations in adopting new and revised pronouncements

Where new and revised pronouncements are applied for the first time, there can be consequential impacts on annual financial statements, including:

  • Updates to accounting policies. The terminology and substance of disclosed accounting policies may need to be updated to reflect new recognition, measurement and other requirements, e.g IAS 19 Employee Benefits may impact the measurement of certain employee benefits.
  • Impact of transitional provisions. IAS 8 Accounting Policies, Changes in Estimates and Errors contains a general requirement that changes in accounting policies are retrospectively applied, but this does not apply to the extent an individual pronouncement has specific transitional provisions.
  • Disclosures about changes in accounting policies. Where an entity changes its accounting policy as a result of the initial application of an IFRS and it has an effect on the current period or any prior period, IAS 8 requires the disclosure of a number of matters, e.g. the title of the IFRS, the nature of the change in accounting policy, a description of the transitional provisions, and the amount of the adjustment for each financial statement line item affected
  • Third statement of financial position. IAS 1 Presentation of Financial Statements requires the presentation of a third statement of financial position as at the beginning of the preceding period in addition to the minimum comparative financial statements in a number of situations, including if an entity applies an accounting policy retrospectively and the retrospective application has a material effect on the information in the statement of financial position at the beginning of the preceding period
  • Earnings per share (EPS). Where applicable to the entity, IAS 33 Earnings Per Share requires basic and diluted EPS to be adjusted for the impacts of adjustments result from changes in accounting policies accounted for retrospectively and IAS 8 requires the disclosure of the amount of any such adjustments.

Whilst disclosures associated with changes in accounting policies resulting from the initial application of new and revised pronouncements are less in interim financial reports under IAS 34 Interim Financial Reporting, some disclosures are required, e.g. description of the nature and effect of any change in accounting policies and methods of computation.

 

New or revised standards

The information below can be used to assist with the disclosure requirements under paragraph 30 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors, which requires entities to disclose any new IFRSs that are in issue but not yet effective and which are likely to impact the entity

New or revised pronouncement When EU effective

Application at 31 March 2020 to:

1st qtrs 2nd qtrs 3rd qtrs Full yrs

IFRS 16 Leases

IFRS 16 specifies how an IFRS reporter will recognise, measure, present and disclose leases. The standard provides a single lessee accounting model, requiring lessees to recognise assets and liabilities for all leases unless the lease term is 12 months or less or the underlying asset has a low value. Lessors continue to classify leases as operating or finance, with IFRS 16’s approach to lessor accounting substantially unchanged from its predecessor, IAS 17.
Issued: 13 January 2016 (Summary of IFRS 16, article, IFRS 16 resources)
Applicable to annual reporting periods beginning on or after 1 January 2019

Already applied in prior period (January 2019) Mandatory Mandatory Mandatory

IFRS 17 Insurance Contracts

IFRS 17 requires insurance liabilities to be measured at a current fulfillment value and provides a more uniform measurement and presentation approach for all insurance contracts. These requirements are designed to achieve the goal of a consistent, principle-based accounting for insurance contracts. IFRS 17 supersedes IFRS 4 Insurance Contracts as of 1 January 2021.

Issued: 18 May 2017 (Summary of IFRS 17, Article, Newsletter).

Applicable to annual reporting periods beginning on or after 1 January 2021

Not yet endorsed for use in the EU.

 

New or revised interpretations

New or revised interpretation When effective Application at 31 March 2020 to:
1st qtrs. 2nd qtrs. 3rd qtrs 4 qtrs.

IFRIC 23 Uncertainty over Income Tax Treatments

The interpretation sets out how to determine taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates when there is uncertainty over income tax treatments under IAS 12 Income Taxes.

The Interpretation requires an entity to:

  • determine whether uncertain tax positions are assessed separately or as a group; and
  • assess whether it is probable that a tax authority will accept an uncertain tax treatment used, or proposed to be used, by an entity in its income tax filings:
    • If yes, the entity should determine its accounting tax position consistently
      with the tax treatment used or planned to be used in its income tax filings.
    • If no, the entity should reflect the effect of uncertainty in determining its accounting tax position.

Issued: 7 June 2017 (article)

Effective date: annual periods beginning on or after 1 January 2019. Entities can apply the Interpretation either on a fully retrospective or modified retrospective approach (where comparatives are not permitted or required to be restated).

 

Already applied in prior period (January 2019)

Mandatory

Mandatory

Mandatory

Amendments

New or revised pronouncement When effective Application at 31 December 2019 to:
1st qtrs 2nd qtrs 3rd qtrs Full yrs

Editorial Corrections (various)

The IASB periodically issues Editorial Corrections and changes to IFRSs and other pronouncements. Since the beginning of calendar 2012, such corrections have been made in February 2012, July 2012, March 2013, September 2013, November 2013 and March 2014, September 2014, December 2014, March 2015, April 2015, September 2015, December 2015, March 2016, May 2016, September 2016, December 2016, September 2017, November 2017, December 2018, March 2019, May 2019 and December 2019.

Note: For details of these editorial corrections, see our IASB editorial corrections page.

As minor editorial corrections, these changes are effectively immediately applicable under IFRS See comment in previous column
Applying IFRS 9 'Financial Instruments' with IFRS 4 'Insurance Contracts' (Amendments to IFRS 4)
Amends IFRS 4 Insurance Contracts 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.
Issued: 12 September 2016 (article, newsletter)

Overlay approach to be applied when IFRS 9 is first applied. Deferral approach effective for annual periods beginning on or after 1 January 2018 and only available for three years after that date.

 

Optional

Optional

Optional

Optional

Annual Improvements 2015-2017 Cycle
Makes amendments to the following standards:
  • IFRS 3 Business Combinations and IFRS 11 Joint Arrangements - The amendments to IFRS 3 clarify that when an entity obtains control of a business that is a joint operation, it remeasures previously held interests in that business. The amendments to IFRS 11 clarify that when an entity obtains joint control of a business that is a joint operation, the entity does not remeasure previously held interests in that business.

  • IAS 12 Income Taxes - The amendments clarify that the requirements in the former 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 paragraph 52A that only deals with situations where there are different tax rates for distributed and undistributed profits.
  • IAS 23 Borrowing Costs - The amendments clarify that if any specific borrowing remains outstanding after the related asset is ready for its intended use or sale, that borrowing becomes part of the funds that an entity borrows generally when calculating the capitalisation rate on general borrowings.

The amendments are all effective for annual periods beginning on or after 1 January 2019.

Already applied in prior period (January 2019) Mandatory Mandatory Mandatory
Long-term Interests in Associates and Joint Ventures (Amendments to IAS 28)
The amendments 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.
The amendments in Long-term Interests in Associates and Joint Ventures (Amendments to IAS 28) are:
  • Paragraph 14A has been added to clarify that an entity applies IFRS 9 including its impairment requirements, 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.
  • Paragraph 41 has been deleted because the Board felt that it merely reiterated requirements in IFRS 9 and had created confusion about the accounting for long-term interests.
Issued:12 October 2017 (article)
Annual periods beginning on or after 1 January 2019
Annual periods beginning on or after 1 January 2019

Annual periods beginning on or after 1 January 2019

Already applied in prior period (January 2019)

Mandatory

Mandatory

Mandatory

Prepayment Features with Negative Compensation (Amendments to IFRS 9)
The amendments address concerns about how IFRS 9 Financial Instruments classifies particular prepayable financial assets. In addition, the IASB has clarified an aspect of the accounting for financial liabilities following a modification.
The amendments are:

Changes regarding symmetric prepayment options

Under the current IFRS 9 requirements, the SPPI condition is not met if the lender has to make a settlement payment in the event of termination by the borrower (also referred to as early repayment gain).

Prepayment Features with Negative Compensation amends the existing requirements in IFRS 9 regarding termination rights in order to allow measurement at amortised cost (or, depending on the business model, at fair value through other comprehensive income) even in the case of negative compensation payments.

Under the amendments, the sign of the prepayment amount is not relevant, i. e. depending on the interest rate prevailing at the time of termination, a payment may also be made in favour of the contracting party effecting the early repayment. The calculation of this compensation payment must be the same for both the case of an early repayment penalty and the case of a early repayment gain.

Clarification regarding the modification of financial liabilities

The final amendments also contain (in the Basis for Conclusions) a clarification regarding the accounting for a modification or exchange of a financial liability measured at amortised cost that does not result in the derecognition of the financial liability. The IASB clarifies that an entity recognises any adjustment to the amortised cost of the financial liability arising from a modification or exchange in profit or loss at the date of the modification or exchange. A retrospective change of the accounting treatment may therefore become necessary if in the past the effective interest rate was adjusted and not the amortised cost amount.
Issued: 12 October 2017 (article)

 

The amendments are to be applied retrospectively for fiscal years beginning on or after 1 January 2019, i. e. one year after the first application of IFRS 9 in its current version. Early application is permitted so entities can apply the amendments together with IFRS 9 if they wish so. Additional transitional requirements and corresponding disclosure requirements must be observed when applying the amendments for the first time.

Already applied in prior period (January 2019)

Mandatory

Mandatory

Mandatory

Plan Amendment, Curtailment or Settlement (Amendments to IAS 19)
The amendments in Plan Amendment, Curtailment or Settlement (Amendments to IAS 19) are:
  • If a plan amendment, curtailment or settlement occurs, it is now mandatory that the current service cost and the net interest for the period after the remeasurement are determined using the assumptions used for the remeasurement.
  • In addition, amendments have been included to clarify the effect of a plan amendment, curtailment or settlement on the requirements regarding the asset ceiling.

Issued: 7 February 2018 (article)

Annual periods beginning on or after 1 January 2019.

Already applied in prior period (January 2019)

Mandatory

Mandatory

Mandatory

Amendments to References to the Conceptual Framework in IFRS Standards


Together with the revised Conceptual Framework published in March 2018, the IASB has also issued Amendments to References to the Conceptual Framework in IFRS Standards. The document contains amendments to IFRS 2, IFRS 3, IFRS 6, IFRS 14, IAS 1, IAS 8, IAS 34, IAS 37, IAS 38, IFRIC 12, IFRIC 19, IFRIC 20, IFRIC 22, and SIC-32. Not all amendments, however update those pronouncements with regard to references to and quotes from the framework so that they refer to the revised Conceptual Framework. Some pronouncements are only updated to indicate which version of the framework they are referencing to (the IASC framework adopted by the IASB in 2001, the IASB framework of 2010, or the new revised framework of 2018) or to indicate that definitions in the standard have not been updated with the new definitions developed in the revised Conceptual Framework.

Issued: 29 March 2018 (article)

Annual periods beginning on or after 1 January 2020

Mandatory

Optional

Optional

Optional

Definition of a Business (Amendments to IFRS 3)

The amendments in Definition of a Business (Amendments to IFRS 3) are changes to Appendix A Defined terms, the application guidance, and the illustrative examples of IFRS 3 only. They:

  • clarify that to be considered a business, an acquired set of activities and assets must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs;
  • narrow the definitions of a business and of outputs by focusing on goods and services provided to customers and by removing the reference to an ability to reduce costs;
  • add guidance and illustrative examples to help entities assess whether a substantive process has been acquired;
  • remove the assessment of whether market participants are capable of replacing any missing inputs or processes and continuing to produce outputs; and
  • add an optional concentration test that permits a simplified assessment of whether an acquired set of activities and assets is not a business.

Issued: 22 October 2018 (article/newsletter)


Business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after 1 January 2020
Not yet endorsed for use in the EU.

Definition of Material (Amendments to IAS 1 and IAS 8)

The amendments in Definition of Material (Amendments to IAS 1 and IAS 8) clarify the definition of ‘material’ and align the definition used in the Conceptual Framework and the standards.

Issued: 31 October 2018 (article)

 

Annual reporting periods beginning on or after 1 January 2020

Mandatory

Optional

Optional

Optional

Interest Rate Benchmark Reform (Amendments to IFRS 9, IAS 39 and IFRS 7)

The amendments in Interest Rate Benchmark Reform (Amendments to IFRS 9, IAS 39 and IFRS 7) clarify that entities would continue to apply certain hedge accounting requirements assuming that the interest rate benchmark on which the hedged cash flows and cash flows from the hedging instrument are based will not be altered as a result of interest rate benchmark reform.

Issued: 26 September 2019 (article)

Annual reporting periods beginning on or after 1 January 2020

Mandatory

Optional

Optional

Optional

Classification of Liabilities as Current or Non-Current (Amendments to IAS 1)

The amendments aim to promote consistency in applying the requirements by helping companies determine whether, in the statement of financial position, debt and other liabilities with an uncertain settlement date should be classified as current (due or potentially due to be settled within one year) or non-current

Issued: 23 January 2020 (article)

Annual reporting periods beginning on or after 1 January 2022
Not yet endorsed for use in the EU.

 

 

 

 

 

IPSASB (International Public Sector Accounting Standards Board) (mid gray) Image

Updated IPSAS-IFRS alignment dashboard

31 Mar 2020

The International Public Sector Accounting Standards Board (IPSASB), which develops the International Public Sector Accounting Standards (IPSAS) for financial reporting by governments and other public sector entities, has released an updated IPSAS-IFRS alignment dashboard showing how far individual IPSAS are aligned with corresponding IFRSs.

Please click to access the updated alignment dashboard prepared for the March 2020 IPSASB meeting on the IPSASB website.

In this context, please also so our 2020 edition of IPSAS in your pocket published in January.

covid1 Image

Charities SORP Committee publishes guidance on Covid-19

30 Mar 2020

The Charities Statement of Recommended Practice (SORP) Committee has published guidance on the implications of COVID-19 control measures and charity financial reporting.

The advice does not amend the SORP, is advisory in nature and aims to assist preparers, auditors and examiners of accounts. Preparers are under no obligation to apply the advice.

The key messages from the guidance are:

  • The measures being taken to contain COVID 19 will impact on charities in many different ways and it is important for charity trustees to understand the impact on the delivery of their activity and their governance including their finances.
  • Where a charity is preparing a set of accounts and these have not yet been approved, trustees should consider whether information needs to be included to explain the impact of the COVID 19 situation on their charity.
  • There could be changes to the financial statements needed as a result of the COVID 19 situation and it is important that trustees understand and consider these.
  • Charities should keep up to date with developing guidance from the relevant charity regulator in their jurisdiction.

Specifically the guidance covers:

  • The Trustees’ Annual Report and risk reporting.
  • Accounting related considerations:
    • ‘True and fair’
    • Post balance sheet events
    • Going concern considerations
    • Alternative basis of preparation where not a going concern
    • Defined benefit pension liabilities
    • Liabilities and provisions
  • Audit and external scrutiny.
  • Reporting to the charity regulator by charity trustees.
  • Filing and going concern, trustees’ filing responsibilities and late filing.

The guidance is available on the Charities SORP website.

Book badge (green) Image
IASB (International Accounting Standards Board) (blue) Image

Seventh IASB research forum — Call for papers extended

30 Mar 2020

The International Accounting Standards Board (IASB) will host its seventh Research Forum on 2–3 November 2020 in Oxford. The deadline for submitting papers has now been extended to 28 May 2020.

Decisions on submitted papers will be made by 20 July 2020. Please click for the press release and more information on the research forum on the IASB website.

United States Image
covid1 Image

CARES Act would provide optional temporary relief from CECL accounting

30 Mar 2020

On 27 March 2020, US President Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which provides relief from certain accounting and financial reporting requirements under U.S. GAAP. However, until actions are taken by the SEC or the FASB, the provisions of the CARES Act are not amendments to US GAAP.

Section 4014 of the CARES Act offers optional temporary relief from applying the FASB’s current expected credit losses (CECL) standard (ASU 2016-13) for certain entities. Any guidance developed by the SEC or FASB to address the CARES Act’s impact on US GAAP would most likely take into account both the scope and length of any optional deferral, will likely take into account whether any deferral should apply to all entities that were otherwise required to adopt the CECL, and would more clearly define the date of adoption if an entity chose the deferral. For more information, see Deloitte's related Heads Up newsletter as well as the CARES Act, which is available on the US Senate's website.

Other than US Senate and Congress, the IASB has concluded that the existing requirements within IFRS 9 Financial Instruments (including the IASB's CECL model) need not be changed, removed nor added to. On Friday, the IASB only released a statement to support the consistent application of requirements in IFRS 9.

The IASB's position is supported by several other communications on the application of IFRS 9 during the COVID-19 crisis.

  • The Office of the Superintendent of Financial Institutions (OSFI) in Canada has released a statement that includes guidance on Applying IFRS 9 in extraordinary circumstances that will allow companies to remain compliant with IFRS as issued by the IASB;
  • the Prudential Regulation Authority (PRA) of the Bank of England has released a statement Covid-19: IFRS 9, capital requirements and loan covenants that offers an annex with guidance consistent with IFRS 9 to assist firms in making well-balanced and more consistent ECL estimates and in determining how to treat payment holidays and similar schemes for accounting and regulatory purposes;
  • the French Autorité des Marchés Financiers (AMF) has released guidance (in the French language only) noting that the general measures implemented allowing, among other things, payment suspensions or deferrals or the granting of additional appropriations do not mechanically constitute an indicator of a significant increase in the credit risk of the financial assets concerned;
  • the German Institut der Wirtschaftsprüfer (IDW) has released comprehensive guidance on IFRS 9 that is also available in an (abridged) English language translation; and
  • the Malaysian Accounting Standards Board (MASB) has countered calls for a temporary exemption from MFRS 9 (the Malaysian equivalent of IFRS 9) with a statement reassuring its constituents "that the principle-based nature of the Malaysian Financial Reporting Standards (MFRS) Framework requires and allows for judgement in addressing the accounting challenges arising from COVID-19".

All statements agree that IFRS 9 is principles-based and requires the use of experienced credit judgement and that the current situation does not lead to an undifferentiated, automatic transfer of financial instruments from Level 1 to Level 2 or even Level 3.

Earlier last week, ESMA hat already concluded that the principles-based nature of IFRS 9 includes sufficient flexibility to faithfully reflect the specific circumstances of the COVID-19 outbreak and the associated public policy measures.

IFRS Foundation (blue) Image
covid1 Image

IFRS Foundation issues statement on its work during the COVID-19 pandemic

27 Mar 2020

The IFRS Foundation has issued a statement, ‘The coronavirus and the Foundation’s work,’ which acknowledges that this is a difficult time for stakeholders and provides information on what work they are doing to support their stakeholders.

In particular, the statement notes that its projects on IBOR reform and amendments to IFRS 17 are still on schedule; however, timelines will be discussed on specific projects during its April meeting. In addition, the publication of several narrow-scope amendments to IFRS Standards have been postpone to May 2020 (see our updated IASB work plan analysis).

The IFRS Foundation has also issued educational materials to support the application of IFRS 9 during the economic uncertainity arising from the coronavirus pandemic and has shifted to virtual meetings.

For more information, see the statement on the IASB’s website.

EFRAG (European Financial Reporting Advisory Group) (dk green) Image
covid1 Image

EFRAG requests the IASB extend consultation period

27 Mar 2020

The EFRAG have sent a letter to the IASB requesting an extension to the public consultation phase of recent or soon-to-be issued publications due to the affects of the coronavirus disease pandemic. In addition, the EFRAG suggests the amendment to IFRS 9 (IBOR Phase 2) should be published quickly after the publication of the exposure draft in April 2020 in order to avoid any potential complications.

For more information, see the press release and letter on the EFRAG’s Web site.

IASB (International Accounting Standards Board) (blue) Image

IASB updates work plan in view of COVID-19 developments

27 Mar 2020

The IASB has postponed to May 2020 the publication of several narrow-scope amendments to IFRS Standards originally planned for March and April 2020. This consolidation of publications is intended to facilitate more efficient post-publication procedures by the stakeholders. The work plan has been updated accordingly.

Below is an analysis of all changes made to the work plan since our last analysis on 21 March 2020. We also note the projects the IASB intends to move forward with in April 2020.

Standard-setting projects

  • No changes

Maintenance projects

  • Annual improvements — 2018-2020 cycle — Final amendments are now expected in May 2020 (formerly April 2020). The following projects are part of the annual improvements:
    • Fees in the ‘10 per cent’ Test for Derecognition of Financial Liabilities (Amendments to IFRS 9)
    • Lease Incentives (Amendment to Illustrative Example 13 accompanying IFRS 16)
    • Subsidiary as a First-time Adopter (Amendment to IFRS 1)
    • Taxation in Fair Value Measurements (Amendment to IAS 41)
  • IBOR Reform and its Effects on Financial Reporting — Phase 2 — An exposure draft is still expected in April 2020
  • Onerous Contracts — Cost of Fulfilling a Contract (Amendments to IAS 37) — An IFRS amendment is now expected in May 2020 (formerly Q2 2020)
  • Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16) — An IFRS amendment is now expected in May 2020 (formerly March 2020)
  • Updating a Reference to the Conceptual Framework (Amendments to IFRS 3) — An IFRS amendment is now expected in May 2020 (formerly April 2020)

Research projects

  • Post-implementation Review of IFRS 10, IFRS 11 and IFRS 12 — The rescheduled research review is still expected to take place in April 2020

Other projects

  • Due Process Handbook Review — Final amendments are still expected in April 2020

The above is a faithful comparison of the IASB work plan at 21 March 2020 and at 27 March 2020. For access to the current IASB work plan at any time, please click here.

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.