AAOIFI issues final standard on impairment and credit losses

24 Nov, 2017

The Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) is an Islamic international autonomous non-for-profit corporate body that prepares accounting, auditing, governance, ethics and Sharia'a standards for Islamic financial institutions and the industry. The newest standard published by the AAOIFI deals with impairment and credit losses covering current and expected losses.

The new standard FAS 30 Impairment, Credit Losses and Onerous Commitments is not converged with the corresponding requirements in IFRS 9 Financial Instruments as it was concluded that "the impairment and credit losses approaches taken by the generally accepted accounting principles recently set by various accounting standard setters and regulatory standard setters, as well as, the regulators, cannot be applicable on Islamic finance transactions in a similar manner".

The standard is effective from the financial periods beginning on or after 1 January 2020. Earlier adoption is permitted.

The issued standard can be accessed exclusively by subscribers, however, free subscription is available through the AAOIFI website. Please see the press release on the AAOIFI website for more information.

ACCA report on current status of IPSAS adoption

16 Nov, 2017

The Association of Chartered Certified Accountants (ACCA) has released a report on the current status and challenges in connection with the adoption of International Public Sector Accounting Standards (IPSASs).

The report examines progress across a sample of developing countries and aims to give select insights into the current status quo of IPSAS adoption, identifying commonalities and emerging issues. Specifically the study considers the adoption of IPSAS focusing on the date of announcement and date of adoption, an overview of progress to date, success factors, and challenges experienced.

The report can be downloaded from the ACCA website.

Agenda and pre-meeting summaries for the November 2017 IFRS Interpretations Committee meeting

10 Nov, 2017

The IASB's IFRS Interpretations Committee will be meeting in London on 20 November 2017. The Committee will discuss six issues, including three new interpretation requests.

Finalisation of draft agenda decision

The Committee will consider the public feedback on a request related to IFRS 3 Business Combinations on the acquisition of a group of assets, which the Committee had tentatively decided not to add to its agenda.  The staff are recommending that the Committee finalise this decision.   

Continued discussions

In its September 2017 meeting, the IC tentatively decided to add a project to clarify the meaning of the term ‘unavoidable costs’, which is used in the definition of an onerous contract in IAS 37 Provisions, Contingent Liabilities and Contingent Assets. The staff are recommending that the clarification be by way of an amendment to IAS 37 and that the scope of the project be limited to clarifying the meaning of ‘unavoidable costs’, and not consider broader issues related to identifying or measuring an onerous contract. 

In its September 2017 meeting, the IC asked the Staff to research into the scope of a potential narrow-scope amendment to IFRS 1 First Time Adoption of International Financial Reporting Standards with the aim of reducing compliance costs when a subsidiary becomes a first-time adopter later than its parent. The Staff are recommending the development of an amendment IFRS 1 to allow a subsidiary that applies paragraph IFRS 1.D16(a) to measure cumulative translation differences using the amounts reported by the parent based on the parent’s date of transition to IFRS.

New issues

There are three new issues. Two relate to IFRS 15 Revenue from Contracts with Customers:

  • Revenue recognition in a real estate contract that includes the transfer of land
  • Right to payment for performance completed to date

The third relates to IAS 1 Presentation of Financial Statements and IFRS 9 Financial Instruments:

  • Presentation of interest revenue for particular financial instruments

For all three issues the staff are recommending that the Interpretations Committee not add the issue to its agenda. 

Future items

The Staff are analysing requests received on whether a dual currency bond meets the solely payments of principal and interest condition in IFRS 9; whether an instrument for which the notional amount varies depending on the outcome of a transaction can be a hedging instrument applying IFRS 9; and how the initial recognition exemption in paragraphs 15 and 24 of IAS 12 applies to the recognition of right-of-use assets and lease liabilities arising under IFRS 16.

Further in­for­ma­tion

The full agenda for the meeting and our pre-meet­ing summaries can be found here. We will update this page for any changes to the agenda and our Deloitte observer notes from the meeting as they become available.

Agenda for the December 2017 ASAF meeting

20 Nov, 2017

The International Accounting Standards Board (IASB) has released an agenda for the meeting of the Accounting Standards Advisory Forum (ASAF), which is to be held at the IASB's offices in London on 7 and 8 December 2017.

The agenda for the meeting is sum­marised below:

Thursday, 7 December 2017 (9:00-17:15)

  • Primary financial statements.
    • Introduction of an investing category into the statement of financial performance.
    • Defining finance income/expenses.
    • Improving the presentation of OCI.
  • Disclosure initiative — Definition of material (proposed amendments to IAS 1 and IAS 8).
  • Disclosure initiative — Principles of disclosure — Overview and next steps.
  • Post-implementation review of IFRS 13 Fair Value Measurement — Overview on feedback and next steps.
  • Wider corporate reporting — Update from IASB discussions.
  • Academic liaison — Strategy session.
  • Information deficiencies and consolidated financial statements — Impact of consolidation on information content.

Friday, 8 December 2017 (10:10-13:45)

  • Improvements to IFRS 8 Operating Segments (Proposed amendments to IFRS 8 and IAS 34) — Explore possible alternative approaches and next steps.
  • Business combinations under common control — Update on the project and discussions on the scope and the appropriate accounting method for transactions.
  • Project updates and agenda planning.

Agenda papers for the meeting are available on the IASB's website.

Agenda for the December 2017 Emerging Economies Group meeting

15 Nov, 2017

The agenda is available for the 14th meeting of the IASB's Emerging Economies Group (EEG), which is being held in São Paulo on 4-6 December 2017.

The agenda for the meeting including a public outreach meeting on the third day is sum­marised below:

Monday 4 December 2017 (09:30-17:00)

  • Address by hosting country
  • Address by IASB
  • Presentation and discussion on Business Combinations Under Common Control (BCUCC)

Tuesday 5 December 2017 (09:00-17:15)

  • Accounting for micro-entities
  • Accounting for high-inflation
  • IAS 12 - Temporary differences on long-term non-depreciable assets
  • IASB update
  • Ad­min­is­tra­tive issues

Wednesday 6 December 2017 (09:00-17:00)

  • Application of IFRS 17 Insurance Contracts in Emerging Economies
  • Outreach event: Application of IFRS 17 Insurance Contracts

Agenda papers from this meeting are available on the IASB's website.

Agenda for the November 2017 ITCG meeting

24 Nov, 2017

The agenda is available for the next meeting of the IFRS Taxonomy Consultative Group (ITCG), which will be held by conference call on 30 November 2017.

The agenda is summarised below:

Thursday 30 November 2017 (12:00-13:00)

  • ITCG technical review of Inline XBRL Illustrative Examples
  • Overview of upcoming IFRS Taxonomy content updates
  • A preparer's guide to using the IFRS Taxonomy
  • Technical review of the IFRS Taxonomy

Agenda papers for this meeting are available on the IASB website.

Agenda for the November 2017 DPOC meeting

06 Nov, 2017

The Trustees of the IFRS Foundation will be meeting in São Paulo from 7 to 9 November 2017. However, only the meeting of the Due Process Oversight Committee (DPOC) on 7 November will be held in public.

The agenda for the DPOC meeting is summarised below.

Tuesday, 7 November 2017 (13:55–15:10)

  • Introduction and Actions from DPOC meeting held on 23 May 2017
  • Technical activities: Key issues and update
  • Correspondence - Report on complaint about breach of Due Process
  • Implementation activities for the insurance contracts standard
  • Review of activities and functions of Advisory Groups
  • Reporting Protocol: general reports
  • Education material – due process
  • Proposal for review of the Due Process Handbook
  • Correspondence: update
  • Summary

Agenda papers for the meeting are available on the IASB's website.

ASCG paper on information gaps in group financial statements and the role of consolidation

20 Nov, 2017

The Accounting Standards Committee of Germany (ASCG) has submitted a paper 'Information deficiencies of today’s group f/s and the specific role of consolidation regarding these' for discussion at the upcoming meeting of the Accounting Standards Advisory Forum (ASAF) at the IASB's offices in London on 7-8 December 2017.

The paper states that whilst it is widely acknowledged that transactions with and between members of the same group should not influence the outside appearance of that group and therefore be eliminated, such eliminations do result in a loss of information which is definitely and finally lost for outside users of financial statements. It goes on to note that, furthermore, much of today’s complexity in the environment is not captured in the group’s financial statements although it could highly influence the position, performance and cash flows of the group.

The paper can be accessed on the IASB website.

An agenda for the meeting is not yet available, however, papers are in the process of being posted here.

Consultation launched to strengthen the international audit standard-setting process

09 Nov, 2017

A consultation has been launched by the Monitoring Group to set out various options to “enhance the governance, accountability and oversight of the international audit standard-setting process.

The Monitoring Group is a group of international financial institutions and regulatory bodies committed to advancing the public interest in areas related to international audit standard-setting and audit quality.

The consultation seeks stakeholders’ views on “how best to safeguard the independence of the standard-setting process and its responsiveness to the public interest”.

A press release and the consultation paper, which runs until 9 February 2018, is available on the IOSCO website.

EBA stress test methodology

20 Nov, 2017

The European Banking Authority (EBA) has published its 2018 EU-wide stress test methodology. The exercise will cover 70% of the EU banking sector and will, for the first time, incorporate IFRS 9 'Financial Instruments'.

For banks starting to report under IFRS 9 in 2018, the 2018 EU-wide stress test takes into account the impact of the implementation of IFRS 9 on 1 January 2018 both in terms of starting point and projections.

The stress test exercise will be formally launched in January 2018 and the results to be published by 2 November 2018.

Please click for more information on the EBA website.

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