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Hyperinflationary economies - updated IPTF watch list available

14 Dec 2018

IAS 29 'Financial Reporting in Hyperinflationary Economies' defines and provides general guidance for assessing whether a particular jurisdiction's economy is hyperinflationary. But the IASB does not identify specific jurisdictions. The International Practices Task Force (IPTF) of the Centre for Audit Quality (CAQ) monitors the status of 'highly inflationary' countries. The Task Force's criteria for identifying such countries are similar to those for identifying 'hyperinflationary economies' under IAS 29.

The IPTF's discussion document for the 27 November 2018 meeting is now available and states the following view of the Task Force:

Countries with three-year cumulative inflation rates exceeding 100%:

  • Angola
  • Argentina
  • South Sudan
  • Sudan
  • Suriname
  • Venezuela

Countries with projected three-year cumulative inflation rates exceeding 100%:

  • Democratic Republic of Congo
  • Libya

Countries where the three-year cumulative inflation rates had exceeded 100% in recent years:

There are no countries in this category for this period.

Countries with recent three-year cumulative inflation rates exceeding 100% after a spike in inflation in a discrete period:

  • Ukraine

Countries with projected three-year cumulative inflation rates between 70% and 100% or with a significant (25% or more) increase in inflation during the current period

  • Egypt
  • Islamic Republic of Iran
  • Liberia
  • Yemen

The full list, including exact numbers, detailed explanations of the calculation of the numbers, and observations of the Task Force are available on the CAQ website. We also offer an overview of the IPTF's assessment of hyperinflationary jurisdictions at the end of our summary of IAS 29.

EFRAG publishes summary report for the joint outreach event on FICE

13 Dec 2018

The EFRAG has issued a summary report on the joint outreach event on the financial instruments with characteristics of equity (FICE) Discussion Paper (DP) co-hosted with the Accounting Standards Committee of Germany (ASCG) on 20 November 2018 in Frankfurt.

Specifically, the event focused on the following aspects of the IASB's FICE project:

  • Objective, scope and challenges;
  • The IASB's preferred approach and classification of non-derivative instruments;
  • Classification of derivative financial instruments;
  • Compound instruments and redemption obligation arrangements;
  • Presentation requirements;
  • Disclosure; and
  • Contractual terms.

For more information, see the press release and summary report on the EFRAG website.

FRC withdraws Practice Notes 25 and 27

13 Dec 2018

The Financial Reporting Council (FRC) has withdrawn Practice Note 25 'Attendance at Stocktaking' and Practice Note 27 'The Audit of Credit Unions in the United Kingdom'.

A press release with further information is available on the FRC website.

EFRAG Board meeting December 2018

13 Dec 2018

The European Financial Reporting Advisory Group (EFRAG) will hold a Board meeting on 18 December 2018 in Brussels.

An agenda with supporting papers and details on how to register for the public meeting can be found on the EFRAG website.

IASB decides on first potential amendments to IFRS 17

13 Dec 2018

At its meeting currently held in London, the IASB discussed IFRS 17 'Insurance Contracts' and 13 of the 25 concerns regarding the standard that were identified in October 2018 as candidates for potential amendments.

Applying the criteria for evaluating proposed amendments agreed on in October, the Board came to the following conclusions (all votes with at least 13 Board members in favour):



Agenda paper with detailed description (link to IASB website)

Board decision - consider amendment yes or no?


Separate presentation in the statement of financial position of groups that are assets and groups that are liabilities

Agenda paper 2A


Presentation and measurement

Separate presentation and measurement of premiums receivable and claims payable



Use of locked in discount rate to adjust the contractual service margin (CSM)

Agenda paper 2B



Subjectivity in determining discount rates and risk adjustment



Risk adjustment in a group of entities



Other comprehensive income (OCI) option for insurance finance income and expense


Defined terms

Definition of insurance contract with direct participation features

Agenda paper 2C



Limited applicability of risk mitigation exception

non-transitional requirements: no

transitional requirements: no vote — deferred to the more general discussion of transition requirements, especially related to OCI


Business combinations: classification of contracts

Agenda paper 2D



Business combinations: contracts acquired in their settlement period



Reinsurance contracts held: expected cash flows arising from underlying insurance contracts not yet issued

Agenda paper 2E



Interim financial statements: Treatment of accounting estimates

Agenda paper 2F


The IASB has released a podcast on the IFRS 17 session of its December meeting, featuring IASB Board member Darrel Scott and IASB technical manager Roberta Ravelli. The podcast can be accessed through the press release on the IASB website. Please see also our Deloitte observer notes for a comprehensive summary of the IASB's discussions on the individual points.

The remaining nine topics from the list of issues presented at the October meeting will be considered at a future meeting.

The IASB has published a press release announcing that it will propose to amend IFRS 17 in the one respect noted above.

Closing Out 2018

13 Dec 2018

Welcome to our one-stop guide covering the issues relevant to the preparation of December 2018 annual reports.

The FRC's annual review of corporate reporting and ESMA’s common enforcement priorities provide areas of regulatory scrutiny which reporters of all sizes should focus on within in the coming reporting season.

Whether this is reporting of risks associated with ‘Brexit’, clear presentation and appropriate reconciliation of APMs or proper disclosure of the judgements and estimates applied in preparing financial statements; there are many things to consider.  

Significantly, two new accounting Standards, IFRS 9 on financial instruments and IFRS 15 on revenue come into force for the first time and the FRC expects companies to apply these major standards properly and provide sufficient disclosure of their impact. The FRC has published a series of thematic reviews to help companies improve disclosures in this area.

With the mandatory effective date of IFRS 16 on leases being only one year away, both the FRC and ESMA expect companies to provide both qualitative and quantitative company-specific disclosures on the effects of their adoption.

In addition the strategic report in general remains an area that the FRC continually challenges in its monitoring work.

Companies should ensure that their reports include a fair review of the company’s business that is a balanced and comprehensive analysis of both performance and position. Those with complex supplier arrangements are expected to disclose the nature and amount and impact on liquidity and those within the scope of the EU Non-Financial Reporting (NFR) Directive should provide a separate non-financial information statement within the strategic report to satisfy its requirements.

With initiatives from players such as the TCFD bringing climate reporting into the spotlight, companies are expected to disclose the impact on a company’s operations on the environment and how environmental matters may affect a company’s development, performance and position.

And, with the issue of the disclosure of dividend policy and practice gaining recent traction, companies are reminded to report clearly in one place their policies in this area.

Our Closing Out 2018 publication covers all these topics and more, providing an invaluable guide to the issues affecting today’s corporate reporting.

IASB publishes proposed amendments to IAS 37 regarding onerous contracts

13 Dec 2018

The International Accounting Standards Board (IASB) has published an exposure draft 'Cost of Fulfilling a Contract (Proposed amendments to IAS 37)' considering costs a company should include as the cost of fulfilling a contract when assessing whether a contract is onerous. Comments are requested by 15 April 2019.



The IFRS Interpretations Committee received a request to clarify what costs an entity considers in assessing whether a contract is onerous. The Committee’s research revealed that, for some contracts, differing interpretations of the onerous contract requirements in IAS 37 Provisions, Contingent Liabilities and Contingent Assets could have a material effect on entities that enter into those contracts. Consequently, the Committee recommended that the Board clarifies the onerous contract requirements in IAS 37. The Board supported the Committee’s suggestion and has today published an exposure draft of proposed clarifications.


Suggested changes

The changes proposed in ED/2018/2 Cost of Fulfilling a Contract (Proposed amendments to IAS 37)

  • specify that the ‘cost of fulfilling’ a contract in paragraph 68 of IAS 37 comprises the ‘costs that relate directly to the contract’; and
  • provide examples of costs that do, and do not, relate directly to a contract to provide goods or services.

The Board proposes no new requirements for entities to disclose information about onerous contracts.

Comments on the proposed changes are requested by 15 April 2019.


Effective date and transition requirements

The exposure draft does not contain a proposed effective date, which the IASB intends to decide on after the exposure. Early application would be permitted.

Entities already reporting under IFRS would be required to apply the proposed amendments to contracts existing at the beginning of the annual reporting period in which the entity first applies the amendments. Comparatives are not restated (‘modified retrospective’ approach). There are no specific transition requirements for entities adopting IFRSs for the first time.


Additional information

Please click for:

Assessing financial statement materiality of climate-related and other emerging risks

13 Dec 2018

The Australian Accounting Standards Board (AASB) has published 'Climate-related and other emerging risks disclosures: assessing financial statement materiality using AASB Practice Statement 2'.

The publication argues that climate-related risks and other emerging risks are currently predominantly discussed outside the financial statements, if at all, while qualitative external factors such as the industry in which the entity operates, and investor expectations may make such risks ‘material’ and warrant disclosures when preparing financial statements, regardless of their numerical impact. It also notes investor statements on the importance of climate-related risks to their decision making so that entities can no longer treat climate-related risks as merely a matter of corporate social responsibility and should consider them also in the context of their financial statement.

AASB Practice Statement 2 'Making Materiality Judgements' is essentially the same as the IASB Practice Statement on Materiality with added specific guidance for not-for-profit entities.

Please click to access Climate-related and other emerging risks disclosures: assessing financial statement materiality using AASB Practice Statement 2 on the AASB website.

AcSB publishes final framework for reporting performance measures

13 Dec 2018

In order to help enhance the relevance of financial information, the Canadian standard-setter Accounting Standards Board (AcSB) has developed a framework responding to the needs of stakeholders about the performance measures reported by entities. The framework is aimed at enhancing the usefulness and transparency of performance measures for users when management chooses to report them outside financial statements.

The framework was first published as a draft in June 2018, and stakeholders were asked to provide their feedback by way of an online survey, in-person discussions, and written responses. 

The AcSB received feedback from over 350 Canadian and international stakeholders, from both the for-profit and not-for profit sectors, as well as from all parties involved in financial reporting – management, directors, providers, regulators, academics, and standard setters.

As a result, a detailed breakdown of respondents and their comments accompanies the final framework for reporting performance measures (both links to the AcSB website).

IASB publishes editorial corrections

12 Dec 2018

The IASB has published its first batch of editorial corrections in 2018.

The editorial corrections contain corrections to amendments, corrections to stand-alone standards, and corrections to the various versions of the red and blue book 2018. The following pronouncements are affected:

  • IFRS 16 Leases
  • Classification and Measurement of Share-based Payment Transactions
  • IFRS 9 Financial Instruments
  • IFRS 13 Fair Value Measurement
  • IFRS Practice Statement 2 Making Materiality Judgments
  • IFRS 1 First-time Adoption of International Financial Reporting Standards

Editorial corrections do not change the meaning or application of pronouncements, but instead correct inadvertent errors. The editorial corrections can be viewed on the editorial corrections page of the IASB's website.

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.