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News

FRC Image

FRC publishes draft response to proposed amendments to IFRS 17

16 Aug 2019

The Financial Reporting Council (FRC) has published a staff draft of its response to the International Accounting Standards Board (IASB)’s Exposure Draft ED/2019/4 Amendments to IFRS 17 ("the exposure draft").

The draft response outlines the FRC staff’s tentative conclusions on issues raised in the IASB's exposure draft. Although the FRC agrees with the majority of the proposals in the exposure draft, it raises some concerns regarding proposals to address accounting mismatches between reinsurance contracts held and onerous underlying insurance contracts. The FRC also highlights some practical challenges of implementing the annual cohort requirement, especially for contracts that share risk.

The FRC has stated that it welcomes stakeholders’ views on its staff draft to inform its final response to the IASB.

The draft response can be accessed on the FRC website.

 

IASB (International Accounting Standards Board) (blue) Image

IASB adds second phase of IBOR reform project to its work plan

15 Aug 2019

Recent market developments have brought into question the long-term viability of Interbank offered rates (IBORs) and the IASB is currently looking into the potential effects of financial reporting.

The first phase of the project deals with pre-replacement issues (issues affecting financial reporting in the period before the replacement of an existing interest rate benchmark). It was added to the standard-setting agenda of the IASB in December 2018 and saw the publication of an exposure draft of propoed amendments in May 2019. The IASB is currently working towards the finalisation of the amenments with an additional Board meeting scheduled for 28 August 2019.

The second phase of the project now added to the work plan deals with replacement issues (issues that might affect financial reporting when an existing interest rate benchmark is replaced). Deliberations have not begun yet and are currently expected to be taken up in Q3 2019.

ASAF meeting (mid blue) Image

Summary of the July 2019 ASAF meeting now available

12 Aug 2019

The IASB staff have published a summary of the Accounting Standards Advisory Forum (ASAF) meeting held in London on 11 and 12 July 2019.

The topics covered during the meeting were the following (numbers in brackets are ref­er­ences to the cor­re­spond­ing para­graphs of the summary):

  • Business combination under common control (1–12): The ASAF provided views related to the application of alternative approaches as well as how to apply a current value approach and predecessor approach.
  • Man­age­ment com­men­tary (13–26): The ASAF provided views on the staff’s proposals related to the notion of narrative coherence and identifying and reporting matters that could affect the entity’s long-term success.
  • IBOR reform (27–43): The ASAF provided information on the current state of interest rate benchmark reform in their jurisdictions and discussed their views on financial reporting issues discovered. The members also discussed how they should address the issues in phase II of the project.
  • Better communication — Primary financial statements (44–59):  The ASAF commented on possible approaches to structuring the new requirements. In addition, the members planned outreach events during the comment period.
  • Variable and contingent consideration (60–65) — The ASAF discussed the FRC’s project on the conceptual basis for transactions involving variable and contingent consideration.
  • Business reporting of intangibles: realistic proposals (66–70): The ASAF provided views on the FRC’s discussion paper and gave suggestions for developing FRC’s analysis on intangible assets.
  • Discussion Paper Accounting for Pensions Plans with an Asset-return Promise (71–73): The ASAF commented on the EFRAG’s discussion paper where they had mix views on the three accounting alternatives.
  • Updated and agenda plan (74–76): The ASAF discussed items to be added to the proposed agenda for the October 2019 ASAF meeting.

A full summary of the meeting is available on the IASB's website.

IASB (International Accounting Standards Board) (blue) Image

Interviews with new IASB members

08 Aug 2019

The IASB has released two short interviews introducing Tadeu Cendon and Rika Suzuki. Mr Cendon and Ms Suzuki were appointed to the IASB board by the Trustees of the IFRS Foundation in March 2019 for terms which began on 1 July 2019.

For more information, see the interviews with Mr Cendon and Ms Suzuki on the IASB website.

ITCG (IFRS Taxonomy Consultative Group) (mid blue) Image

IASB seeks candidates for IFRS Taxonomy Consultative Group

08 Aug 2019

The IASB is seeking candidates for membership to its IFRS Taxonomy Consultative Group. The group provides an advisory and review forum for members to actively assist the IASB in the maintenance and development of the IFRS Taxonomy and related activities.

The Board is keen to appoint members with professional experience as preparers or users of electronic financial reports prepared using the IFRS Taxonomy. Technical knowledge of XBRL is desirable, but not required. Applications are requested by 7 October 2019. For more information, see the press release on the IASB website.

IVSC (International Valuation Standards Council) (lt green) Image

IVSC Financial Instruments Board consults on future agenda

08 Aug 2019

The International Valuation Standards Council (IVSC) has published a consultation document seeking feedback regarding the approach its newly established Financial Instruments Board should take, and the prioritisation of that work.

The Standards Review Board of the IVSC recognised the need to develop guidance for the valuation of financial instruments and created IVS 500 as a holding chapter on financial instruments, which was initially released as part of IVS 2017.

In December 2018, the IVSC Financial Instruments Board was formed and met for the first time in April 2019. At that meeting, the Board agreed to significantly modify and enhance the existing financial instrument standard IVS 500 and, as a first step, to publish a consultation document to obtain feedback from stakeholders on how to modify and enhance the existing standard.

The consultation document now released solicits feedback about the valuation topics the IVSC and its newly established Board for financial instruments should address as part of its current agenda and additional financial instruments valuation topics that stakeholders feel should be prioritised or added to IVSC’s agenda.

Please click to access the consultation document through the press release on the IVSC website. Comments are requested by 19 September 2019.

IFRS for SMEs (mid blue) Image
SMEIG (SME Implementation Group) (mid blue) Image

SME Implementation Group publishes draft Q&A for comment

07 Aug 2019

The SME Implementation Group (SMEIG) has published a draft question and answer (Q&A) on the IFRS for SMEs.

The Q&A addresses the application of the undue cost or effort exemption for investment property on the date of transition to the IFRS for SMEs. The draft Q&A concludes that additional cost or effort due to the elapse of time between the date of transition and the date of preparing the first IFRS for SMEs financial statements is not considered.

Comments are requested by 7 October 2019. The draft is available on the IASB website.

IIRC (International Integrated Reporting Committee) (green) Image

Study into the uptake of integrated reporting

06 Aug 2019

The International Integrated Reporting Council (IIRC) has posted to its website a study 'Integrated Reporting and the Capitals’ Diffusion'. The study quantitatively analyses integrated reporting to determine the extent of diffusion of integrated reporting, the depth of integrated reporting adoption, and the extent and nature of the disclosure of multiple capitals.

The study was sponsored by the Autorité des Normes Comptables (ANC), the French standard setter, and was presented at the 8th Symposium on Accounting Research 2018 in Paris (a recording of the research forum is available here).

The project behind the study sought answers to the questions:

  • Where and by whom has integrated reporting been adopted?
  • To what extent has the International <IR> Framework been followed (‘depth’ of adoption)?
  • How are organisations reporting on the capitals?
  • Are integrated reporters using the GRI Standards too?

The research reveals that integrated reporting has matured into fast-paced diffusion around the world, but it also offers some interesting insights such as the fact that more developed countries are lagging in adoption, some companies developed integrated reports even before the International <IR> Framework was published, and the title ‘integrated report’ is not necessarily used - some integrated reports are labeled 'annual report' or 'sustainability report'.

Please click for the press release on the IIRC website, which offers a brief summary and access to the full report.

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

IPSASB review of developments 2017-2018

06 Aug 2019

The International Public Sector Accounting Standards Board (IPSASB) has published 'Delivering for the Future: IPSASB 2017-2018 Biennial Review'.

The publication summarises the IPSASB’s achievements, challenges, and key developments in 2017 and 2018 and can be downloaded from the IPSASB website.

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

IPSASB publishes proposed 'Improvements to IPSAS, 2019'

05 Aug 2019

The International Public Sector Accounting Standards Board (IPSASB) has published an exposure draft 'Improvements to IPSAS, 2018', which sets out proposed amendments to International Public Sector Accounting Standards (IPSAS) to address issues raised by stakeholders.

This year, the exposure draft does not include proposed amendments that aim at convergence with recent IASB amendments.

Candidates for such amendments would have the the IASB's Definition of Material (Amendments to IAS 1 and IAS 8) and Definition of Business (Amendments to IFRS 3), both issued in October 2018. However, on the definition of material the IPSASB decided not to amend the definition IPSAS 1 and IPSAS 3. Before making standards-level amendments the IPSASB will review the guidance on materiality in its own framework and in doing so will take account of the IASB’s amendments.

On the definition of a business the IPSASB decided not to amend the definition of an operation in IPSAS 40 (which draws on the definition of a business in IFRS 3) as the definition in IPSAS 40 applies to amalgamations as well as to acquisitions while some of the additional guidance in IFRS 3 would only be relevant to acquisitions. The modifications that would be needed to ensure that this guidance does not apply to amalgamations would go beyond the remit of the improvements project. A separate narrow scope project to evaluate the potential impact of the IASB’s revised definition of business on IPSAS 40 may be considered in the future.

Please click to access the exposure draft Improvements to IPSAS, 2019 on the IPSASB website. Comments are requested by 30 September 2019.

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