The author of the report, who is the Founding Director of CDSB and responsible for CDSB’s work to develop a framework to report environmental information in mainstream corporate reports, examines the changing corporate sustainability reporting landscape, outlines its components, discusses current challenges and proposes development opportunities. She also considers the trends, levers and drivers influencing the reporting landscape and concludes that new and evolving expectations about corporate performance, new measurement criteria, and the means by which companies are assessed are calling into question the role of the corporation and the definition of corporate performance.

Please click to access the report on the ACCA website.

The SOCPA is currently working with the IFRS requirements extant at 31 December 2014. The modifications the SOCPA makes (if any) generally regard alternatives or options allowed by the IASB standards, additional disclosures, or Saudi specific factors (for instance replacing in IAS 41 all examples that are contradictory to Shariah (pigs, vines) with more suitable examples (cattle, olive trees)). The IFRS Foundation will review the magnitude of the modifications made after the completion of the whole project and will then decide on the status of Saudi adoption of IFRSs.

The standards reviewed by the SOCPA in the third phase are the following:

The newest issue of the SOCPA's newsletter مجلة المحاسبون ("Journal of Accountants") details the changes the SOCPA decided to make. Please click to access the newsletter on the SOCPA website and refer to pages 16-24 (bilingual table).

Mrs Santana is a former Chair and President of the Brazilian Securities and Exchange Commission and Ms Wood is a former Chairman of the Australian Financial Reporting Council and member of the Foreign Investment Review Board.

Please click to access the press release on the IASB website.

The forum provided attendees with the opportunity to discuss current IPSASB projects with the board’s members and staff:

• Social benefits;
• Revenues;
• Non-exchange expenses;
• Heritage assets;
• Infrastructure assets;
• Public sector measurement; and
• Leases.

Additionally, issues outside of the IPSASB work plan were also discussed:

• “IPSAS lite” (IPSAS for small and medium-sized entities);
• Tax expenditures;
• Natural resources accounting;
• Consolidation;
• Financial performance measures;
• Service performance reporting; and
• Implementation issues.

Based on the success of the inaugural event, the IPSASB is planning a second forum. This is to be held in Zurich, Switzerland July 3-4, 2017.

Please click for the press release on the event including a short video on the IPSAB website.

Mr Hoogervorst encouraged the academic community to continue providing the Board with its research; he noted that cooperation in the past has been very effective in helping the Board “separate out evidence from opinion.” He cited lease accounting, the IFRS 8 post-implementation review, and comment letter submissions as examples of effective cooperation between academia and the IASB, and he invited academics to become even more involved in years to come.

In the second half of his speech, Mr Hoogervorst discussed non-GAAP measures and explored “whether IFRS Standards provide sufficient criteria by which performance can be judged by users of financial statements.” He noted the increasing use of non-GAAP measures and research showing that these measures are becoming increasingly misleading. Mr Hoogervorst said:

The fact is that IFRS Standards prescribes very little in the way of formatting the income statement. Companies have considerable freedom in the way they present the components of income that make up profit or loss. As a result, there is little comparability above the bottom line, making it difficult for users to judge performance.

He went on to say that securities regulators are primarily responsible for cutting back the use of non-GAAP measures but that the IASB “should also look at its own role in this matter.” He admitted that the IASB provides “too little guidance” in formatting the income statement. He also suggested “potential remedies” for IASB consideration:

• Defining more subtotals in the income statement;
• Providing a principle-based definition of operating income which does not allow for obfuscating restructuring or impairment charges;
• Creating a “rigorous definition” of earnings before interest and tax (EBIT);
• Looking for better solutions for some elements of income and expense that are currently parked in other comprehensive income;
• All of the above and more.

Mr Hoogervorst concluded:

[U]ltimately the number that counts most is the unadjusted bottom line, where all elements of income come together, both recurring items and exceptional items, whatever those may be. No-one can predict the extent to which seemingly extraordinary elements of income are recurring and not. That is why it is important that the bottom line is as inclusive as possible and that it shows everything, warts and all.

The full text of Mr Hoogervorst’s speech is available on the IASB’s website.

The amendments, which were issued in response to feedback received by the FASB–IASB joint revenue recognition transition resource group (TRG), include the following:

• Collectibility — ASU 2016-12 clarifies the objective of the entity’s collectibility assessment and contains new guidance on when an entity would recognise as revenue consideration it receives if the entity concludes that collectibility is not probable.
• Presentation of sales tax collected from customers — Entities are permitted to present revenue net of sales taxes collected on behalf of governmental authorities (i.e., to exclude from the transaction price sales taxes that meet certain criteria). A similar policy election does not exist under the IASB's new revenue standard, IFRS 15 Revenue from Contracts with Customers.
• Noncash consideration — An entity’s calculation of the transaction price for contracts containing noncash consideration would include the fair value of the noncash consideration to be received as of the contract inception date. Further, subsequent changes in the fair value of noncash consideration after contract inception would be subject to the variable consideration constraint only if the fair value varies for reasons other than its form. IFRS 15 does not prescribe the measurement date.
• Contract modifications at transition — The ASU establishes a practical expedient for contract modifications at transition and defines completed contracts as those for which all (or substantially all) revenue was recognised under the applicable revenue guidance before the new revenue standard was initially applied.
• Transition technical correction — Entities that elect to use the full retrospective transition method to adopt the new revenue standard would no longer be required to disclose the effect of the change in accounting principle on the period of adoption (as is currently required by ASC 250-10-50-1(b)(2)); however, entities would still be required to disclose the effects on preadoption periods that were retrospectively adjusted. IFRS 15 defines a completed contract as one for which an entity has transferred all goods or services identified in accordance with existing IFRS. IFRS 15 also provides an additional practical expedient that permits an entity electing the full retrospective method to apply IFRS 15 retrospectively only to contracts that are not completed contracts as of the beginning of the earliest period presented. No such expedient is included in Topic 606.

Last month, the IASB published final clarifications to its revenue standard, IFRS 15. The FASB’s ASU states:

Although the amendments in this Update are not identical, and some are incremental, to the amendments the IASB decided to make to its final standard, Clarifications to IFRS 15, the FASB expects that the amendments generally will maintain the convergence that was achieved with the issuance of Update 2014-09 and IFRS 15 by reducing the potential for diversity arising in practice. Significant diversity in application could substantially reduce the benefits achieved by converged guidance.

The amendments in this Update do not change the core principle for revenue recognition in Topic 606. Instead, the amendments provide clarifying guidance in a few narrow areas and add some practical expedients to the guidance. The amendments are expected to reduce the degree of judgment necessary to comply with Topic 606, which the FASB expects will reduce the potential for diversity arising in practice and reduce the cost and complexity of applying the guidance.

The ASU’s effective date and transition provisions are aligned with the requirements in the new revenue standard, which is not yet effective. For more information, see the ASU on the FASB’s website.