Canadian regulator limits choices on adoption of IFRS 9

23 Mar 2017

The Canadian Office of the Superintendent of Financial Institutions (OSFI) has issued an advisory regarding a deferral of IFRS 9 application for life insurers.

In September 2016, the IASB issued Applying IFRS 9 'Financial Instruments' with IFRS 4 'Insurance Contracts' (Amendments to IFRS 4) providing two options for entities that issue insurance contracts within the scope of IFRS 4: the so-called overlay approach and the so-called deferral approach.

The OSFI has now decided that all regulated insurance companies that are eligible for the IFRS 9 deferral must use it. This way, OSFI ensures that all insurance companies eligible for the IASB deferral will adopt on the same date while fully respecting the IASB's scope. In the past, OSFI has repeatedly used the means of limiting choices or not permitting early adoption as a way of keeping the Canadian reporting landscape homogeneous and financial statements comparable.

Please click to access the notice on the OSFI website.

Recent sustainability and integrated reporting developments

23 Mar 2017

A summary of recent developments at the CSA, GRI, and SASB.

The Canadian Securities Administrators (CSA) have announced a project to review the disclosure of risks and financial impacts associated with climate change. The project will gather information on the current state of climate change disclosure in Canada and internationally as disclosure practices of public companies in relation to climate-related risks and financial impacts have attracted significant international attention in recent years with several voluntary disclosure frameworks available. Please see the press release on the CSA website for more information.

The Global Reporting Initiative (GRI) has published a linkage document showing how the GRI Standards can be used to comply with all aspects of the European Directive on the disclosure of non-financial and diversity information. The linkage document can be accessed on the GRI website.

The GRI has announced that translations of the GRI Standards into Indonesian, Japanese, Spanish, traditional Chinese, and Vietnamese are under way with final versions expected between April and June 2017. Translations into Arabic, French, German, Italian, Portuguese, and simplified Chinese are planned, however, GRI is still looking for sponsors and/or peer reviewers. More information is available on the GRI translations page.

The GRI Chief Executive and the Founder and CEO of the Sustainability Accounting Standards Board (SASB) have published a joint article explaing that rather than being in competition, GRI and SASB are designed to fulfill different purposes for different audiences with GRI standards designed to provide information to a wide variety of stakeholders and including a very broad array of topics and the SASB standards designed to provide information to investors and focusing on the subset of sustainability issues that are financially material. Please click to access the article on the GreenBiz website.

EFRAG is looking for new members

22 Mar 2017

The European Financial Reporting Advisory Group (EFRAG) has launched a call for expressions of interest for new member organisations.

The press release states that EFRAG particularly welcomes expressions of interest from organisations representing users of financial statements and from National Organisations in Southern, Central and Eastern European countries.

Member organisations decide on EFRAG’s governance and with EFRAG Board rotation set to take place later this year, new members would also partake in nominating candidates for the EFRAG Board and deciding on the composition of the Board.

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

IFRS Foundation conference on implementing IFRS 16

21 Mar 2017

The IFRS Foundation has announced an IFRS conference 'Implementing the IFRS 16 'Leases' requirements' in London on 9 May 2017.

The conference will cover the following:

  • Welcome by IASB Member Stephen Cooper
  • IFRS 16: An Overview
  • Talking about transition – Optons, decisions and what should you be doing now?
  • Panel discussion: Implementation – Hot Topics
  • Ratings and Valuations
  • Towards the effective date
  • Final Q&A and closing comments

More details are available on the conference website.

FSB letter to G20 Finance Ministers and Central Bank Governors stresses importance of climate-related financial disclosures

20 Mar 2017

In a letter to the G20 Finance Ministers and Central Bank Governors who met in Baden-Baden, Germany, on 17-18 March 2017, the Financial Stability Board (FSB) also identified new and emerging vulnerabilities that need to be adressed.

In this context, the FSB noted the work of the Task Force on Climate-related Financial Disclosures (TCFD) and added:

Access to better quality information on climate-related financial risks is essential to enable market participants to better understand and manage these risks. Without the necessary information, market adjustments to climate change could be incomplete, late and potentially destabilising.

The FSB pointed out that the TCFD issued a consultation document with recommendations on climate-related disclosures in December 2016 that would be followed by June 2017 (and thus in time for the July G20 meeting in Hamburg) by the final report offering "a solution by the market for the market".

Please click to access the full letter on the FSB website.

CAQ publishes report on enhancing financial reporting to fight fraud

20 Mar 2017

The Center for Audit Quality (CAQ) of the American Institute of Certified Public Accountants (AICPA) has released a report on addressing challenges for highly subjective and complex accounting areas as key for stemming fraud and reducing the number of restatements.

The report is based on two workshops held last year and contains several general recommendations as well as recommendations focused on revenue recognition accounting policies.

General accounting policies and procedures:

  • Accounting policies must adhere to technical accounting guidance. It is critical that these policies be understandable to non-accountants who may not be conversant in the nuances of technical accounting.
  • Accounting policies must be reviewed at regular intervals and companies should have a process to identify and monitor changes in activities that have a potential impact on accounting.
  • Policies must be tested in the field prior to implementation, and then monitored for compliance post-implementation.

Revenue recognition accounting policies and procedures:

  • The revenue recognition policy should be granular, because even slight differences in interpretation can have a major impact on revenue recognition.
  • Where possible, contract terms should be standardised and reflect how transactions at a contract level relate to the requirements of accounting standards.
  • Deviations from typical contract terms that have implications for revenue recognition should be well documented.
  • Clear responsibility and communication lines among legal, business, and finance should be created so that all key players understand and approve of transactions.

The report also includes some recommendations about internal control over financial reporting.

Please click to access the report on the CAQ website.

Finance for the Future Awards — open for entries

17 Mar 2017

The Finance for the Future Awards, founded by ICAEW and The Prince’s Accounting for Sustainability Project (A4S), were first awarded in 2012 to highlight the essential role that finance plays in integrated thinking and building sustainable business models. One of the awards is for ‘Communicating integrated thinking’.

The award is for organisations that are demonstrating clearly, through communicating to their providers of financial capital, how sustainability, in its broadest sense, is embedded into their overall strategy and decision making process and how this ‘integrated thinking’ is contributing to a sustainable business model which delivers long term value. In this context, integrated thinking is seen as coming before reporting with reporting being the end result from this process and a way to communicate progress to the outside world.

In order to be considered for the award, entrants must submit three years of annual reports and financial statements and at least one specific example of communication to demonstrate:

  • How they have communicated to their providers of financial capital that wider factors, such as environmental and social issues, are embedded into their strategy and operations and how they are critical to the long term sustainability of the business, and how this has been done across a range of communications.
  • The communication truly reflects the way their organisation is managed and the integrated thinking within it.
  • What role the finance function played in the process of embedding and communicating integrated thinking.
  • Why they believe that communicating integrated thinking is beneficial to their organisation.

The Finance for Future awards, which are awarded in partnership with Deloitte, are open to all organisations, globally, whether listed, small or public sector.

For further information on the awards and how to enter by 31 May click here.

Four reappointments made to the IFRS Interpretations Committee

15 Mar 2017

The IFRS Foundation has announced the reappointment of four members of the IFRS Interpretations Committee. The Interpretations Committee is the interpretative body of the IFRS Foundation.

The Trustees of the IFRS Foundation have reappointed Carl Douglas, Mikael Hagström, Bruce Mackenzie, and Bonnie Van Etten to the IFRS Interpretations Committee for a second three-year term beginning on 1 July 2017.

For more information, see the press release on the IASB's website.

IFRS 2017 'Red Book' now available

14 Mar 2017

The International Accounting Standards Board (IASB) has announced that the 2017 edition of the Bound Volume of International Financial Reporting Standards (the 'Red Book') is now available.

eIFRS Professional and Comprehensive subscribers can now access the electronic files of the 2017 IFRS 'Red Book' via eIFRS (you will be required to provide your login details).

The Red Book is also available through the IASB's Web Shop. Copies are priced at £75 each, plus shipping.

Correction list for hyphenation

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