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News

ASBJ (Accounting Standards Board of Japan) Image

Joint goodwill research paper by ASBJ and HKICPA

24 Mar 2020

The Accounting Standards Board of Japan (ASBJ) and the Hong Kong Institute of Certified Public Accountants (HKICPA Staff) have jointly published a research paper 'Goodwill: Improvements to Subsequent Accounting and an Update of the Quantitative Study'.

The research paper presents recent results of quantitative studies on goodwill, updated from the ASBJ's 2016 quantitative study on goodwill. The standard-setters observe that it is likely that impairment losses on goodwill are recognised too late.

Based on this observation, the research paper discusses the subsequent accounting for acquired goodwill. It presents the conclusion that acquired goodwill should be amortised over time on a systematic basis, and the cash generating unit(s) to which acquired goodwill is attributed should be tested for impairment when there is an indication of impairment.

Last week, the IASB published a discussion paper on goodwill and impairment with the preliminary view that the Board should retain the impairment only approach because there is no compelling evidence that amortisation would significantly improve financial reporting.

Please click to access the research paper on the ASBJ website.

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IFRS Foundation appoints new IFRS Interpretations Committee member

23 Mar 2020

The Trustees of the IFRS Foundation have announced the appointment of Dr Jens Freiberg as IFRS Interpretations Committee member.

Dr Freiberg, Head of BDO Germany’s Accounting Advisory and Technical Accounting Groups, is a former member of the IFRS Advisory Council and was a member of the IFRS Committee of the German standard-setter DRSC. He is also a member of the TRG for IFRS 17.

The appointment, effective immediately, is until 30 June 2022.

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

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IASB releases podcast on IFRS 17

23 Mar 2020

The IASB has released a podcast featuring IASB member Darrel Scott and technical staff member Chalani Mohotti as they discuss the developments at the March 2020 Board meeting related to the amendments to IFRS 17 'Insurance Contracts'.

Specifically, the podcast discusses the Board’s decisions related to effective date of IFRS 17 and the expiry date of the IFRS 9 temporary exemption in IFRS 4.

The podcast can be accessed through the press release on the IASB website. Our summary of the meeting and the results of the IASB's votes is available here.

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Coronavirus crisis: Implications on reporting and auditing and resources for accountants

23 Mar 2020

Accountancy Europe has released an article exploring coronavirus’ effects. In addition, Accountancy Europe is collecting all resources relevant for European professional accountants.

Please click to access the following information on the Accountancy Europe website.

The article explores coronavirus’ effects on:

  • accounting and reporting for companies as of 31 December 2019,
  • accounting and reporting for companies with year-ends in 2020,
  • auditing financial statements on 31 December 2019 and beyond, and
  • practical matters for the audit of financial statements.

The list of resources relevant for European professional accountants will be updated regularly.

IASB (International Accounting Standards Board) (blue) Image

Updated IASB work plan — Analysis (March 2020)

21 Mar 2020

Following the IASB's March 2020 meeting, we have analysed the IASB work plan to see what changes have resulted from the meeting and other developments since the work plan was last revised in February 2020. Changes are few.

Below is an analysis of all changes made to the work plan since our last analysis on 28 February 2020.

Standard-setting projects

  • No changes

Maintenance projects

  • No changes - the work plan still shows final amendments to IAS 16 regarding proceeds before intended use to be expected in "March 2020"

Research projects

  • Goodwill and impairment — A discussion paper was published earlier this week; the feedback received will be discussed in the second half of 2020
  • Post-implementation Review of IFRS 10, IFRS 11 and IFRS 12 — due to the reduced agenda for the March meeting, the research review has been rescheduled to April 2020 (previously March 2020)

Other projects

  • IFRS Taxonomy 2019 — Update 1 Interest Rate Benchmark Reform (Amendments to IFRS 9, IAS 39 and IFRS 7) was published earlier this week and has therefore been removed from the work plan.

The above is a faithful comparison of the IASB work plan at 28 February 2020 and at 21 March 2020. For access to the current IASB work plan at any time, please click here.

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March 2020 IASB meeting notes posted

20 Mar 2020

The IASB met on Tuesday 17 and Thursday 19 March 2020, by video link. The meeting was cut to three topics because of the Covid-19 pandemic. We have posted our comprehensive Deloitte observer notes for all projects discussed during the meeting.

Rate-regulated Activities: The staff have been drafting the ED for the accounting model for regulatory assets and regulatory liabilities since last July. The Board decided to clarify whether some components included in the regulated rates in a period form part of total allowed compensation for the goods or services supplied by an entity in the same period or in a different period. In particular, the Board decided to clarify whether regulatory returns and performance incentives included in the regulated rates for a period form part of the total allowed compensation for to the goods or services supplied in the same period.

Management Commentary: The Board continued its discussions about the objective of management commentary, and decided that it should support primary users in assessing an entity’s prospects of future cash flows and assessing management’s stewardship of the entity’s economic resources. The primary users are existing and potential investors, lenders and other creditors and they are expected to have a reasonable knowledge of business and economic activities. The staff also introduced their thinking on developing disclosure objectives for various types of content to be included in management commentary.

Amendments to IFRS 17 Insurance Contracts: The Board decided to defer the effective date of IFRS 17 (incorporating the amendments) to annual reporting periods beginning on or after 1 January 2023 and to extend the fixed expiry date of the temporary exemption from applying IFRS 9 in IFRS 4 to the same date. The staff expect that the amendments will be issued in the second quarter of 2020.

Please click to access the detailed notes taken by Deloitte observers for the entire meeting.

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Japan updates list of 'designated' IFRSs

20 Mar 2020

The Financial Services Agency (FSA) of Japan has announced that additional IFRSs issued up until 31 December 2019 were designated for use by companies voluntarily applying IFRSs in Japan.

Newly added IFRSs are:

  • Interest Rate Benchmark Reform (Amendments to IFRS 9, IAS 39 and IFRS 7) (issued in September 2019).

For more information, see the press release (in Japanese only) on the FSA website.

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Agenda for the April 2020 ASAF meeting

20 Mar 2020

The International Accounting Standards Board (IASB) has released an agenda and meeting papers for the meeting of the Accounting Standards Advisory Forum (ASAF), which is to be held by remote participation on 2 April 2020.

The agenda for the meeting is summarised below:

Thursday, 2 April (11:00-15:30)

  • IBOR reform and its effects on financial reporting — Phase 2
    • ASAF members' initial views on the proposals in the exposure draft
  • Agenda planning
  • Goodwill and Impairment
    • Board’s preliminary views included in the discussion paper
    • ASAF members’ views on the feedback process for the discussion paper and areas of focus during the comment and outreach period
    • FASB presentation on the feedback received on the invitation to comment Identifiable Intangible Assets and Subsequent Accounting for Goodwill
    • Presentation by the ASBJ and HKICPA of their paper on accounting for goodwill
  • Primary financial statements
    • ASAF members' initial views on the proposals in the exposure draft

For more information, please see the agenda and meeting papers on the IASB's website.

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IFRS conference in Madrid

20 Mar 2020

The IFRS Foundation has announced that this year's European annual IFRS Foundation conference, which was to be held in Madrid on 29 and 30 June 2020, will be postponed.

The IFRS Foundation is currently reviewing how to deliver an alternative conference combined with the World Standard-Setters meeting in September 2020.

The announcement is available on the IASB website.

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IVSC issues statement on valuation during periods of market uncertainty

19 Mar 2020

In the context of the COVID-19 outbreak, the International Valuation Standards Council (IVSC) has issued a letter looking at valuation during periods of market uncertainty.

The letter notes that the COVID-19 outbreak and the resulting global pandemic have created a huge amount of uncertainty around the world. The enormous market volatility and the fact that valuers have to value assets when there is limited to no comparable evidence and all markets are facing an uncertain future, can make valuing challenging. The letter can be downloaded from the IVSC website.

The IVSC has also set up a resource page Covid-19: research, analysis and guidance for the valuation profession.

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