Since November 2006 we regularly provide updates on changes within the International Financial Reporting Standards (IFRS).

114 - Beyond the GAAP 09-2017

After a quiet summer on the accounting front, September started brightly with two exposure drafts and a Practice Statement from the IASB.
With the imminent approach of the effective date of IFRS 15, our first special study updates our benchmark (see Beyond the GAAP no 109 of March 2017) on the disclosures published by leading European entities on their implementation of the standard at 30 June 2017.
Enjoy your reading!

113 - Beyond the GAAP 07+08-2017

July was a busier period for Europe than for the IASB. The European Commission sent two draft texts (deferred application of IFRS 9 for insurers and financial conglomerates, and IFRS 16 on Leases) to the European Parliament and Council for endorsement before the end of the year, while ESMA published three documents on financial information and its enforcement activities.

Meanwhile the IASB confirmed the IFRS IC’s tentative decision on the modification of financial liabilities under the new IFRS 9. The Interpretations Committee had expressed some doubts at its last meeting in the light of the comments received. The far-reaching impacts of this decision are discussed in this edition’s special study.
All the team at Beyond the GAAP hope you have had an enjoyable break and welcome you back to work after an August free of any accounting news!

Enjoy your reading!

112 - Beyond the GAAP 06-2017

June 2017 saw the publication of IFRIC 23 – Uncertainty over Income Tax Treatments. According to this Interpretation, entities must now assume that any uncertainty over income tax treatments will be examined by the taxation authorities, and must consider the probable outcome of such examination when determining the amount of income tax to be recognised in the financial statements.

As we come up to the interim closing of accounts, we review the financial reporting on the implementation of IFRS 9 published by industrial and commercial companies at year-end 2016. This is a timely reminder that the effective date of the new standard is just over the horizon, and regulators are expecting more detailed financial reporting at 30 June 2017!

Finally, the IASB’s website www.ifrs.org got a facelift in June. Unfortunately for regular readers of our newsletter, this means that the links included in issues prior to no. 111 (May 2017) will no longer work. However, all the relevant information on topics we have covered recently has been transferred to the new site, or will appear there in the near future.

Enjoy your reading!

111 - Beyond the GAAP 05-2017

IFRS 17 – Insurance Contracts has been in the pipeline for more than ten years, and finally made its appearance during the night of 16 to 17 May 2017. On 17 May, the IASB hosted two interactive webinars on the standard, and launched a dedicated webpage to support implementation. IFRS 17 will replace the interim standard IFRS 4 from 2021, meaning insurers will no longer be able to use local accounting frameworks for insurance contracts. The new standard is therefore likely to cause substantial upheaval, with impacts varying significantly from one company to another.

On the maintenance side, the IASB has also launched the Post-implementation Review of IFRS 13, which relates to fair value measurement (although it does not cover the circumstances in which fair value applies). Finally, our traditional summary of applicable standards and interpretations shows that there have been few changes in the first half of the year.

Enjoy your reading!

110 - Beyond the GAAP - 04-2017

For the second time in its history, the IASB has launched a rapid-turnaround consultation with a comment period of just 30 days – the minimum permitted by its Due Process Handbook. What is more, it once again relates to financial instruments. The IASB is rushing it through in the hope that the document will be ready for first-time application alongside IFRS 9 in 2018. It is touch and go, as the basic principle needs to be approved by stakeholders and the amendments then need to go through the EU adoption process!

This hustle and bustle forms a sharp contrast with the time spent by the IASB on the quality and volume of the financial information disclosed in accordance with IFRS. This month’s feature takes ‘A Closer Look’ at the development of financial information disclosure principles, announced by the IASB in May 2013. The document comprises almost a hundred pages, and stakeholders have a six-month comment period to formulate their thoughts.

Enjoy your reading!

109 - Beyond the GAAP 03-2017

While they do not form an official part of the IASB’s Disclosure Initiative, the amendments proposed to IFRS 8 on operating segments are certainly in the same spirit. With this consultation, and the consultation around the discussion paper on Principles of Disclosure, the IASB has started the ball rolling for the 2017 round of deliberations on the theme of Better Communication. In Europe, the recently published standard on leases has just completed the first stage of the adoption process, EFRAG having just issued a recommendation for rapid endorsement to the European Commission.

The publication of the 2016 financial statements was an opportunity to analyse the information provided by entities about how they are implementing IFRS 15 on Revenue from Customers, in particular in light of the expectations expressed in summer 2016 by the market regulators While the level of information disclosed is varied, some trends are starting to emerge, and you can read about these in our study!

Enjoy your reading!

108 - Beyond the GAAP - 02-2017

IASB Vice-Chair Sue Lloyd has been appointed to head the IFRS Interpretations Committee, and four IASB members who supported the recent major standards have been re-appointed for a second term. This underscores the IFRS Foundation’s commitment, going forward, to the implementation of standards and to supporting their consistent application. This commitment appears necessary in the context of the implementation of the recent major standards, but older standards that continue to raise numerous issues should also benefit from it.

Enjoy your reading!

107 - Beyond the GAAP - 01-2017

After a pause of several months, the IASB has started the year by presenting its annual improvements in a short exposure draft, with the next consultations expected as of April. It is also continuing to offer support on new standards, publishing an article on IFRS 16 – Leases, noting in passing that there are some decisions to be taken and judgments to be made, and urging entities not to delay the launch of their transition process.
For its part, ESMA has published extracts from its enforcement database for the 20th time, bringing the number of decisions published up to a total of 223 over a little more than a decade. This month’s special study takes a look at the recent work from the IFRS Interpretations Committee on foreign currency transactions and advance consideration, to enable our readers to get to grips with any changes that will apply to them.
Enjoy your reading!

105 - Beyond the GAAP- 11-2016

The adoption of IFRS 9 by the European Union marks the end
of the work carried out by EFRAG under the leadership of
Françoise Flores, coincidentally falling at the same time as
her appointment as a member of the IASB. This appointment
will maintain a French presence on the Board, following the
end of Philippe Danjou’s term last October.
Françoise Flores joins the IASB just as the finishing touches
are being put to the future IFRS 17 – Insurance Contracts
standard as well as to the Conceptual Framework, which will
provide the foundation for future standard-setting projects.
After this, the IASB will begin a new chapter, focusing on
better communication in financial reporting. It will focus
particularly on the presentation of financial performance, a
topic that will surely be of interest to all stakeholders.
However, no major new standards are scheduled for the
coming years.
While IFRS 15 and IFRS 9 do not become mandatory until
2018, in this issue we also list the new standards,
amendments and interpretations that are applicable for the
2016 financial statements.
Enjoy your reading!

104 - Beyond the GAAP- 10-2016

Improving the effectiveness of financial reporting is one of the IASB’s key focal areas for the coming years. Four projects fall under the theme of “Better communication”, including the Disclosure Initiative and a research project on the format of primary financial statements.

ESMA’s recommendations for 2016 financial statements echo this project, with a strong focus on the need for consistency between the performance measures used in the financial statements and those used in other financial communications. In the wake of ESMA’s Guidelines on Alternative Performance Measures coming into effect, the regulator also encourages issuers to ensure that APMs used are useful and relevant.

The regulator also discusses the issue of sub-totals that are not required under IFRSs. It emphasises that labels must be clear and accurately reflect the items grouped under that sub-total. The underlying data should be consistent with the principles of IFRSs, notably the principle of faithful representation. There are plenty of issues here that could usefully be included in the IASB’s research project on the format of financial statements.

Enjoy your reading!