IFRS-Update

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

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!

103 - Beyond the GAAP - 09-2016

The IASB’s update to its work plan on 23 September 2016
gives us a good idea of what is on the cards for IFRS over the
next few months. In addition to the Insurance Contracts
standard, which is scheduled for publication in March, and
the Conceptual Framework (date not yet set), the next key
milestones relate to research projects. Discussion Papers
have been announced on business combinations under
common control, dynamic risk management, financial
instruments with characteristics of equity, and rateregulated
activities.
As well as these new long-term projects, the IASB has
confirmed that it will publish interpretations on uncertainty
over income tax treatments, and on foreign currency
transactions and advance consideration. Then it will be time
for the Post-implentation Review of the consolidation
standards and of IFRS 13.
With no major changes scheduled over the next few years,
following the implementation of IFRS 9, IFRS 15 and IFRS 16,
the IASB, in the immediate future, will focus on maintenance
of standards, through minor amendments, interpretations,
annual improvements and decisions by the IFRS IC.
Enjoy your reading!

102 - Beyond the GAAP - 07+08-2016

The IASB’s major projects are drawing towards their
conclusion. Since 2014, the IASB has published standards on
revenue, financial instruments and leases, and it is expected
to complete the Insurance Contracts project and the
Conceptual Framework by the end of 2017.
We now turn to the European endorsement process and the
work of enforcers. IFRS 15 and IFRS 9 are scheduled for
endorsement by the European Commission before the end
of the year, and ESMA has published recommendations for
disclosures on the IFRS 15 transition process. A similar
publication relating to IFRS 9 is expected.
In addition to its major projects, the IASB is continuing with
its maintenance of existing standards. In this issue, Beyond
the GAAP focuses on the proposed amendments to IFRS 3
following the Post-implementation Review of the Business
Combinations standard.
Welcome back and happy reading!

101 - Beyond the GAAP - 06-2016

“You have been living in a bit of a building site for much of
the last decade. However, the good news is that the majority
of the structural work is now complete. The heating and
plumbing systems are now in good shape.” With these words
Hans Hoogervorst described his impression of the progress
made in recent years at the start of the IFRS Foundation
Conference in Zurich.
On the eve of his second term of office as chairman of the
IASB, he outlined what will be the central theme of the next
five years: the development of IFRSs to provide ‘Better
Communication’.
The Disclosure Initiative and the materiality Practice
Statement are crucial to this objective. There will be further
work on the format of financial statements and performance
measurement, and on definitions for the most common
aggregates, such as operating income or EBIT.
There will also be a consideration of electronic reporting
needs, and the IASB will take a look at the role it should play
in non-financial reporting.
While the coming years are unlikely to be marked by projects
on the scale of those which have now been completed, they
should see more subtle changes to the standards, whose
importance should not be understated.
Enjoy your reading!

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