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

119 - Beyond the GAAP - February 2018

With less than a year to go before the effective date of IFRS 16 on Leases, the report of the ANC’s (The French accounting standards setter) decisions on the duration of 3/6/9 leases, published in February, is certainly the most anticipated announcement for French entities. This is because it should enable most of them to resolve this thorny question in their plans for implementation. This decision will of course also be useful to entities with subsidiaries in France.

Europe is continuing its lengthy work on long-term investment and sustainable finance, with studies and consultations which could well eventually have impacts on the accounting and reporting frameworks of European entities. For its part, the IASB has held a first working meeting of the transition resource group supporting the implementation of IFRS 17, Insurance contracts.

Enjoy your reading!

118 - Beyond the GAAP - 01-2018

Since 1 January 2018, IFRS 9 - Financial instruments and IFRS 15 - Revenue from Contracts with Customers have been effective, as the the IASB headline announced on its website on 8 January. In parallel, work to assess the impact of IFRS 9 on long-term investment is continuing at the European level, with the publication of the outcomes of a first factual analysis by EFRAG. This research has also acted as a spur to the IASB, which has followed up the EFRAG publication by issuing two presentations of its own on the contributions of IFRS standards to financial stability and long-term investment.

At the last minute, 2017 witnessed the passing of a tax reform bill in the US, which is expected to have substantial impacts - to the extent that the US accounting authorities have published some texts intended to facilitate accounting for its effects, but which ESMA says are unacceptable under IFRSs. This month’s special study describes these aspects.

Enjoy your reading!

117 - Beyond the GAAP - 12-2017

2017 ended fairly quietly, since the European Commission had already endorsed several texts in November and the IASB’s December meeting decided to postpone publication of most of its texts and draft texts, with the exception of the annual improvements to IFRSs, which we discuss in this month’s ‘A closer look’ study. This being the case, the implementation of IFRS 9 and IFRS 15 in January 2018 will be more than enough to keep entities and their auditors busy, on top of the preparation of the 2017 financial statements.

This month’s crossword reviews the year’s accounting events! We’d like to take this opportunity to wish you a Happy New Year and a smooth passage to the new standards on behalf of all the team of columnists at Beyond the GAAP!

Enjoy your reading!

116 - Beyond the GAAP - 11-2017

Over the past decade, the IASB has been working on the process of converging IFRS with US GAAP, and this month saw EU endorsement of the remaining resulting standards. With implementation now set to go ahead, this marks the end of a chapter. The one remaining major standard awaiting endorsement – namely IFRS 17 - Insurance Contracts – was not a joint project with the FASB, and moreover is not scheduled for endorsement until the end of next year.

After summarising the regulators’ recommendations for you in last month’s issue, our ‘A Closer Look’ feature this month provides further assistance with year-end preparations. It presents our traditional overview of all the standards and interpretations applicable for 2017 financial statements.

Enjoy your reading!

115 - Beyond the GAAP - 10-2017

The IASB has put some last-minute finishing touches to IFRS 9, with an amendment on debt instruments with symmetric prepayment options and with the inclusion (in the Basis for Conclusions) of its analysis of the standard’s provisions on the modification of financial liabilities. All that remains is for the European Union to accelerate the endorsement of the amendment so that European entities do not have to switch accounting policies between 2018 and 2019!

In France and in Europe, the month of October has once again seen the regulators issue recommendations for the preparation of the 2017 accounts under IFRS. Their advice is the topic of one of this month’s two ‘A Closer Look’ studies. The other study concerns another aspect of the preparation of financial statements: guidance on making materiality judgments, the subject of an IASB Practice statement which was published last September.

Stop press: IFRS 16 on Leases, the clarifications to IFRS 15 on Revenue and the option for deferred application of IFRS 9 for insurers were endorsed by the EU on 9 November 2017.

Enjoy your reading!

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!