"Beyond the GAAP" Newsletter
Beyond the GAAP no.56 - May 2012
There are not very many new standards for mandatory application to the 2012 reporting period, which is welcome news at the time when half-yearly accounts are under preparation. Only the IFRS 7 amendment on disclosures on financial assets may prove complex to apply.
Beyond the GAAP no.55 - April 2012
Financial instruments were in the spotlight in April! The two Boards continued their progress on the proposed “expected loss” impairment model for financial assets (Phase II of IFRS 9/Impairment), and in particular clarified how the expected loss estimate should be determined. The Boards also reached an agreement on the definition of a business model which would permit measuring financial assets at amortised cost, and on bifurcation of embedded derivatives (Reopening of Phase I of IFRS 9/ Classification and measurement).
Beyond the GAAP no.54 (English) - March 2012
At the end of March, the IASB updated its work plan, once again postponing the publication of documents relating to the joint projects on Financial Instruments and Leases. In the case of Financial Instruments, publication of the Review Draft on hedge accounting and the Discussion Paper (or exposure draft, depending on the IASB’s final decision) on macro-hedging have been put back to the second quarter and second half of 2012, respectively.
Beyond the GAAP no.53 (English) - February 2012
At the time of writing this editorial, the IASB Update – the official publication reporting on Board meetings – had not yet been published, as the IASB’s last meeting spanned the end of February and the beginning of March. As a result, it is difficult for us to report on the Board’s provisional decisions, given that the subjects discussed were particularly complex and open to interpretation.
Beyond the GAAP no.52 (English) - January 2012
It is already clear that 2012 will be a crucial year for the IASB. During the course of this year, the final texts of the joint projects on financial instruments, revenue recognition, leases and insurance contracts should all be published. Much is thus expected of the IASB.
Beyond the GAAP no.51 (English) - December 2011
The year just ended should have seen the publication of the final standards for the joint projects on financial instruments, revenue recognition, leases and insurance contracts. None of them have appeared! The second exposure draft on revenue recognition has only just been published, while redeliberations are continuing on leases, financial instruments and insurance contracts. The delay is due to the magnitude of the task and the criticisms which greeted some of the IASB’s initial proposals. Over the course of the year, the IASB has repeatedly revised its work plan and deferred the publication date of the new standards, which are now expected in 2012. It remains to be seen whether this new target is achievable!
Beyond the GAAP no.50(English) - November 2011
The 2011 reporting date is drawing near! It is likely to be a tricky exercise, not because of the new accounting standards but because of the sovereign debt crisis. More than ever, issuers must be meticulous in their valuations and the quality and clarity of the information they publish. Meanwhile the IASB continues working on its major projects, as witnessed by the publication of the second exposure draft on revenue recognition.
Beyond the GAAP no.49 (English) - October 2011
No matter who you are, the sovereign debt crisis cannot have escaped your notice, having become a regular feature in the daily press and the focus of attention around the globe. News from the accounting world does not always command the same interest! However, the IASB is making progress with its work, laying the groundwork today for the accounting standards of tomorrow.
Beyond the GAAP no.48 (English) - September 2011
Hardly had Hans Hoogervorst taken up his position at the head of the IASB than he had put his stamp on the institution. His position on the provisioning of exposure to the Greek risk by banks and insurers expresses a wish to ensure that IFRSs are applied consistently in the world. This concern is not new in principle, but it is so in form!
Beyond the GAAP no.47 (English) - July / August 2011
The IASB is struggling to make the hoped-for progress on the projects on its work plan. Hence, after revenue recognition in June 2011, the IASB has decided this month to publish a new exposure draft on Leases. As for the Financial Instruments project, the redeliberations of the Impairment section have become increasingly complex and are also likely to result in a new exposure draft. Unless there is an agreement with the FASB, only limited amendments to IAS 32 on offsetting may eventually be published.
Beyond the GAAP no.46 (English) - June 2011
In June, the IASB was once again busy, with the publication of amendments to IAS 1, the standard IAS 19R and the fourth annual improvements exposure draft (after a pause in 2010). The IASB also announced the publication of a second exposure draft on the revenue recognition project, so that the definitive standard is now expected in 2012, though no precise date has been given. Finally, the impairment proposals in the IFRS 9 project will be the subject of a fresh call for comments. To think that only a few weeks ago these definitive standards were still expected by 30 June 2011!
Beyond the GAAP no.45 (English) - May 2011
The IASB published no fewer than six new standards in May: five relating to consolidation, and one on fair value measurement. This issue of Beyond the GAAP includes a study of IFRS 11 Joint Arrangements.
Beyond the GAAP no.44 (English) - April 2011
In April, the IASB and the FASB decided to postpone the target date for completion of the major convergence projects on revenue recognition, lease accounting, financial instruments and insurance contracts. The final standards in these areas are now officially expected to be published no later than 31 December 2011 instead of 30 June. This will allow the necessary time for further reflection and to improve consultations with stakeholders on sensitive issues.
Beyond the GAAP no.43 (English) - March 2011
As is clear from the updated IASB work plan, the second half of 2011 will be quite exceptional in the history of the international standard setter. No fewer than four new standards will be published, two will be amended and the final vote on the content of four future major standards will be taken.
Beyond the GAAP no.42 (English) - February 2011
February saw significant changes of direction in two key projects in the work plan for convergence between IFRS and US GAAP: the accounting treatment of leases and revenue recognition. During their redeliberations, and in the light of the comments they had received from stakeholders, the IASB and the FASB have very significantly amended some of the positions taken in the exposure drafts on these two projects.
Beyond the GAAP no.41 (English) - January 2011
It is already clear that 2011 will be a particularly important year in the history of the IASB. This year will see the SEC’s decision on whether IFRSs can be applied by American entities. The decision could lead to the end of US GAAP or disrupt the adoption of IFRSs at international level.
Beyond the GAAP no.40 (English) - December 2010
December 2010 saw the publication of the exposure draft on hedge accounting (proposals on macro-hedging will have to wait until 2011). The IASB should, for once, draw on fairly wide support. The proposals do aim to simplify hedge accounting and make it possible to hedge more risks.
Beyond the GAAP no.39 (English) - November 2010
In a joint declaration at the end of November, the IASB and FASB stated that they will ould henceforth focus all their efforts on the projects which they deem essential to achieving the convergence targets set by the G20 for June 2011. The two Boards will therefore pump their resources into the joint projects on financial instruments, revenue recognition, leases, presentation of OCI and fair value measurement over the coming weeks. Other priorities for the IASB include the projects on insurance contracts and consolidation. The IASB’s work plan has subsequently been updated to reflect these decisions.
Beyond the GAAP no.38 (English) - October 2010
In October, the IASB continued its work, often conjointly with the FASB, on a wide range of subjects, giving pride of place to the revision of IAS 39 and issuing additions to IFRS 9 for financial liability accounting.
Beyond the GAAP no.37 (English) - September 2010
On 17 August, the IASB brought the summer break to a premature halt with the publication of the long-awaited exposure draft on leases. If the Board’s proposals are finalised, all leases will have to be recognised in the lessee’s statement of financial position, regardless of whether it is an operating or a finance lease. The accounting treatment of leases is also drastically changed for lessors, whereas the discussion paper published in March 2009 only addressed the question of lessee accounting.