report on standard-setting activities - mary tokar, iasb
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The views expressed in this presentation are those of the presenter, not necessarily those of the International Accounting Standards Board (the Board) or IFRS Foundation. Copyright © IFRS Foundation. All rights reserved
IFRS® Foundation
International Accounting Standards Board:
Current projects and new standards
Mary Tokar, IASB® Member March 2017
Supporting implementation – changes ahead 3
2016 2017 2018 2019
Revenue
Financial Instruments
Leases Insurance
Conceptual Framework
7 3 4 Maintenance amendments
What is required when?
Supporting implementation 4
Major new standards • Transition/ Implementation Resource Groups • Overview and training materials • Webcasts • Dedicated web page of resources
5 Implementation – supporting major new standards
IFRS 9 – Financial Instruments
IFRS 15 – Revenue
IFRS 16 – Leases
Implementation page
go.ifrs.org/IFRS9-implementation
go.ifrs.org/IFRS15-implementation
go.ifrs.org/IFRS16-implementation
Dedicated email
ITG@ifrs.org revenuetrg@ifrs.org leases@ifrs.org
Webcasts
Conferences
Maintenance supports consistent application
International Accounting Standards Board (the Board) and IFRS Interpretations Committee • IFRS Interpretations Committee
– Interpretation of IFRS Standards – Recommendation to the Board for targeted
amendments – Agenda decision with educational material
• Post-implementation reviews
• Coordination with IOSCO C1
• Working with national standard setters
• Education initiative – Conferences – Webcasts – Training materials
Maintenance of existing IFRS Standards 6
Maintenance
IASB Standard-setting activities 7
Major projects
Standards
• Conceptual Framework • Insurance • Materiality Practice Statement • Rate-Regulated Activities
Research
• Principles of Disclosure (‘POD’) • Primary Financial Statements • Business Combinations under Common Control • Dynamic Risk Management • Financial Instruments with Characteristics of Equity • Goodwill and Impairment
Research pipeline
• Equity Method • Pollutant Pricing • Provisions • Extractive Industries • Variable and Contingent Consideration • Feasibility studies for narrow projects (pensions,
hyperinflation, SMEs that are subsidiaries)
8 The refocused research programme Projects
Primary financial statements
Principles of disclosure
Business combinations under common control
Dynamic risk management
Financial instruments with characteristics of equity
Goodwill and impairment
Share-based payment (2016)
Discount rates (2016)
9 Research pipeline Projects
Equity method (for associates and joint ventures)
Extractive activities
Pollutant pricing mechanisms
Provisions
Variable and contingent consideration
Feas
ibilit
y st
udie
s High inflation, rather than hyperinflation
Pensions: benefits that depend on asset returns
SMEs that are subsidiaries
Materiality: Non-mandatory IFRS Practice Statement 10
Single assessment of materiality applied to financial statements as a whole
Focus on materiality process, and the factors to consider in making materiality judgements
Discuss application of materiality to (a) Errors, (b) Covenants and (c) Interim financial reports
No new interpretations
Next steps: Final Board discussions December 2016, publication mid 2017
Materiality Practice Statement—the Board’s tentative decisions 11
Requirements of IFRS Standards
Knowledge about primary users'
common information needs
Qualitative factors
Entity-specific and External
Quantitative factors
Organise the information
within the draft financial
statements
Step 1 Identify potentially material information
Step 2 Assess whether information identified is material
Step 3 Organise
Step 4 Review
Review the draft financial
statements
13 13
Appendix Recently and near-final major projects
Copyright © IFRS Foundation. All rights reserved
14 14 Recent Standards
Standard Issued Effective
IFRS 9 Financial Instruments
2014 2018
IFRS 15 Revenue from Contracts with Customers
2014 (clarifications
2016) 2018
IFRS 16 Leases
2016 2019
15 15 Financial Instruments
Classification and measurement • A logical, single classification approach
for financial assets driven by cash flow characteristics and business model
• Improvements to own credit
Impairment • Strongly supported forward-looking
‘expected loss’ model • Represents a significant change in
accounting
16 16
• Establishes a single, comprehensive framework for recognising revenue from contracts with customers
• Provides clearer guidance on recognising revenue than was previously available
• Means that revenue reporting will be consistent across transactions, industries and capital markets
• Improves comparability in the ‘top line’ of financial statements
Revenue
17 17 Leases
Main change • All leases on the balance sheet
(except for short-term leases and leases of low-value assets)
Main benefits • Increases transparency • Improves comparability • Limits need for adjustments
18 18
Upcoming Standard: insurance contracts
Improved quality
Improves relevance and transparency by providing information about:
• the effect of insurance contracts on financial performance;
• sources of profits or losses through underwriting activity and investing premiums from customers; and
• the nature and extent of risks from insurance contracts.
Improved comparability
Easier to make comparisons between insurance contracts and other types of contracts. Replaces variety of accounting treatments with one consistent approach.
19 19 What is the Conceptual Framework?
• For the Board in setting IFRS Standards • For preparers in developing accounting policies • For other interested parties in understanding and interpreting IFRS Standards
• What is the objective of financial reporting? • What makes financial information useful? • What are assets, liabilities, equity, income and expenses; when should they be
recognised and derecognised; how should they be measured, presented and disclosed?
• The Board may depart from aspects of the Conceptual Framework but will have
to explain any such departures in the Basis for Conclusion of the respective IFRS Standard
It provides a consistent theoretical foundation
It addresses fundamental issues
It is not an IFRS Standard and it does not override IFRS Standards
20 6 Contact us 20
Keep up to date
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www.ifrs.org
IFRS Foundation
@IFRSFoundation
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