IASB Update - Jane Pike, IFRS

Download IASB Update - Jane Pike, IFRS

Post on 15-Apr-2017

272 views

Category:

Government & Nonprofit

0 download

TRANSCRIPT

Insurance IFRS 4 (phase II)

IASB UpdateProgress and plans IFRS Foundation | 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.orgJane Pike, Technical PrincipalMarch 2016

The views expressed in this presentation are those of the presenter, not necessarily those of the IASB or IFRS Foundation.International Financial Reporting Standards

1

2Recent IFRSs IFRS Foundation | 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.orgMajor ProjectsEffective dateIFRS 15 Revenue from Contracts with Customers1 January 2018IFRS 16 Leases1 January 2019

2

IFRS 15 Revenue from Contracts with Customers issued concurrently with the FASB in May 2014IASB deferred effective date to 1 January 2018 in Sept 2015Revenue Transition Resource Group supporting implementation37 submissions discussed at 4 meetings; 5 topics subsequently considered by IASB and FASBIASB will publish targeted clarifications to 3 topics in IFRS 15 plus additional practical expedients for transition in April 20163Revenue Recognition IFRS Foundation | 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org

3

IFRS 16 Leases issued in January 2016Effective date of 1 January 2019Main features:Lessee: All leases on-balance sheet (except for short-term leases and leases of small assets), interest and amortisation presented separately in income statementLessor: little change to existing accountingDecisions substantially converged with FASB Recognition of leases on-balance sheet; lease definition; liability measurement; little change to lessor accountingMain difference: recognition of lease expenses and cash flows 4Leases IFRS Foundation | 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org

4

5Major Standards-level projects IFRS Foundation | 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.orgMajor ProjectsInsuranceConceptual FrameworkDisclosure InitiativeRate-regulated Activities

5

Status: Board completed its discussions on the model for insurance contracts in February 2016Existing Standard allows a variety of approaches to be appliedMain decisions:A current measurement model for insurance contractsBased on expected future cash flowsSingle model for all contracts with a practical expedient for short term insuranceThe Board is targeting publication in early 20176Insurance IFRS Foundation | 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org

6

IFRS 4 / 9 interaction IFRS Foundation. 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org7

Flexibility of both IAS 39* and IFRS 4** results in little volatility in profit or lossInteraction of IFRS 9*** and IFRS 4 may result in increased volatility in profit or loss

Interaction of IFRS 9 and the new insurance contracts Standard assists in reducing that volatility in profit or lossIAS 39 + IFRS 4IFRS 9 + IFRS 4IFRS 9 + new insurance contracts StandardEffective date of IFRS 91 January 2018Effective date of the new insurance contracts Standard not before 2020?*IAS 39 Financial Instruments: Recognition and Measurement is pre-IFRS 9**IFRS 4 Insurance Contracts sets out the current accounting requirements for insurance contracts***IFRS 9 Financial Instruments

8What is the Conceptual Framework? IFRS Foundation. 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.orgThe Conceptual Framework is a set of concepts that can assist:the Board when developing or revising Standards preparers to develop accounting policiesothers to understand and apply Standards Not a Standard does not override any StandardConceptual Framework

conceptsIFRS Standards

8Improve: eg Elements definitions; fill gaps: eg Derecognition, measurementPrevious work with FASB, making use of what has been developed back in 2010The new Conceptual Framework will provide a coherent basis for developing future StandardsIt will help other parties to understand and interpret Standards and develop accounting policies

What did the Exposure Draft propose? IFRS Foundation. 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org9

Measurement guidanceRole of profit or loss and use of OCIPresentation and disclosure guidanceDerecognitionThe reporting entityFill Gaps

Recognition criteriaDefinitions of income and expensesUpdate

Definitions of assets and liabilitiesRole of prudence, stewardship and measurement uncertainty in financial reportingClarifyThe existing Conceptual Framework has proved useful but some improvements are neededED comment period ended 25 November 2015

Areas that needed updating: ElementsRecognition

Gaps:- measurement- Presentation & disclosure9

10Disclosure InitiativeOverview IFRS Foundation | 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.orgMaterialityDistinction between change in policy and estimateAmendments to IAS 7 debt reconciliationCompleted projectsAmendments to IAS 1Implementation projectsOngoing activitiesDigital reportingStandards level disclosure review/ drafting guidePrinciples of disclosureResearch Projects

10

Disclosure initiativeoverview contd. IFRS Foundation. 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org11

Not enough relevant informationToo much irrelevant information (overload)Poor communicationDisclosure problem?

Disclosure Initiative

Improved disclosuresEnabling preparer judgementPODIAS 1MaterialityBetter disclosure reqmentsIASB drafting guideTechnologyReview existing and proposed StandardsAddress individual disclosure issues

11

WhyConcern that materiality is not being applied well in practice.Key contributor to the disclosure problem.ResearchConsulted representatives of IOSCO and the IAASB.Review of how materiality is applied in different jurisdictions.Output Exposure Draft of an IFRS Practice Statement (PS) a non-authoritative form of guidance. The PS compliments the current guidance on materiality in IFRS Standards.The Final PS aims to assist managements use of judgement in making decisions about materiality when preparing financial statements.Materiality Practice Statement IFRS Foundation. 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org12

12

Status: Developing an accounting model to propose within a further Discussion Paper Today there are no standardised requirements for rate-regulated activitiesInterim relief for first-time adopters of IFRSIssued IFRS 14 Regulatory Deferral Accounts in Jan 2014Permits grandfathering of previous GAAP accounting practicesEnhanced presentation and disclosure mattersCurrent projectDiscussion Paper published September 2014Support for recognising some regulatory deferral account balances, focusing on a revenue-based approach13Rate Regulated Activities IFRS Foundation | 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org

13

14Research programme March 2016 IFRS Foundation | 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.orgAssessment stageDevelopment stagediscount ratesbusiness combinations under common controlgoodwill & impairmentprinciples of disclosureincome taxesdynamic risk managementpollutant pricing mechanismsequity methodpost-employment benefitsfinancial instruments with characteristics of equityprimary financial statementsOn holdprovisions, contingent liabilities and contingent assetsextractive activities; foreign currency translation and high inflationshare-based payment

14

IASB work plan

Details of all projects on the IASB work plan can be viewed at http://go.ifrs.org/IASB-Work-Plan

15 IFRS Foundation | 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org

16

Thank You IFRS Foundation | 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org

16

Recommended

View more >