International headlines. Improvements to IFRS 8. Please click to access the following documents: IFRS 1: Subsidiary as a first-time adopter

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1 IFRS Global Office November 2017 IFRS on Point Financial Reporting Developments and Information: November 2017 International headlines Deloitte IFRS communications and publications Comment letters Effective dates International headlines November 2017 meeting of the IASB Board The IASB Board met on 14 November The agenda included the following topics: Dynamic Risk Management: Outline of the proposed DRM accounting model and next steps Improvements to IFRS 8 Primary Financial Statements: Presentation of an investing category in the statement(s) of financial performance, definition of finance income/expenses, better ways to communicate other comprehensive income Wider corporate reporting, including a proposal to revise the Management Commentary Practice Statement Please click to access the following documents: The IASB Update on the IASB website Agenda and related agenda papers on the IASB website Updated workplan of the IASB Podcast on the deliberations at the November Board meeting Detailed notes taken by Deloitte observers on the IASPlus website November 2017 meeting of the IFRS Interpretations Committee The IFRS Interpretations Committee met 20 November The following issues were on the agenda: IFRS 1: Subsidiary as a first-time adopter For more information please see the following websites: IAS 1/IFRS 9: Presentation of interest revenue for particular financial instruments IFRS 3: Acquisition of a group of assets

2 IAS 37: Costs considered in assessing whether a contract is onerous IFRS 15: Revenue recognition in a real estate contract that includes the transfer of land IFRS 15: Right to payment for performance completed to date Please click to access the following documents: The IFRIC Update on the IASB website Agenda and related agenda papers on the IASB website Detailed notes taken by Deloitte observers on the IASPlus website October 2017 meeting of the IFRS Advisory Council The IASB has published the report of the meeting of the IFRS Advisory Council held on October Among others, the following topics were on the agenda: The effect of technology on the future of accounting, corporate reporting and the IFRS Foundation The key messages embodied in the recently released Better Communication report The Trustees reputation survey (held in private session) Please click to access the report on the IASB website. October 2017 meeting of the GPF The IASB has published the summary of the meeting of the Global Preparers Forum (GPF) held on 4 October The following topics were on the agenda: IASB Update ED Property, Plant and Equipment Proceeds before Intended Use (Proposed amendments to IAS 16) Reputation Survey ED Definition of Material ED Accounting Policies and Accounting Estimates (Amendments to IAS 8) Please click to access the summary on the IASB website November 2017 meeting of the ITCG The IFRS Taxonomy Consultative Group (ITCG) met on 30 November The following topics were on the agenda. IFRS Taxonomy content updates ITCG technical review of Inline XBRL illustrative examples Technical review of the IFRS Taxonomy The Preparer s guide to using the IFRS Taxonomy Please click to access the agenda and related agenda papers on the IASB website. 2

3 October 2017 meeting of the ITCG The IASB has published the summary to the IFRS Taxonomy Consultative Group (ITCG) meeting held on 11 October The following topics were on the agenda: Update on upcoming IFRS Taxonomy activities Proposed new data model for defined benefit plans Progress on the IFRS Taxonomy filing profiles project Please click to access the summary on the IASB website. IFRS Foundation publishes proposed updates to the IFRS Taxonomy The IFRS Foundation has published a proposed IFRS Taxonomy Update to reflect changes to the IFRS Taxonomy 2017 resulting from annual improvements. Comments are requested by 29 January Please click to access the press release and the proposed Taxonomy Update on the IASB website. December 2017 meeting of the ASAF The Accounting Standards Advisory Forum (ASAF) is meeting on 7 and 8 December The agenda includes the following topics: Academic liaison Business combinations under common control Disclosure initiative Definition of material Disclosure initiative Principles of disclosure Improvements to IFRS 8 Information deficiencies and consolidated financial statements Post-implementation review of IFRS 13 Fair Value Measurement Primary financial statements Project updates and agenda planning Wider corporate reporting Please click to access the agenda and related agenda papers on the IASB website. September 2017 meeting of ASAF The staff of the IASB have made available a summary of the discussions of the Accounting Standards Advisory Forum (ASAF) meeting held on 28 September The following issues were on the agenda: Primary financial statements Rate-regulated activities Definition of a business Goodwill and impairment Project updates and agenda planning Please click to access the summary on the IASB website. 3

4 December 2017 meeting of the Emerging Economies Group The IASB s Emerging Economies Group (EEG) is meeting 4-6 December The agenda includes the following topics: Business combinations under common control Accounting for micro-entities Accounting for high-inflation IAS 12: Temporary differences on long-term non-depreciable assets Application of IFRS 17 Insurance Contracts in emerging economies Outreach event: Application of IFRS 17 Insurance Contracts Please click to access the agenda and related agenda papers on the IASB website. November 2017 meeting of the DPOC The Trustees of the IFRS Foundation met on 7-9 November However, only the meeting of the Due Process Oversight Committee (DPOC) on 7 November was open to public. The agenda of the DPOC meeting included the following items: Technical activities: Key issues and update Report on complaint about breach of due process Implementation activities for IFRS 17 Insurance Contracts Review of activities and functions of advisory groups Reporting Protocol: General reports Education material: Due process Proposal for review of the Due Process Handbook Please click to access the agenda and related agenda papers on the IASB website. IASB posts webcast on IFRS 17 As part of its series on the implementation of IFRS 17, the IASB has posted a webcast on recognition and derecognition requirements in IFRS 17 Insurance Contracts. Please click to access the webcast on the IASB website. IASB discusses investors reactions to IFRS 17 The IASB has issued an article by IASB board member Nick Anderson that discusses the top five questions of investors and analysts with respect to IFRS 17 Insurance Contracts. The five questions are as follows: 1. Will IFRS 17 affect dividend payouts? 2. How can a principle-based Standard like IFRS 17 improve comparability between insurers? 3. Will IFRS 17 bring global comparability to the insurance sector? 4. What are the main differences between IFRS 17, regulatory reporting and embedded value reporting? 5. How will removing insurance premiums from the income statement improve comparability? Please click to access the article on the IASB website. 4

5 IASB Chairman comments on the IASB s role in wider corporate reporting In a speech given at a Brazilian international accounting seminar held on 9 November in São Paulo, the IASB Chairman Hans Hoogervorst discussed the IASB s present initiative on better communication in financial reporting, support of implementation and application of IFRSs, and the IASB s role in reporting that goes beyond the financial statements. Please click to access the full text of Mr Hoogervorst on the IASB website. IASB Research Forum The IASB hosted its fourth Research Forum on 28 and 29 November The papers presented addressed the following topics: The impact of accounting standards on pension investment decisions Gaps in the IFRS Conceptual Framework Articulation, profit or loss and OCI in the IASB Conceptual Framework: Different shades of clean (or dirty) surplus Making deferred taxes relevant Introducing More IFRS Principles of Disclosures Will the poor disclosers improve? The case studies presented addressed the following topics: Financial instruments with characteristics of equity Part A Overview Financial instruments with characteristics of equity Part B Examples What is interest in EBIT? Please click to access the papers and case studies on the IASB website. IPSASB issues revised cash basis IPSAS and exposure draft on accounting for social benefits The International Public Sector Accounting Standards Board (IPSASB) has published a revised IPSAS, Financial Reporting under the Cash Basis of Accounting. The revised IPSAS takes effect on 1 January 2019, with earlier adoption encouraged. The IPSAS has also has published an exposure draft to address public sector reporting on social benefits. Comments on the ED are requested by 31 March Please click to access the following documents on the IFAC website: The press release announcing the publication of the revised IPSAS and the revised IPSAS The press release announcing the publication of the ED and the ED ACCA report on current status of IPSAS adoption The Association of Chartered Certified Accountants (ACCA) has released a report on the current status and challenges in connection with the adoption of International Public Sector Accounting Standards (IPSASs). Please click to access the report on the ACCA website. Autumn 2017 IFASS meeting The International Forum of Accounting Standard Setters (IFASS) has made available a report on the discussion held at its meeting on 26 and 27 September The agenda of the meeting included the following items: Cooperation of IFASS participants BCUCC: Mergers & Acquisitions : The premise for separate accounting methods 5

6 Wider corporate reporting: Ways forward for IASB & NSS? Research on pensions: Hybrid plans Interpretation issues regarding IAS 24 Related Party Disclosures and IAS 12 Income Taxes Please click to access the report on the IASPlus website. ESMA publishes 21st enforcement decisions report The European Securities and Markets Authority (ESMA) has published extracts from its database of enforcement decisions taken by European national enforcers. The decisions, covering the period from June 2015 to February 2017, address the following topics: Country risk premium in impairment tests Assessment of joint control Valuation and equity method for participation with restrictions Restatement of comparative amounts Disclosures on a reverse factoring transaction Assessment of control over investment funds Fair value measurement disclosures of unobservable inputs Recognition and measurement of the proceeds from an arbitration agreement Impairment test of trademarks Recognition of deferred tax assets for carry forward of unused tax losses Definition of economic environment and separation of foreign-currency embedded derivatives in a power contract Please click to access the full report and the updated list of all enforcement decisions ever published on the ESMA website. EU endorsement process The EU has published Commission Regulations endorsing IFRS 16 Leases, Recognition of Deferred Tax Assets for Unrealised Losses (Amendments to IAS 12), Disclosure Initiative (Amendments to IAS 7), Clarifications to IFRS 15 Revenue from Contracts with Customers, and Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts (Amendments to IFRS 4). The text adopted for the IFRS 4 amendments includes a top up that allows a financial conglomerate to elect that none of its entities operating in the insurance sector apply IFRS 9 in the consolidated financial statements for financial years that begin before 1 January 2021, where certain conditions are met. Please click to access the Commission Regulations in the Official Journal of the European Union. The European Financial Reporting Advisory Group (EFRAG) has issued positive endorsement advices on Prepayment Features with Negative Compensation (Amendments to IFRS 9) and IFRIC 23 Uncertainty Over Income Tax Treatments, confirming its preliminary assessment that they meet all technical endorsement criteria of the IAS Regulation and are conducive to the European public good. Please click to access the following documents on EFRAG website. Endorsement advice letter and press release related to the amendments to IFRS 9 Endorsement advice letter and press release related to IFRS 23 6

7 In developing its endorsement advice to the European Commission on IFRS 17 Insurance Contracts, EFRAG plans to undertake a detailed case study on the anticipated impact of IFRS 17 on a sample of European insurance groups that apply IFRS Standards under the provisions of the IAS Regulation. EFRAG is calling for volunteers to participate in the case study and is seeking the participation of a range of entities involved in providing insurance. Please click to access the related press release on EFRAG website (the deadline for expressions of interest in participating in the study is 8 December 2017). EBA stress test methodology The European Banking Authority (EBA) has published its final methodology for the 2018 EU-wide stress test. The methodology covers all relevant risk areas and, for the first time, incorporates IFRS 9 accounting standards. The stress test exercise will be formally launched in January 2018 and the results are to be published by 2 November Please click to access the press release on the EBA website. 7th ANC Symposium on Accounting Research The Autorité des Normes Comptables (ANC), the French standard setter, will host its 7th Symposium on Accounting Research on 11 December 2017 in Paris, under the general theme Accounting and digitalisation. Please click to access the programme of the symposium on ANC s website. HKICPA and OIC investor survey The Standard Setting Department of the Hong Kong Institute of Certified Public Accountants (HKICPA) and staff of the Organismo Italiano di Contabilità (OIC) are conducting a survey to understand whether investors evaluate the underlying substance of mergers and acquisitions under common control and mergers and acquisitions with third parties differently. The findings of the survey will help determine whether all mergers and acquisitions should be accounted and reported in the same way. Please click to access the survey on the HKICPA website (deadline for participation is 28 February 2018). Australian Accounting Standards Board Research Forum The second research forum of the Australian Accounting Standards Board (AASB) was held on 24 November The event focused on effective communication of financial and narrative reporting. The following research papers were presented: Is financial reporting still an effective tool for equity investors in Australia? Recognition, measurement and disclosure of intangibles The communication of accounting information in summary financial reports Please click to access the papers and the other presentations from the forum on the AASB website. AAOIFI issues final standard on impairment and credit losses The Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI), the Islamic international autonomous non-for-profit corporate body that prepares accounting, auditing, governance, ethics and Sharia a standards for Islamic financial institutions and the industry, has issued FAS 30 Impairment, Credit Losses and Onerous Commitments. This standard is not converged with the corresponding requirements in IFRS 9 Financial Instruments. It is effective for financial periods beginning on or after 1 January Please click to access the related press release on the AAOIFI website. Presentations at ISAR 34 The United Nations Conference on Trade and Development (UNCTAD) Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting (ISAR) held its 34 th meeting on 1-3 November The agenda of the meeting included the following items: Accounting development tool implementation experiences 7

8 Accounting and reporting by micro, small and medium-sized enterprises as a means towards financial inclusion Enhancing comparability of sustainability reporting: selection of core indicators for company reporting on the contribution towards the attainment of the sustainable development goals The role of disclosure in risk assessment and enhancing the usefulness of corporate reporting in decisionmaking Recent developments on financial and non-financial reporting and their implication for the sustainable development goals Enhancing comparability of sustainability reporting: selection of core indicators for company reporting on the contribution towards the attainment of the sustainable development goals On the day before the ISAR meeting there was a workshop on practical implementation of IPSAS. Please click to access the presentations from the IPSAS workshop and the 34th ISAR session. Recent sustainability and integrated reporting developments A new project Management commentary (Wider corporate reporting) has been added to the IASB s agenda. The aim of the project is to review and update the Management Commentary Practice Statement issued in 2010 to help address the lack of alignment and integration between wider corporate reporting and financial reporting. Please click to access the related project page on the IASB website. Accountancy Europe has published Member State Implementation of the Directive 2014/95/EU, a report developed by CSR Europe and the Global Reporting Initiative (GRI) with the support of Accountancy Europe. The publication provides a comprehensive overview of how Member States are implementing the EU Directive on Non-financial and Diversity Information. Please click to access the publication on Accountancy Europe website. GRI announced that Eric Hespenheide, former Deloitte Partner, has been appointed as the Chairman of the GRI Board of Directors, effective 1 January Please click to access the related press release on the GRI website. The International Auditing and Assurance Standards Board (IAASB) has agreed to collaborate with the World Business Council for Sustainable Development (WBCSD) to strengthen international assurance standards on sustainability reporting. Please click to access the related press release on the WBCSD website. The Carbon Disclosure Project (CDP) has released additional national editions of its 2017 Climate Change report which analyses data disclosed by companies. Please click to access the following individual reports on the CDP website: China (in the Chinese language) DACH Germany, Austria, Switzerland (in the German language) Ireland Korea (in the Korean language) United Kingdom Back to top 8

9 Deloitte IFRS communications and publications Issuance Date 14 November 2017 Description IFRS model financial statements 2017 Appendix 2: Early application of IFRS 15 Revenue from Contracts with Customers Back to top Comment letters Description Receiving party Date issued/ Comment deadline Comment letters issued Comment letters pending IFRS 15, Revenue recognition in a real estate contract IAS 28, Contributing property, plant and equipment to an associate ED: Definition of Material (Amendments to IAS 1 and IAS 8) ED: Accounting policies and estimates (Amendments to IAS 8) IFRS IC 20 November 2017 IFRS IC 20 November 2017 IASB 15 January 2018 IASB 15 January 2018 Back to top Effective dates Click here for upcoming and recent effective dates. Back to top 9

10 Key contacts Global IFRS Leader Veronica Poole IFRS Centres of Excellence Americas Canada Mexico United States Karen Higgins Miguel Millan Robert Uhl mx ifrs iasplus Asia Pacific Australia China Japan Singapore Anna Crawford Stephen Taylor Shinya Iwasaki James Xu ifrs Europe Africa Belgium Denmark France Germany Italy Luxembourg Netherlands Russia South Africa Spain United Kingdom Thomas Carlier Jan Peter Larsen Laurence Rivat Jens Berger Massimiliano Semprini Eddy Termaten Ralph Ter Hoeven Maria Proshina Nita Ranchod Cleber Custodio Elizabeth Chrispin ifrs ifrs Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee ( DTTL ), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as Deloitte Global ) does not provide services to clients. Please see for a more detailed description of DTTL and its member firms. Deloitte provides audit, consulting, financial advisory, risk management, tax and related services to public and private clients spanning multiple industries. Deloitte serves four out of five Fortune Global 500 companies through a globally connected network of member firms in more than 150 countries bringing world class capabilities, insights, and high quality service to address clients most complex business challenges. To learn more about how Deloitte s approximately 225,000 professionals make an impact that matters, please connect with us on Facebook, LinkedIn, or Twitter. This communication contains general information only, and none of Deloitte Touche Tohmatsu Limited, its member firms, or their related entities (collectively, the Deloitte Network ) is, by means of this communication, rendering professional advice or services. Before making any decision or taking any action that might affect your finances or your business, you should consult a qualified professional adviser. No entity in the Deloitte Network shall be responsible for any loss whatsoever sustained by any person who relies on this communication For information, contact Deloitte Touche Tohmatsu Limited. Designed and produced by The Creative Studio at Deloitte, London. J14383