Annual IFRS Update Seminar 22-23 March 2017 Day 1 Introduction to GCC VAT: GCC VAT Framework Agreement -rated and Standard VAT -GCC supply of goods & services Compliance requirements -flow and other issues IFRS 9 Financial Instruments (with focus on the impairment model) The IFRS 9 standard is now finalized. We will go through IFRS 9 and build up the landscape including a comparison to existing rules under IAS 39. Due to it s utmost importance, we will focus on the impairment model that will be a main concern for all entities transiting to IFRS 9. The changes in the classification of the financial assets The new approach of classification The FCTOCI category for equity instruments The business model test and the cash flow test for debt instruments The FVTOCI category for debt instruments All Rights Reserved EY IFRS Update Seminar 2017 1
Overview of financial liabilities and the own credit risk Changes in measurement (special emphasis on non listed equity instruments) The Expected Credit Loss (ECL) model General approach and loss allowance 12 month vs. lifetime expected loss Measurement of ECL Presumptions and simplification in the calculation The simplified method for specific items Transition to IFRS 9 Application date Transition rules Identified difficulties The application of IFRS 9 with IFRS 4 Special exemption for insurers Who is eligible and who is not for this exemption IFRS 13 Fair value measurements This standard was with us for several years now. Given the time passed it is a great chance to summarize the accumulated experience and revisit the rules of this standard. The concept of fair value The assumptions behind fair value calculations Fair value of non-financial assets and financial assets and liabilities Fair value hierarchy Valuation techniques in large Selected disclousres Improvements in other standards Some of the standards were modified during the recent years. We will look at those narrow scope modifications and look at the impact of the changes. All changes will be illustrated through case studies. Acquisition of interest in a joint operation (IFRS 11) Sale or contribution of asset between an investor and its joint venture Equity method in the separate financial statements (IAS 27R) The investment entity exemption (IFRS 10, IAS 28) Transfer of investment Property (IAS 40) Disclosure initiative (IAS 1 and IAS 7) Recognition of deferred tax assets for unrealized losses (IAS 12) New interpretations of the IFRIC IFRIC 21 Levies A new interpretation about levies was introduced. We go through the interpretation showing you how to deal with these issues. All Rights Reserved EY IFRS Update Seminar 2017 2
IFRIC 22 Foreign currency transactions and advance consideration Foreign exchange rate differences for certain items raised questions. This IFRIC discusses the treatment of those differences. We will look at the problem covered through case studies. Overview of the expected changes in IFRS There are several project ongoing at IASB, planning to change certain areas of accounting significantly. The main changes will be discussed briefly to raise awareness. Conceptual Framwork Application of Materiality to Financial Statements (Practice Statement) Disclosure of materiality (expected modifications to IAS 1 and IAS 8) Insurance contracts (expected replacement of IFRS 4) Day 2 IFRS 16: An introduction to the IASB s new leases standard, and discussing the requirements A major criticism of the current accounting regulation of leasing is that it is possible to engage in off-balance sheet financing with operating leases. We will go through the new accounting landscape for leases and discuss why off-balance sheet financing will become more difficult and discuss the deliberation on the potential new standard. How to identify a lease Underlying asset concept Identified asset concept Changes in the key terms of the lease Conceptual changes in the classification for the lessee The unified lease concept Short term leases and low value asset leases Other classification rules and traps Conceptual changes in the recognition for the lessee Lessor s accounting Measurement rules of the leases, focusing on new items to be included in the lease payemts The application of the changing lease term What is included in the lease payments The variable elements What the impacts will be on lessees financial statements When IFRS 16 will apply and how to transition to it IFRS 15 revenue from contracts with customers The existing rules on revenue recognition in IAS 11 and IAS 18 and some IFRICs are sometimes accused of being lacking in detail. We go through the new IFRS standard with examples as to what guidance will We will also cover the current thinking of the Joint Transition Resource Group for Revenue Recognition (TRG) Identifying the contract, combination of contracts (definition, existence, combining contracts) All Rights Reserved EY IFRS Update Seminar 2017 3
The performance obligation (PO) approach (the unit, identification, combination/separation, specific POs) The transaction price (measurement, variable vs. fixed revenues, measurement approaches specific issues) Allocation of the transaction price (PO approach, allocation methodology, hierarchy) Recognition of the revenues (point in time vs. over the time, principle vs. agent) Issues identifies by the TRG Group Contract enforcibility Termination clauses Series of distinct goods and services Variable consideration Significant financing component Consideration payable to customer Measuring progress when multiple goods and services are combined in a single PO Presentation All Rights Reserved EY IFRS Update Seminar 2017 4
EY Assurance Tax Transactions Advisory About EY EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com. The MENA practice of EY has been operating in the region since 1923. For over 90 years, we have grown to over 6,000 people united across 20 offices and 15 countries, sharing the same values and an unwavering commitment to quality. As an organization, we continue to develop outstanding leaders who deliver exceptional services to our clients and who contribute to our communities. We are proud of our accomplishments over the years, reaffirming our position as the largest and most established professional services organization in the region. 2017 EYGM Limited. All Rights Reserved. ED None This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax or other professional advice. Please refer to your advisors for specific advice. ey.com/mena
Registration form Annual IFRS Update Seminar: 22-23 March 2017 Please fax this form to EY Training, Kuwait: + 965 2245 6419 or email to: ey.training@kw.ey.com. For more courses please visit our website: www.eytrainingcenter.com For further details please contact Dileta Crasto: 2295 5014/5033 Person nominating: I wish to reserve place(s) for the above course. Name:.... Telephone no:..... Position:... Email:..... Company:. Address:. Names of participant(s) Email Mobile no. Designation 1 2 3 Registration fee (per participant) Is KD325 which includes: Course material Lunch and other refreshments EY training certificate Special group rates Book three places and get a 10% discount Book six places and pay for five An invoice with all payment details will be send upon receipt of registration form. Payment must be received in full prior to the course start. Course venue: To be decided Date: 22-23 March 2017 Time: 9:00 a.m. 4:30 p.m. Cancellation policy A full refund less an administration fee of KD50 will be given for cancellation requests received up to 5 working days before the event. Cancellations must be made in writing (letter/fax/email) and reach our office before the 5 working days deadline. Delegates who cancel less than 5 working days before the event, or who don t attend, are liable to pay the full course fee, and no refunds can be given. However, if you wish to attend a subsequent scheduling of the course, and you have paid your course fee in full, you will only be invoiced for 25% of that course fee. Replacement participants are always welcome. Ernst & Young Consultancy Co.WLL,Waleed Abdullah Saoud Al Osaimi & Partner 18-20 Floor Baitak Tower, Safat Square, Ahmed Al Jaber Street P.O. Box 74, 13001 Safat, Kuwait Phone: 22955000 Fax: 22456419 EY Assurance Tax Transactions Advisory 2017 EYGM Limited. All Rights Reserved. ey.com/mena