IFRS Newsletter - January 2016
- IFRS Updates
- Update on New Leases standard (IFRS 16)
- Spotlight on application of IFRS 15
- ESMA communications
Welcome to this first 2016 edition of the IFRS Newsletter of Deloitte Luxembourg, which will update you on the latest IFRS developments.
Following is a summary of the topics comprised in the newsletter:
Thinking forward to the preparation of your 2015 financial reporting for the period/year starting 1 January 2015, this Newsletter includes a reminder of the amended accounting standards that are now effective. Also, we will outline the amendments issued by the IASB around IFRS 10, IFRS 12 and IAS 28 which is of particular interest in Luxembourg considering the importance of investment entities and group accounting:
- IFRS 10, IAS 2(2011) dealing with the ‘Sale or contribution of assets between an investor and its joint venture or associate’ – to note the endorsement of this amendment was postponed and
- IFRS 10, IAS 28 IFRS 12’ Investment entities: Applying the consolidation exception ‘
The complete list of standards and amendments which were issued, but not endorsed by the European Union, can be found on the EFRAG site.
Update on New Leases standard (IFRS 16)
Deliberations by International Accounting Standards Board (IASB) on the new accounting model for leases are completed and the final standard (that will replace IAS 17) has been issued. This newsletter highlights the principal effects this standard may have for entities, such as the requirement to bring leases onto the balance sheet.
Spotlight on application of IFRS 15, ‘Revenue from contracts with customers’
The new revenue recognition standard issued in May 2014 introduces far more prescriptive guidance than was included in IAS 18, IAS 11 and the related interpretations. In July 2015, IASB has decided to defer the effective date of IFRS 15 to January 2018. We encourage you to perceive this delay as additional time to use for the analysis of the impact of the implementation of the standard, rather than delaying the assessment of the implementation.
In 2014 IASB and FASB have jointly set up a transition resource group for revenue recognition, the TRG. The aim is to share their views in stakeholder issues arising from the implementation of the new guidance, while the FASB and the IASB determine what action shall be taken consequently. A summary of discussed topics can be found on the IASB website, we will share the matters we found most relevant in this newsletter.
End of October of 2015, the European Securities and Markets Authority has released several press releases covering the quality of information in the financial statements:
- Common enforcement priorities for 2015 financial statements
- Improvement of quality of disclosures in financial statements
- European common enforcement priorities for 2015 financial statements
- Improving Disclosures
In the light of most companies financial year end, we believe it is important to bear these enforcements in mind upon drafting financial statements. Even though directed at listed entities, we believe the communications indicate a best practice for all companies.
End of November 2015, ESMA published its 18th report, covering various topics, mostly on disclosures and use of judgement upon considering inputs for valuation and/ or impairment assessment analysis. We will focus in our newsletter on a short description of the latter.