IFRS Newsletter - July 2017
Welcome to this edition of the IFRS Newsletter prepared by the Deloitte Luxembourg IFRS Centre of Excellence. We are happy to update you on IFRS matters we found relevant.
IFRIC proposed changes relating to the taxation: Uncertainty over Income Tax Treatments
IFRIC previously published the draft Interpretation to provide guidance when there is uncertainty over income tax treatments.
This came as a response to the question when the recognition of a current tax asset is appropriate, if tax laws require an entity to make an immediate payment in respect of a disputed amount.
International Practice Task Force
The task force discussed the three-year cumulative inflation rates for certain countries. Those countries with three-year cumulative inflation rates exceeding 100% are considered as being in a state of hyperinflation. The following countries are considered highly inflationary: Malawi, South Sudan, Sudan, Venezuela and Ukraine. We are focusing on the two last countries.
IAS 1 Disclosure Initiative
Disclosures have significant importance as they provide information about the key judgements and estimates made when providing financial statements. IAS 1 provides two distinct requirements in relation to these judgements and estimates made by management which have the most significant effect on the amounts recognized in the financial statements.
- Disclosure Initiative - Background:
The Disclosure initiative consists of a number of implementation (first two) and research projects.
- Next steps:
A Discussion Paper has been issued by the IASB as part of its Disclosure Initiative.
Expected Credit Loss calculation
IFRS 9 highlights that the point-in-time probability of default should be used in the ECL calculation.
ESMA recent activities update
Below we have summarized certain the topics we found interesting for IFRS users throughout the practice as per the Enforcement and Regulatory Activities of Accounting Enforcers in 2016 the European Securities and Markets Authority (ESMA) published on 10 April 2017:
- Impact of the financial markets conditions on financial statements
- Statement of cash flows and related disclosures
- ESMA Statement on implementation of IFRS 9 and IFRS 15
Projects of the IASB
The following projects are accepted by IASB or still under discussion in the period between April and June 2017:
- Insurance Contracts
- Fees included in the '10 percent' test for the purpose of derecognition
- Amendments to IAS 19 and IFRIC 14
- Amendments to IFRS 3 and IFRS 11
- Definition of a Business
- Amendments to IAS 28- Long-term interests in associates and joint ventures
- Leases- Implementation update
- Goodwill and impairment
- IAS 8 Accounting policies, changes in accounting estimates and errors- Accounting policy changes resulting from agenda decisions