IFRS Newsletter - March 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.
Under its publication around enforcement priorities for 2016 financial statements, the European Securities and Markets Authority (ESMA) emphasizes that the areas of focus will constitute:
- Presentation of financial performance
- Financial instruments: distinction between equity instruments and financial liabilities
- Disclosures of the impact of the new standards on IFRS financial statements
These matters are described in detail under European common enforcement priorities for 2016 financial statements.
ESMA has also issued extracts from its enforcement database. We found that certain of these case studies would make an interesting read for IFRS users and have therefore summarized them below under Extract from the EECS’s Database of Enforcement.
We share with you an attention item over an IFRS 13 (Fair value measurement) topic: highest and best use.
We will then close with a short report over IFRIC proposed changes relating to the taxation: Uncertainty over Income Tax Treatments and a summary of the projects of the IASB.
Presentation of financial performance
In December the IFRS CoE has presented topics relevant for year-end closing. One of these topics has shifted more and more into the attention of regulators – the APM’s (Alternative Performance Measures). An APM is a non-GAAP financial measure.
Extract from the EECS’s Database of Enforcement
Below we summarized certain the topics we found interesting for IFRS users throughout the practice:
- Disclosure of amounts of significant categories of revenue
- Identification of unobservable inputs
- IFRS 10 Consolidated Financial Statements – determining whether an entity is an investment entity
IFRS 13- Fair value measurement: highest and best use
IFRS 13 determines the highest and best use which concept is applicable to fair value measurements of nonfinancial assets. It takes into account a market participant’s ability to generate economic benefits by using an asset in a way that is physically possible, legally permissible, and financially feasible.
Projects of the IASB
The following projects are already accepted by IASB and in drafting phase:
- Financial instruments with characteristics of equity – Exposure Draft issued
- Discount rates – Publish Research Summary within 6 months
- Share-based Payment- Exposure Draft issued
- Conceptual framework – revision expected early 2017
- Disclosure Initiative – Materiality Practice Statement – under finalization and Definition of materiality
- Insurance Contracts
The following projects are in the pipeline also:
- Primary financial statements – Exposure Draft expected in the second half of 2017
- Business Combinations under Common Control (BCUCC)- Discussion Paper expected in the second half of 2017
- Dynamic risk Management- Discussion Paper expected in the second half of 2017
- Goodwill & Impairment – Project has not yet reached decision making stage
- Disclosure Initiative: Principles of Disclosures- Exposure Draft expected the second quarter of 2017