The year began quietly with few major developments relating to standards, but March has seen a whole series of projects coming to fruition. Some of these are highly concrete, with three very detailed decisions published by the IFRS IC on the application of IFRS 15, which we explore in our ‘A Closer Look’ feature. Others are much more conceptual, such as the publication of the IFRS Conceptual Framework, and still others are forward-looking and are prompted by the European Union’s action plans on sustainable development and the fitness of public reporting by companies.
With less than a year to go before the effective date of IFRS 16 on Leases, the report of the ANC’s (The French accounting standards setter) decisions on the duration of 3/6/9 leases, published in February, is certainly the most anticipated announcement for French entities. This is because it should enable most of them to resolve this thorny question in their plans for implementation. This decision will of course also be useful to entities with subsidiaries in France.
Since 1 January 2018, IFRS 9 - Financial instruments and IFRS 15 - Revenue from Contracts with Customers have been effective, as the the IASB headline announced on its website on 8 January. In parallel, work to assess the impact of IFRS 9 on long-term investment is continuing at the European level, with the publication of the outcomes of a first factual analysis by EFRAG. This research has also acted as a spur to the IASB, which has followed up the EFRAG publication by issuing two presentations of its own on the contributions of IFRS standards to financial stability and long-term investment.
The last quarter has yielded a significant number of changes in the international tax landscape. These have ranged from domestic changes to withholding tax treatments, to the publication by the European Commission of draft directives on the taxation of the digital economy.
2017 ended fairly quietly, since the European Commission had already endorsed several texts in November and the IASB’s December meeting decided to postpone publication of most of its texts and draft texts, with the exception of the annual improvements to IFRSs, which we discuss in this month’s ‘A closer look’ study. This being the case, the implementation of IFRS 9 and IFRS 15 in January 2018 will be more than enough to keep entities and their auditors busy, on top of the preparation of the 2017 financial statements.
Over the past decade, the IASB has been working on the process of converging IFRS with US GAAP, and this month saw EU endorsement of the remaining resulting standards. With implementation now set to go ahead, this marks the end of a chapter. The one remaining major standard awaiting endorsement – namely IFRS 17 - Insurance Contracts – was not a joint project with the FASB, and moreover is not scheduled for endorsement until the end of next year.
The IASB has put some last-minute finishing touches to IFRS 9, with an amendment on debt instruments with symmetric prepayment options and with the inclusion (in the Basis for Conclusions) of its analysis of the standard’s provisions on the modification of financial liabilities. All that remains is for the European Union to accelerate the endorsement of the amendment so that European entities do not have to switch accounting policies between 2018 and 2019!
After a quiet summer on the accounting front, September started brightly with two exposure drafts and a Practice Statement from the IASB.
In our series of regular newsletters, we will provide you with insights on current topical tax issues and discuss how they will affect you. In this edition, we are delighted to include content from Mazars in South America, Asia and Europe.
July was a busier period for Europe than for the IASB. The European Commission sent two draft texts (deferred application of IFRS 9 for insurers and financial conglomerates, and IFRS 16 on Leases) to the European Parliament and Council for endorsement before the end of the year, while ESMA published three documents on financial information and its enforcement activities.