Monthly roundup - November 2013
Staying on top of financial reporting developments
November 2013 edition
Issued 09 December 2013
In this edition:
- Monthly highlights
- New pronouncements
- Standard setter meetings
- New Deloitte publications
- Other developments
IASB finalises IFRS 9 Chapter on general hedge accounting, allows for the new ‘own credit risk’ guidance to be applied in isolation and removes the mandatory effective date from IFRS 9
The International Accounting Standards Board (IASB) has published an amendment to IFRS 9 ‘Financial Instruments’ which introduces a new general hedge accounting model. This represents a significant milestone in the reformation of financial instrument accounting.
IAS 39 had long been criticised as being too rules-based and viewed by many as unnecessarily preventing hedge accounting from being applied in reasonable circumstances. This has led to more volatility in profit or loss from risk management activities. The new model represents a substantial overhaul of hedge accounting that will “enable companies to better reflect their risk management activities”, as Hans Hoogervorst, Chairman of the IASB has pointed out.
The amendments issued also introduced the so-called ‘own credit’ issue which allow entities to present changes in its own credit risk on liabilities that they have elected to measure at fair value, before applying any of the other requirements in IFRS 9 in other comprehensive income.
In addition to introduce a new general hedge accounting model, the IASB has removed the mandatory effective date for IFRS 9 as the impairment model is not yet finalised. However the option for early-adoption remains. Australian entities can refer to the AASB work program for the expected issuance date of the Australian equivalent pronouncement on IFRS 9 amendments.
Please click for:
(A listing of new accounting standards, interpretations, exposure drafts, discussion papers and similar documents issued during the month by the AASB and IASB/IFRIC, along with other IFRS-related documents by other bodies that may be of interest and related links to Deloitte publications and alerts. See also our What’s new in the December 2013 financial reporting cycle summary.)
Australian Accounting Standards Board (AASB)
|Pronouncement||Key dates||More information|
AASB 2013-8 Amendments to Australian Accounting Standards – Australian Implementation Guidance for Not-for-Profit Entities – Control and Structured Entities
The amendments provide significant guidance to assist not-for-profit entities in the private sector and in the public sector to apply AASB 10 Consolidated Financial Statements and AASB 12 Disclosure of Interests in Other Entities. The guidance does not amend or deviate from the principles underlying the Standards. The guidance illustrates the principles with a range of comprehensive examples.
|Effective for annual periods beginning on or after 1 January 2014||
AASB 2013-8 (PDF)
International Accounting Standards Board (IASB)
|Pronouncement||Key dates||More information|
Financial Instruments (Hedge Accounting and amendments to IFRS 9, IFRS 7 and IAS 39
|Mandatory effective date of
IFRS 9 has been removed. However, entities may still choose to early adopt IFRS 9.
Narrow-scope amendments to IAS 19 Employee Benefits entitled Defined Benefit Plans: Employee Contributions (Amendments to IAS 19)
The narrow scope amendments apply to contributions from employees or third parties to defined benefit plans. The objective of the amendments is to simplify the accounting for contributions that are independent of the number of years of employee service, for example, employee contributions that are calculated according to a fixed percentage of salary
|Applicable to annual reporting
periods beginning on or after 1 July 2014 with early adoption allowed.
(A listing of meetings of various standard setters during the month or where documents were issued during the month in respect of the previous month's meetings, with links to our analysis, agenda papers and so on)
IASB regular meeting
28 October – 1 November 2013
Topics discussed were as follows (click on the links for direct access to the Deloitte observer notes for that topic)
IFRIC regular meeting
12-13 November 2013
Key issues discussed include:
IASB regular meeting
20-23 November 2013
Topics discussed were as follows (click on the
|The AASB did not hold any regular standard setting meeting in November 2013|
(Key IFRS-related and other publications issued by Deloitte during the month, not covered elsewhere. You can find full details and back issues of our various publications by following these links: Accounting alerts, IAS Plus publications, IFRS in Focus Newsletters, Webcasts and Podcasts)
- IFRS in Focus — Hedge accounting reforms: A closer reflection of risk management (PDF) provides an overview of the IASB’s guidance on hedge accounting
- IFRS in Focus — Amendments to IAS 19 (2011) to clarify the accounting for contributions that are linked to service (PDF) outlines recent amendments to the accounting under IAS 19 (2011) ‘Employee Benefits’ for contributions from employees or third parties that are linked to service
- Deloitte has issued several IFRS industry insights that discuss the implications of the new IFRS 9 general hedge accounting model in various industries, include; consumer business industry, manufacturing industry, retail industry, travel industry, energy and resources, and financial services
- IFRS on Point — October 2013 (PDF) highlights critical IFRS-related financial reporting developments for the month
- IFRS Project Insight – Revenue recognition(PDF) reflect discussions at the October 2013 IASB meeting, which included constraint on estimates of variable consideration, implementation guidance for licences and collectability
- Deloitte's IFRS Global Office has issued updated versions of the IFRS compliance, presentation and disclosure checklist and the IAS 34 compliance checklist for 2013.
- Deloitte podcast on the new general hedge accounting model in IFRS 9 Financial Instruments.
Deloitte Comment letter
- Deloitte comment letter on IFRS Interpretations Committee agenda decisions on IAS 29, as published in the September IFRIC Update.
(A brief listing of other financial reporting developments during the month. A full summary of all IFRS-related developments can be found in our September historical summary on IAS Plus. You can also subscribe to our Deloitte IAS Plus RSS feed to be kept informed of developments as they happen)
International Accounting Standards Board
- The IFRS Foundation has announced the appointment of Maria Helena Santana and Lynn Wood as Trustees of the IFRS Foundation. Both replace retiring Trustees with similar background. The appointments will begin on 1 January 2014 and will expire on 31 December 2016 (IAS Plus article)
- The Trustees of the IFRS Foundation have announced the appointments of 14 new members to the IFRS Advisory Council (IAS Plus article)
- The International Accounting Standards Board (IASB) has issued 'Defined Benefit Plans: Employee Contributions (Amendments to IAS 19 'Employee Benefits')'. The amendments clarify the requirements that relate to how contributions from employees or third parties that are linked to service should be attributed to periods of service (IAS Plus article)
- The International Accounting Standards Board (IASB) has published its next scheduled batch of editorial corrections for 2013. The corrections impact the IASB's “A Guide Through IFRS 2013”, “2013 IFRS (Blue Book)”, and “2013 IFRS (Red Book)” (IAS Plus article)
- The IASB has updated its work programme as at 26 November 2013.
Other global news
- This sustainability and integrated reporting update provide a brief overview of recent topics related to sustainability reporting and integrated reporting with a focus on a FAQ on sustainability reporting, International Integrated Reporting Council (IIRC) developments, and a recent United Nations Environment Programme Finance Initiative (UNEP FI) conference (IAS Plus article)
- The European Financial Reporting Advisory Group has released an updated endorsement status report to reflect the recent issue by the International Accounting Standards Board (IASB) of amendments to IAS 19 'Employee Benefits' (IAS Plus article)
- The Global Reporting Initiative (GRI) has announced several new developments on the “G4 Online” tool, monitoring program, G4 XBRL taxonomy, and sustainability (IAS Plus article)
- The European Financial Reporting Advisory Group (EFRAG) has released a feedback statement on their draft comment paper on accounting for Emission Trading Schemes. Eleven comment letters were received with most respondents agreeing that specific accounting guidance is needed for emission trading schemes (IAS Plus article)
- The European Financial Reporting Advisory Group (EFRAG) has issued a feedback statement to summarise the comments received by the EFRAG on its draft comment letter on bearer plants (IAS Plus article)The European Union has published a Commission Regulation endorsing 'Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27)' (IAS Plus article).
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