In balance – March 2014
Australian reporting matters
Welcome to In balance, our monthly update on financial reporting developments. In balance has been designed to help keep busy professionals one step ahead by providing easy access to the information you need, all in one place.
In our latest edition of Applying IFRS, we discuss the concept of a structured entity and how interests in structured entities may have disclosure impacts for fund managers. We also bring you highlights from IASB’s redeliberations on the Exposure Draft (ED) Financial Instruments: Expected Credit Loss.
Finally, the December 2013 edition of our industry-specific Good Group financial statements for the Real Estate sector is now available.
- Hot topics
- IFRS news and updates
- Public finance management
- Industry in focus
- On the horizon
- Events and webcasts
- Applying IFRS: Structured entities - considerations for fund managers
This edition of Applying IFRS explores the impact of IFRS 12 Disclosure of Interests in Other Entities on fund managers that manage investment funds within the definition of a structured entity. IFRS 12 states that some investment funds may be structured entities. This publication looks at what a fund manager needs to consider in the assessment of whether an investment fund is a structured entity. It also gives examples of the required disclosures for interests in an unconsolidated structured entity.
IFRS news and updates
- IFRS Developments: IASB completes redeliberations on expected credit loss model; sets 2018 effective date
The IASB completed its redeliberations on the proposed expected credit loss model and plans to issue the completed version of IFRS 9 Financial Instruments, including the impairment requirements, in the second quarter of 2014, with an effective date from 1 January 2018.
- IFRS Developments: IASB begins public consultation on the post-implementation review of IFRS 3
The IASB recently issued a Request for Information – Post-implementation Review: IFRS 3 Business Combinations. This request for information is intended to formally gather feedback from constituents on a broad range of implementation issues for IFRS 3.
- IFRS Developments: The IASB issues IFRS 14 - Interim standard on regulatory deferral accounts
The IASB recently issued IFRS 14 Regulatory Deferral Accounts. This interim standard provides first-time adopters of IFRS with relief from derecognising rate-regulated assets and liabilities until a comprehensive project on accounting for such assets and liabilities is completed by the IASB.
- IASB Updates
The IASB met at the IASB offices in London in January and February 2014. The publications below summarises the key issues discussed at the two meetings.
Access the papers here:
- January 2014 IFRIC Update
The Interpretations Committee met in London on 29-30 January 2014. The publication below summarises the key issues discussed.
Access the paper here:
- IFRS for SMEs Update
The IASB has issued its January update for IFRS for SMEs.
Access the paper here:
Public finance management
- IPSASB ED 54 Proposed Recommended Practice Guideline - Reporting Service Performance Information
IPSASB has issued an ED 54 Reporting Service Performance Information. The ED builds on a consultation paper issued in 2011 and provides good practice guidelines on reporting service performance information. The development of ED 54 reflects the IPSASB’s commitment to addressing public sector-specific reporting issues, including those that relate to information additional to the financial statements. Comments should be submitted by 31 May 2014.
Access the paper here:
Industry in focus
- IASB sets 2018 effective date for IFRS 9, FASB scales back scope of its insurance project
The IASB tentatively decided that the mandatory effective date of IFRS 9 will be for annual periods beginning on or after 1 January 2018. This is to allow more opportunity to progress its insurance contracts project and potentially provide greater alignment between IFRS 9 and the new insurance contracts standard.
The FASB tentatively decided to scale back the scope of its insurance project to focus on targeted improvements to the current guidance for long-duration contracts and disclosures for short-duration contracts. It was also tentatively decided that contracts written by non-insurance entities will not be subject to the guidance for insurance.
- Good Real Estate Group (International) Limited
Good Real Estate Group (International) Limited contains an illustrative annual consolidated financial statements of Good Real Estate Group (International) Limited for the period ended 31 December 2013.
On the horizon
Closing dates for comment letters on exposure drafts and consultation papers
|Exposure draft||AASB comment due date|| IASB comment |
|IPSASB comment due date|
|ED/2013/11 Annual Improvements to IFRSs 2012-2014 Cycle||N/A||13 March 2014||N/A|
|Post-implementation Review: IFRS 3 Business Combinations||2 May 2014||30 May 2014||N/A|
|ED 54 Proposed Recommended Practice Guideline - Reporting Service Performance Information||NA||N/A||31 May 2014|
Events and webcasts
Hedge accounting for non-financial entities (archived webcast)
EY held a webcast on hedge accounting on 28 January 2014 that was aimed at CFOs, finance directors, audit committee members, accounting staff and controllers from non-financial entities.
Topics discussed include:
- The current status of the IFRS 9 Financial Instruments project after the hedge accounting requirements were issued
- The main aspects of the new hedge accounting model and how it would be applied to hedging strategies commonly used by non-financial entities, including transition from IAS 39 to IFRS 9
- The main considerations for deciding when to apply the new hedge accounting requirements
Archived recordings of all our previous webcasts are available here