In balance – May 2014

Australian reporting matters

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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.

Companies facing challenges in reflecting credit risks in derivative valuations will find our latest edition of Applying IFRS useful as we provide insight into the methods used in practice to calculate credit risk. A new version of IASB Projects: A Pocketbook Guide, which assists users in tracking the key features of active projects and tentative decisions made by the IASB is also available.

Finally, we invite you to register for our webcast on hedge accounting, scheduled for 15 May 2014, which will cover the main aspects of the new hedge accounting model and how to transition from AASB 139 to AASB 9.



Hot topics

  • Applying IFRS: Credit valuation adjustments for derivative contracts
    This issue of Applying IFRS provides insight into some of the methods used in practice and the practical implications in relation to calculating the credit adjustments in derivative valuations.
  • IASB Projects: A pocketbook guide
    EY’s pocketbook guide summarises the key features of the active projects of the IASB as at 31 March 2014. It also considers potential implications of the proposed standards and our views on certain projects.

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IFRS news and updates


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AASB news and updates

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Regulatory update

  • Consultation open on amendments to the Corporations Law

    Treasury has issued a draft Bill containing proposed improvements to the corporations law by removing unnecessary regulation, clarifying existing regulatory obligations and enhancing the efficient operation of certain Government bodies.

    The key measures include:

    • The removal of the obligation on directors to call a general meeting at the request of only 100 shareholders
    • Reducing restrictions on the circumstances in which companies can pay dividends
    • Removing the obligation on unlisted disclosing companies to prepare remuneration reports
    • Exempting companies limited by guarantee from the need to appoint or maintain an auditor when they either do not need to prepare a financial report or have their financial report audited

Submissions on the draft Bill close on 16 May 2014.

Access the paper here:
http://www.treasury.gov.au/~/media/Treasury/Consultations%20and%20Reviews/Consultations/2014/Corporations%20Legislation%20Amendment%20Deregulatory%20and%20Other%20Measures/Key%20Documents/PDF/Exposure_Draft.ashx


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Industry in focus

Insurance

  • IASB makes use of OCI optional and confirms unlocking of the Contractual Service Margin 
    The IASB started re-deliberations on its 2013 ED Insurance Contracts and tentatively decided to permit an accounting policy choice to recognise the effect of changes in discount rates in either OCI or profit or loss. The IASB also confirmed that the contractual service margin is unlocked for changes in expected future cash flows relating to future coverage and other future services and tentatively decided to extend CSM unlocking to the risk adjustment.

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On the horizon

Closing dates for comment letters on exposure drafts and consultation papers:

 

Exposure draft AASB comment due date IASB comment due date IPSASB comment
due date
Treasury comment due date
Post-implementation Review: IFRS 3 Business Combinations 2 May 2014 30 May 2014 N/A N/A
Corporations Legislation Amendment (Deregulatory and Other Measures) Bill 2014 N/A N/A N/A 16 May 2014
ED 248Amendments to AASB 1053 19 May 2014 N/A N/A N/A
ED 54 Proposed Recommended Practice Guideline - Reporting Service Performance Information N/A N/A 31 May 2014 N/A
ED 249 Disclosure Initiative Proposed Amendments to AASB 101 30 Jun 2014 23 July 2014 N/A N/A
Tier 2 Supplement to ED 249 Disclosure Initiative Proposed Amendments to AASB 101 30 Jun 2014 N/A N/A N/A
Discussion paper: Accounting for Dynamic Risk Management: a Portfolio Revaluation Approach to Macro Hedging TBA 17 Oct 2014 N/A N/A


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Events and webcasts

Upcoming webcast

Hedge Accounting for non-financial entities

We are delighted to invite you to join our webcast on 15 May 2014 to discuss the changes to the hedging accounting standard and their potential impact on business.

In this webcast, our panel of EY professionals will discuss:

  • The current status of the AASB 9 Financial Instruments 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 AASB 139 to AASB 9.
  • The main considerations for deciding when to apply the new hedge accounting requirements.

To register for this webcast, please click here.



Archived webcasts

2014 Financial Reporting Update

Our recent Financial Reporting Update webcast attracted more than 600 attendees. In this webcast, our panel of EY professionals discussed the latest developments in new, revised and amending reporting standards, practical challenges facing companies in the current financial reporting environment and trends arising from the 2013 reporting cycle.

Responses to our polling questions in the webcast provided a further insight regarding the challenges faced by the industry, including what attendees find most challenging in performing impairment and OFR, and whether or not they anticipate adopting hedge accounting early.

To listen to the recording of this webcast, please click here.

Archived recordings of all our previous webcasts are available here.



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