| Financial reporting perspectives |
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New proposals for financial instruments at amortised cost
The IASB is another step closer to replacing IAS 39 with the publication of a new Exposure Draft on financial instruments carried at amortised cost. In our supplement we summarise the ED which proposes a new impairment methodology, and changes the effective interest rate approach. We also look at the buisness implications of these proposals.
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Should you adopt IFRS for SMEs?
Having been five years in development, the long-awaited IFRS for SMEs (the standard) has caused a flurry of interest among reporting entities across the world. This first issue of Talking SMEs highlights some of the issues and considerations that entities should take into account if they were to adopt this standard
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IASB publishes IFRS 9 to replace IAS 39
Phase 1 of the IASBs financial instruments project is now complete, with the issue of IFRS 9 Financial Instruments. Phase 1 establishes a new classification and measurement framework for financial assets, replacing the corresponding sections of IAS 39. In this supplement we highlight the main requirements of IFRS 9, significant issues redeliberated by the Board since June and discuss the key business impacts.
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IFRS 3R broadens definition of a business
To avoid ‘unduly restrictive interpretations’ particularly relating to start-up entities, IFRS 3R broadens the definition of a business and requires more judgment to be applied. The determination of whether an acquired set of activities and assets represents a business is critical because the accounting for a business combination differs significantly from the accounting for an asset acquisition. The second issue in the Negotiation series summarises the changes in IFRS 3R.
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Ernst & Young supports adoption of IFRS 9 for use in EU
Our comment letter regarding the near final draft of IFRS 9 Financial Instruments supports EFRAG’s draft endorsement advise that IFRS 9 be adopted for use in Europe. The draft substantially responds to the concerns of most constituents and many of the recommendations we made in response to the IASB's exposure draft.
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Changes to related party disclosures summarised
In this supplement, we summarise the changes to IAS 24 Related Party Disclosures which clarifies and simplifies the definition of a related party and provides some relief for government-related entities to disclose details of all transactions with other government-related entities (as well as with the government itself).
Applying the fair value disclosure heirarchy
All financial instruments that are carried at fair value, are now required to be classified into a three tier heirarchy reflecting how fair value was determined. This publication provides guidance on how to apply this new requirement and includes examples illustrating the classification of some financial instruments within the fair value heirarchy.
- See Publications for further coverage of fair value and convergence
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Upcoming IFRS webcasts
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US GAAP vs. IFRS comparison guide updated
Worldwide, Ernst & Young is helping companies address the challenges and opportunities represented by the shift to IFRS. Resources available include several Local GAAP / IFRS Comparisons. For more local developments, see IFRS around the world on this page. For in-depth guidance, see GAAIT.
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Insurance accounting alert
This issue of Insurance Account Alert reports that the IASB will discuss the recognition of rights and obligations arising from insurance contracts and when to derecognize an insurance liability at its November meeting. The updated project timetable indicates that the ED of a new standard will be issued in April 2010.
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IFRS for the Solar Industry
In response to increasing demand for cleantech and renewable energy sources, the solar technology industry has experienced very strong growth in recent years. This guide identifies IFRS accounting issues relevant to the solar industry (pdf, 5.5MB) and contains sample fact patterns for commonly occurring issues and IFRS accounting solutions that may be relevant to your business.
Accounting for stripping costs in mining activities
In surface mining operations, removal of overburden and other waste materials is necessary to access the ore for mineral extraction. In this publication we discuss the accounting issues (pdf, 218kb) that arise, in the absence of specific requirements in IFRS.
IASB to discuss measurement model, margin and discount rate
The IASB’s debate continues over selecting a measurement approach for insurance contracts. Should the Board opt for the updated IAS 37 model rather than the current fulfillment model, the conflict with the FASB’s current fulfilment approach would result in the recommendation for inclusion of both bases in the Exposure Draft. Our insurance accounting alert summarises the agenda paper.
