IFRS (International Financial Reporting Standards)

Overview of IFRS projects

IASB Projects: a pocketbook guide

The IASB continues to move forward with its standard-setting activities and the ability to stay one step ahead in a sea of change is critical. IASB Projects: a pocketbook guide summarises the key features of the various IASB projects, many of which are joint projects with the US FASB as part of ongoing efforts to converge IFRS and US GAAP.

In particular, the pocketbook guide summarises the proposed standards based on the tentative decisions taken to date and sets out some of the potential financial and business implications of the proposed standards, together with Ernst & Young’s views on the projects.

• IASB Projects: A pocketbook guide as at 31 March 2013
• The June 2012 edition of IASB Projects: a pocketbook guide is now available.

Joint Project Watch

The standard-setting activities of the IASB and the FASB on their joint projects continue to move forward. The Boards have issued final standards or exposure drafts on several projects and continue to re-deliberate others. Our Joint Project Watch publication is designed to give you a snapshot of key developments from an IFRS perspective, along with our observations about the potential implications for companies.

Revenue recognition

Under a joint project, the IASB and the FASB are developing a single revenue recognition model based on the transfer of control of a good or service to a customer. The Boards decided to formally re-expose their joint proposal as a result of significant changes made to the model proposed in June 2010. Comments were due by 13 March 2012.

Ernst & Young thought leadership

General materials

• IFRS Developments, Issue 60: Revenue recognition - credit card rewards and transition (May 2013)
• IFRS Developments, Issue 59: IASB issues IFRIC Interpretation 21 Levies
• IFRS Developments, Issue 56: IASB to clarify interaction between unit of account and fair value measurement requirements
• IFRS Developments, Issue 55: Final revenue standard is taking shape (March 2013)
• IFRS Developments, Issue 52: Boards revisit disclosure, transition and effective date in the revenue project (February 2013)
• IFRS Developments, Issue 51: Boards address various application issues in the revenue proposal (February 2013)
• IFRS Developments Issue 49: Boards progress further on revenue re-deliberations (December 2012)
• IFRS Developments Issue 46: The Boards progress on revenue recognition re-deliberations
• Joint revenue recognition project – Boards to begin re-deliberations (May2012)
• IFRS Outlook: More work needed on revenue recognition (March 2012)
• Comment Letter: Comments on Exposure Draft 2011/6 Revenue from Contracts with Customers (March 2012)
• Applying IFRS: Revenue from contracts with customers – the revised proposal (January 2012)
• IFRS Practical Matters: Revenue recognition project: Round 2 for the exposure draft (January 2012)
• IFRS Developments, Issue 18: IASB and FASB issue revised revenue recognition proposals (November 2011)
• Thought center webcast: A revised proposal for revenue recognition (November 2011)

Industry materials

• IFRS Developments for Media & Entertainment and Technology: The Boards explore a new direction on licence arrangements (November 2012)
• Applying IFRS: Revised proposal for revenue from contracts with customers – Implications for the oil & gas sector (March 2012)
• Applying IFRS: Revised proposal for revenue from contracts with customers – Implications for the oilfield services sector (March 2012)
• Applying IFRS: Revised proposal for revenue from contracts with customers – Implications for the mining and metals sector (March 2012)
• Applying IFRS: Revised proposal for revenue recognition – power and utilities (March 2012)
• Applying IFRS: Revised proposal for revenue recognition – life sciences (March 2012)
• Applying IFRS: Revised proposal for revenue recognition – retail and consumer products (March 2012)
• Applying IFRS: Revised proposal for revenue recognition – telecommunications (February 2012)
• IFRS Developments: Revised proposal for revenue recognition – real estate and construction industries (December 2011)

Leases

Under a joint project, the IASB's and FASB's proposal for lease accounting would eliminate the distinction between operating and finance/capital leases for lessees and would result in nearly all leases being reflected on the balance sheet. The proposed model would also require lessees and lessors to make a number of estimates and periodically reassess those estimates in accounting for leases. The Boards will re-expose the proposal in 2012.

Ernst & Young thought leadership

General materials

• Applying IFRS: A closer look at the revised lease accounting proposal (May 2013)
• IFRS Practical Matters: Boards re-examine lessor accounting (January 2013)
• IFRS Practical Matters: New accounting standard for lessees: Are we there yet? (January 2013)
• Applying IFRS: Leases project on the brink of re-exposure (September 2012)
• IFRS Developments, Issue 32: Circling back to straight-line leases but with a twist (June 2012)
• IFRS Developments, Issue 25: Boards weighing effects of putting leases on the balance sheet (March 2012)
• IFRS Developments, Issue 17: Operating lease accounting survives for some real estate investors (October 2011)
• IFRS Practical Matters: Lease accounting proposals – simplified, but not simple (August 2011)
• IFRS Developments, Issue 10: Boards to re-expose leases, and propose a new approach for lessors (July 2011)
• Applying IFRS: Lessee model comes together as leases project progresses (July 2011)
• IFRS Outlook: Lease accounting is entering a second phase of public consultation – the impact on lessees (August 2011)
• Comment Letter: Comments on Exposure Draft 2010/9 Leases (December 2010)

Financial instruments

Under a joint project on financial instruments, the IASB and FASB are addressing the following: classification and measurement; amortised cost and impairment; hedging; and balance sheet offsetting. The Boards' overall objective is to simplify and converge the accounting for financial instruments. Although this is a joint project, the Boards have deliberated many issues separately. The IASB issued a final standard on classification and measurement (IFRS 9) and separate proposals on impairment and hedging, whereas the FASB issued one comprehensive exposure draft.

Ernst & Young thought leadership

Classification and measurement

• IFRS Developments Issue 47: The IASB proposes limited amendments to IFRS 9 classification and measurement
• IFRS Developments Issue 41: IFRS 9 classification and measurement — IASB deliberations are now substantially complete (October 2012)
• IFRS Developments Issue 38 - Financial instruments: classification and measurement – joint deliberations now complete (August 2012)
• IFRS Developments, Issue 33: Financial Instruments: classification and measurement - the ball continues to roll (June 2012)
• IFRS Development, Issue 31 – The GAAP differences continue to narrow (May 2012)
• IFRS Developments, Issue 27: Classification and measurement of financial instruments – narrowing the GAAP (April 2012)
• IFRS Developments, Issue 23: Limited improvements to the IFRS 9 classification and measurement model (January 2012)
• Applying IFRS: IFRS 9 – New mandatory effective date and transition disclosures (January 2012)
• Implementing phase 1 of IFRS 9 – Second edition (July 2011)
• Supplement to IFRS outlook, Issue 89: IASB completes phase 1 of IFRS 9: Financial instruments (October 2010)
• Supplement to IFRS Outlook, Issue 60: IASB publishes IFRS 9 – Phase 1 of new standard to replace IAS 39 (November 2009)

Industry materials

• IFRS changes impacting the banking industry. An update for the CFO (September 2012)
• Applying IFRS: Limited improvements to IFRS classification and measurement – the impact for insurers and next steps (March 2012)
• Facing the challenge – Business implications of IFRS 4, 9 and Solvency II for insurers (January 2012)

Financial instruments – hedging

• IFRS Developments, Issue 57: IASB concludes its re-deliberations on hedge accounting project (May 2013)
• IFRS Developments, Issue 53: Proposed amendments to IAS 39 and IFRS 9 to allow novated derivatives to be continuing hedges (March 2013)
• IFRS Developments, Issue 50: Important changes to hedge accounting – but also a further delay (January 2013)
• IFRS Developments, Issue 40: General hedge accounting
• IFRS Developments, Issue 30: Macro hedge accounting decoupled from IFRS 9 project (May 2012)
• IFRS Outlook: Hedge accounting moves closer to risk management practices (January 2012)
• IFRS Developments, Issue 16: Hedge accounting – summary of redeliberations (September 2011)
• IFRS Developments, Issue 14: A step forward in hedge accounting (August 2011)
• IFRS Outlook: Our views on the hedge accounting proposals (March/April 2011)
• Comment Letter: Comments on Exposure Draft 2010/13 – Hedge Accounting (March 2011)
• Hedge accounting under IFRS 9: a closer look at the changes and challenges (February 2011)
• Supplement to IFRS Outlook, Issue 91: Hedge accounting under IFRS – all set for change (December 2010)

Financial Instruments – amortised cost and impairment

• IFRS Developments, Issue 54: IASB proposes new expected credit loss model (March 2013)
• IFRS Developments, Issue 37 – Impairment of financial assets – the last details? (July 2012)
• IFRS Developments, Issue 26: IFRS 9 Impairment of financial assets — a step closer to completion (April 2012)
• IFRS Practical Matters: Impairment – assessing the impact of the new proposal (March 2012)
• IFRS Developments, Issue 21: Impairment – a major step forward in achieving convergence (December 2011)

Industry materials

• The IASB's new impairment model - views of European financial institutions (September 2011)

Financial instruments – Disclosure and Presentation

• Applying IFRS, Offsetting financial instruments: clarifying the amendments (May 2012)
• IFRS Developments, Issue 22: Offsetting of financial instruments (December 2011)
• Supplement to IFRS Outlook, Issue 97: IFRS 7 – Financial Instruments: Disclosures – Impending changes effective for 2011 and 2012 (March 2011)
• Supplement to IFRS Outlook, Issue 85: New disclosures for derecognition of financial instruments (October 2010)

Financial instruments – other

• Measure by Measure – Synchronising IFRS 9 and IFRS 4 – Phase II for Insurers (July 2011)
• Thought center webcast: IFRS 9 – Financial Instruments – status and what lies ahead (December 2011)
• Thought Center webcast: IFRS 9 – Financial Instruments – what to expect from changes to hedge accounting

Consolidation and joint arrangements

The IASB issued IFRS 10 Consolidated Financial Statements in May 2011, establishing a new definition of control that may significantly change which entities are considered to be controlled, and therefore consolidated. The IASB also issued IFRS 11 Joint Arrangements and IFRS 12 Disclosure of Interests in Other Entities in May 2011. The IASB and FASB are working jointly to consider issues relating to consolidation accounting for qualifying investment entities.

Ernst & Young thought leadership

General materials

• IFRS Developments, Issue 35: Transition guidance amendments for IFRS 10, IFRS 11 and IFRS 12
• IFRS Developments, Issue 34: Investment entities - the plot thickens (June 2012)
• Comment Letter: Comments on Exposure Draft 2011/4 Investment Entities (January 2012)
• Applying IFRS: Challenges in adopting and applying IFRS 10 (September 2011)
• Applying IFRS: Challenges in adopting and applying IFRS 11 (September 2011)
• IFRS Developments, Issue 15: Proposal for investment entities to measure investments at fair value (August 2011)
• Thought center webcast: IFRS 11 – Joint Arrangements (July 2011)
• Thought center webcast: IFRS 10 – Consolidated Financial Statements (June 2011)
• IFRS Outlook: What you need to know about the new consolidation, joint arrangements and disclosure standards (May/June 2011)
• IFRS Developments, Issue 1: IASB issues three new standards: Consolidated Financial Statements, Joint Arrangements, and Disclosure of Interests in Other Entities (May 2011)
• IFRS Practical Matters: What do the new consolidation, joint arrangements and disclosure accounting standards mean to you? (June 2011)

Industry materials

• Applying IFRS: Banking and Capital Markets – Challenges for banks and their structured entities in adopting and applying IFRS 10 (January 2012)
• IFRS Developments for Insurers: IFRS 10 – Consolidated Financial Statements – an insurer's perspective (December 2011)
• Applying IFRS: Accounting for joint arrangements in the power and utilities sector (November 2011)
• Exploring IFRS: Managing the risk – joint venturing (August 2011)
• Refining IFRS: Managing the risk – joint venturing (August 2011)
• Applying IFRS: Oil & Gas – Impact of the new joint arrangements and consolidated standards (August 2011)
• Applying IFRS: Mining & Metals – Impact of the new joint arrangements and consolidation standards (August 2011)
• IFRS insights for asset managers: Consolidated financial statements (May 2011)
• IFRS 10, 11 and 12 on consolidation and joint arrangements: A changing balance sheet – Implications for the real estate and construction industries (May 2011)

Insurance contracts

Under a joint project, the IASB and FASB have proposed measurement models for insurance liabilities that incorporate current estimates of discounted cash flows re-measured at each reporting date.

Ernst & Young thought leadership

General materials

During their September 2012 joint meeting, the Boards discussed:

In October 2012, the Boards discussed:

Our Insurance Accounting Alerts summarise what you need to know about the discussions at these meetings.

• IASB and FASB continue to deliberate the insurance contracts standard
  • Accounting for acquisition costs in the pre-coverage period
  • How to account for insurance contracts at transition
  • The time value of money in the premium allocation approach
  • The presentation of changes in the liability for participating contracts
  • How certain items should be presented in the statement of comprehensive income
• Insurance Accounting Alert: Boards discuss allocation of insurance contracts revenue and consider changes (April 2013)
• Insurance Accounting Alert: Boards decide on allocation of cash flows; discussions continue on earned premium presentation for contracts (July 2012)
• Insurance Accounting Alert: Boards make decisions on premium allocation approach (March 2012)
• Applying IFRS: Limited improvements to IFRS classification and measurement – the impact for insurers and next steps (March 2012)
• IFRS Developments for Insurers: Boards debate premium allocation approach (February 2012)
• Facing the challenge – Business implications of IFRS 4, 9 and Solvency II for insurers (January 2012)
• Insurance Accounting Alert: Boards discuss onerous contract testing and measurement of options and guarantees (December 2011)
• Insurance Accounting Alert: IASB decides to consider limited improvements to IFRS 9; Boards discuss unbundling (November 2011)
• Insurance Accounting Alert: Boards discuss fixed-fee service contracts (October 2011)
• Discount rates: one size does not fit all (October 2011)
• Measure by Measure – Synchronising IFRS 9 and IFRS 4 Phase II for Insurers (July 2011)

Other projects

In addition to the priority projects (i.e., revenue recognition, leases, financial instruments, consolidation and joint arrangements, and insurance), the IASB is currently working on other projects. Coverage of those projects is available:

• IASB proposes an interim standard on regulatory deferral accounts
• Mining & Metals - Refining IFRS: Spin-off transactions
• Publications
• IFRS work plan