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  • Revenue resources
    new revenue recognition standard on the retail wholesale and distribution sector 28 May 2014 This publication highlights issues from the new revenue recognition standard that will be of interest to those in the retail wholesale and distribution sector the standard could have an impact on the profile of revenue and profit recognition IFRS industry insights Implications of the new revenue recognition standard on the travel hospitality and leisure sector 28 May 2014 This publication highlights issues from the new revenue recognition standard that will be of interest to those in the travel hospitality and leisure sector the standard could have an impact on the profile of revenue and profit recognition IFRS industry insights Implications of the new revenue recognition standard on the healthcare sector 28 May 2014 This publication highlights issues from the new revenue recognition standard that will be of interest to those in the healthcare sector The Bruce Column Recognising the achievement 28 May 2014 The new revenue recognition standard has been a long time in gestation Now that it is published Robert Bruce our regular resident columnist assesses its impact and effects IFRS industry insights Implications of the new revenue recognition standard on the technology sector 28 May 2014 This publication highlights issues from the new revenue recognition standard that will be of interest to those in the technology sector the standard could have a major impact on the profile of revenue and profit recognition and may require system changes IFRS industry insights Implications of the new revenue recognition standard on the telecommunications sector 28 May 2014 This publication highlights issues from the new revenue recognition standard that will be of interest to those in the telecommunications sector the standard may require system changes and could have a major impact on the profile of revenue and profit recognition IFRS industry insights Implications of the new revenue recognition standard on the media sector 28 May 2014 This publication highlights issues from the new revenue recognition standard that will be of interest to those in the media sector IFRS industry insights Implications of the new revenue recognition standard on the real estate sector 28 May 2014 This publication highlights issues from the new revenue recognition standard that will be of interest to those in the real estate sector the standard could have a major impact on the profile of revenue and profit recognition IFRS industry insights Implications of the new revenue recognition standard on the automotive sector 28 May 2014 This publication highlights issues from the new revenue recognition standard that will be of interest to those in the automotive sector IFRS industry insights Implications of the new revenue recognition standard on the aerospace and defence sector 28 May 2014 This publication highlights issues from the new revenue recognition standard that will be of interest to those in the aerospace and defence sector IFRS in Focus IASB issues new standard on revenue recognition 28 May 2014 This newsletter discusses the IASB s new Standard IFRS 15 Revenue from Contracts

    Original URL path: http://www.iasplus.com/en/collections/revenue?b_start:int=140 (2016-02-10)
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  • Heads Up — Boards issue guidance on revenue from contracts with customers
    If a contract does not meet these criteria at contract inception an entity must continue to reassess the criteria to determine whether they are subsequently met If the above criteria are not met in a contract with a customer the entity is precluded from recognizing revenue under the contract until the consideration received is nonrefundable and either 1 all performance obligations in the contract have been satisfied and substantially all the promised consideration has been received or 2 the contract has been terminated or canceled If those conditions are not met any consideration received would be recognized as a liability Identifying the Performance Obligations Step 2 The ASU provides guidance on evaluating the promised goods or services 10 in a contract to determine each performance obligation i e the unit of account A performance obligation is each promise to transfer either of the following to a customer A good or service or a bundle of goods or services that is distinct A series of distinct goods or services that are substantially the same and that have the same pattern of transfer to the customer 11 A promised good or service is distinct and therefore a performance obligation if both of the following criteria are met Capable of being distinct The customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer Distinct within the context of the contract The entity s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract the ASU provides specific indicators of this criterion see Editor s Note below The ASU defines a readily available resource as a good or service that is sold separately by the entity or another entity or a resource that the customer has already obtained from the entity If an entity regularly sells a good or service on a stand alone basis the customer can benefit from that good or service on its own and the criterion in the first bullet would be met The following diagram illustrates the ASU s process for identifying performance obligations in a contract Editor s Note The ASU s guidance on determining whether a customer can benefit from a good or service on its own or with other readily available resources is generally consistent with the current guidance in ASC 605 25 on determining whether a good or service has stand alone value However the ASU also contains a new requirement under which entities must evaluate a good or service to determine whether it is separately identifiable from other promises in the contract The ASU provides the following indicators for evaluating whether a promised good or service is separable from other promises in a contract The entity does not provide a significant service of integrating the good or service with other goods or services promised in the contract In other words the entity is not using the good or service as an input to produce or deliver the combined output specified by the customer The good or service does not significantly modify or customize another good or service promised in the contract The good or service is not highly dependent on or highly interrelated with other goods or services promised in the contract For example a customer could decide to not purchase the good or service without significantly affecting the other promised goods or services Entities may need to use significant judgment when determining whether the goods or services in a contract are highly dependent on or highly interrelated with or whether they significantly modify or customize each other This new concept may require entities to account for a bundle of goods or services which may qualify for separate accounting under current U S GAAP as a single performance obligation unit of account Determining the Transaction Price Step 3 The ASU requires an entity to determine the transaction price which is the amount of consideration to which it expects to be entitled in exchange for the promised goods or services in the contract The transaction price can be a fixed amount or can vary because of discounts rebates refunds credits price concessions incentives performance bonuses penalties or other similar items An entity must consider the following when determining the transaction price under the ASU Variable consideration When the transaction price includes a variable amount an entity is required to estimate the variable consideration by using either an expected value probability weighted approach or a most likely amount approach whichever is more predictive of the amount to which the entity will be entitled subject to the constraint discussed below Significant financing components Adjustments for the time value of money are required if the contract includes a significant financing component as defined by the ASU Noncash consideration To the extent that a contract includes noncash consideration an entity is required to measure that consideration at fair value Consideration payable to the customer Like current U S GAAP the ASU requires that consideration payable to the customer be reflected as an adjustment to the transaction price unless the consideration is payment for a distinct good or service as defined by the ASU Constraining Estimates of Variable Consideration Some or all of an estimate of variable consideration is only included in the transaction price to the extent that it is probable 12 that subsequent changes in the estimate would not result in a significant reversal of revenue this concept is commonly referred to as the constraint The ASU requires entities to perform a qualitative assessment that takes into account both the likelihood and the magnitude of a potential revenue reversal and provides factors that could indicate that an estimate of variable consideration is subject to significant reversal e g susceptibility to factors outside the entity s influence long period before uncertainty is resolved limited experience with similar types of contracts practices of providing concessions or a broad range of possible consideration amounts This estimate would be updated in each reporting period to reflect changes in facts and circumstances In addition the constraint does not apply to sales or usage based royalties derived from the licensing of intellectual property rather consideration from such royalties is only recognized as revenue at the later of when the performance obligation is satisfied or when the uncertainty is resolved e g when subsequent sales or usage occurs Editor s Note Under current U S GAAP the amount of revenue recognized is generally limited to the amount that is not contingent on a future event i e the price is no longer variable Under the ASU an entity must include some or all of an estimate of variable or contingent consideration in the transaction price which is the amount to be allocated to each unit of account and recognized as revenue when the entity concludes that it is probable that changes in its estimate of such consideration will not result in significant reversals of revenue in subsequent periods This less restrictive guidance will most likely result in earlier recognition of revenue under the ASU than under current U S GAAP Further entities will need to exercise significant judgment when performing this assessment and could therefore find it challenging to consistently apply the ASU s requirements throughout their organization Allocating the Transaction Price Step 4 Under the ASU when a contract contains more than one performance obligation an entity would generally allocate the transaction price to each performance obligation on a relative stand alone selling price basis The ASU states that t he best evidence of a standalone selling price is the observable price of a good or service when the entity sells that good or service separately in similar circumstances and to similar customers If the good or service is not sold separately an entity must estimate it by using an approach that maximizes the use of observable inputs Acceptable estimation methods include but are not limited to adjusted market assessment expected cost plus a margin and a residual approach when it is not directly observable and either highly variable or uncertain The ASU indicates that if certain conditions are met there are limited exceptions to this general allocation requirement When those conditions are met a discount or variable consideration must be allocated to one or more but not all distinct goods or services or performance obligations in a contract Changes in the transaction price e g changes in an estimate of variable consideration after contract inception would be allocated to all performance obligations in the contract on the same basis unless the terms of the contract meet certain criteria that allow for allocation of a discount or variable consideration to one or more but not all performance obligations Editor s Note The ASU allows entities to use a residual approach in allocating contract consideration but only when the stand alone selling price of a good or service is not directly observable and either highly variable or uncertain An entity will need to use judgment in determining whether these criteria are met Because the ASU s allocation guidance is similar to the guidance in ASC 605 25 entities that have historically applied ASC 605 25 and have established stand alone selling prices for goods or services through either separate sales or estimations may not meet the ASU s criteria for using a residual approach Recognizing Revenue When or as Performance Obligations Are Satisfied Step 5 Under the ASU a performance obligation is satisfied and the related revenue recognized when control of the underlying goods or services the assets related to the performance obligation is transferred to the customer The ASU defines control as the ability to direct the use of and obtain substantially all of the remaining benefits from the asset An entity must first determine whether control of a good or service is transferred over time If so the related revenue is recognized over time as the good or service is transferred to the customer If not control of the good or service is transferred at a point in time Control of a good or service and therefore satisfaction of the related performance obligation is transferred over time when at least one of the following criteria is met The customer simultaneously receives and consumes the benefits provided by the entity s performance as the entity performs The entity s performance creates or enhances an asset that the customer controls as the asset is created or enhanced The entity s performance does not create an asset with an alternative use to the entity and the entity has an enforceable right to payment for performance completed to date If a performance obligation is satisfied over time an entity recognizes revenue by measuring progress toward satisfying the performance obligation in a manner that best depicts the transfer of goods or services to the customer The ASU provides specific guidance on measuring progress toward completion including the use and application of output and input methods Editor s Note The ASU notes that in certain circumstances an entity may not be able to reasonably measure progress toward complete satisfaction of a performance obligation In such circumstances the entity would be required to recognize revenue to the extent of costs incurred i e at a zero profit margin if the entity expects to recover such costs The ASU does not permit entities to use a completed contract method such as that described in ASC 605 35 formerly SOP 81 1 13 If a performance obligation is not satisfied over time it is deemed satisfied at a point in time Under the ASU entities would consider the following indicators in evaluating the point at which control of an asset has been transferred to a customer The entity has a present right to payment for the asset The customer has legal title to the asset The entity has transferred physical possession of the asset The customer has the significant risks and rewards of ownership of the asset The customer has accepted the asset Editor s Note Under the ASU entities recognize revenue by using a control based model rather than the risks and rewards model of current U S GAAP However the boards decided to include significant risks and rewards as a factor for entities to consider in evaluating the point in time at which control of a good or service is transferred to a customer The boards believe that the ASU s model will result in 1 a more consistent determination of when goods or services are transferred to a customer 2 easier identification of performance obligations and 3 similarities in the use of the term control in the existing definition of an asset For many entities the ASU s control based model will not significantly affect how they recognize revenue for contracts with customers However the model may significantly affect certain entities that either were within the scope of ASC 605 35 formerly SOP 81 1 or were specifically excluded from the scope of such guidance including construction and production type contracts contract manufacturers suppliers of customized products and other similar manufacturers Specifically entities cannot presume that arrangements currently within the scope of ASC 605 35 that are accounted for by using a percentage of completion method will meet the ASU s requirements for recognition of revenue over time i e revenue for certain arrangements may need to be recognized at a point in time Conversely entities with arrangements to manufacture goods that are currently excluded from the scope of ASC 605 35 and for which revenue is recognized at a point in time may meet the ASU s requirements for revenue recognition over time For example if an entity s obligation to produce a customized product meets the criteria for revenue recognition over time the entity s performance does not create an asset with an alternative use and the entity has a right to payment for performance completed to date if the customer terminates the contract revenue related to that product would be recognized over the period in which the product is produced not when the product is delivered to the customer as is generally the case under current U S GAAP Other Provisions and Impacts of the Revenue Model In addition to the provisions discussed above the standard provides implementation guidance on several other important topics including the accounting for certain revenue related costs Appendix A in the attached PDF summarizes the ASU s guidance on the following Combination of contracts Contract modifications Contract costs Rights of return Warranties Principal versus agent considerations Customer options for additional goods or services Nonrefundable up front fees Customer s unexercised rights Licenses Repurchase agreements Consignment arrangements Bill and hold arrangements Customer acceptance terms Further although the ASU does not provide any specific income tax related guidance because tax accounting methods are often in line with the financial reporting accounting book method for revenue recognition any changes to the amount or timing of book revenue as a result of the ASU may also affect taxable income Appendix B in the attached PDF summarizes the potential tax implications related to adoption of the ASU Required Disclosures The ASU requires entities to disclose both quantitative and qualitative information that enables users of financial statements to understand the nature amount timing and uncertainty of revenue and cash flows arising from contracts with customers The ASU s disclosure requirements which are significantly more comprehensive than those in existing revenue standards include the following there are certain exceptions for nonpublic entities see Appendix C in the attached PDF for a summary of these exceptions Presentation or disclosure of revenue and any impairment losses recognized separately from other sources of revenue or impairment losses from other contracts A disaggregation of revenue to depict how the nature amount timing and uncertainty of revenue and cash flows are affected by economic factors the ASU also provides implementation guidance Information about 1 contract assets and liabilities including changes in those balances 2 the amount of revenue recognized in the current period that was previously recognized as a contract liability and 3 the amount of revenue recognized in the current period that is related to performance obligations satisfied in prior periods Information about performance obligations e g types of goods or services significant payment terms typical timing of satisfying obligations and other provisions Information about an entity s transaction price allocated to the remaining performance obligations including in certain circumstances the aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied or partially unsatisfied and when the entity expects to recognize that amount as revenue A description of the significant judgments and changes in those judgments that affect the amount and timing of revenue recognition including information about the timing of satisfaction of performance obligations the determination of the transaction price and the allocation of the transaction price to performance obligations Information about an entity s accounting for costs to obtain or fulfill a contract including account balances and amortization methods Information about policy decisions i e whether the entity used the practical expedients for significant financing components and contract costs allowed by the ASU The ASU requires entities on an interim basis to disclose information required under ASC 270 as well as to provide the disclosures described above about 1 the disaggregation of revenue 2 contract asset and liability balances and significant changes in those balances since the previous period end and 3 the transaction price allocated to the remaining performance obligations Editor s Note IFRS 15 only requires entities to disclose the disaggregation of revenue in addition to the information required under IAS 34 14 for interim periods Effective Date and Transition The ASU is effective for annual reporting periods including interim reporting periods within those periods beginning after December 15 2016 for public entities Early application is not permitted however early adoption is optional for entities reporting under IFRSs In addition the ASU provides relief for nonpublic entities by delaying the effective

    Original URL path: http://www.iasplus.com/en/publications/us/heads-up/2014/revenue (2016-02-10)
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  • Conceptual Framework — Comprehensive IASB project
    discussions on the staff draft for measurement bases As per request of the Board the draft only included two categories of measurement bases current and historical measures The Board agreed with the staff paper with one sweep issue remaining being the definition of the fulfilment value This issue will be discussed at the November IASB meeting In addition the Board discussed consequential amendments to the existing standards that will become necessary once the Exposure Draft on the Conceptual Framework is finalised The Board agreed that potential inconsistencies between the standards and the proposed Framework will be summarised in the Basis for Conclusions to the Exposure Draft and that references to the previous version of the Framework will be updated However the Board did not agree on any further changes to the standards After agreeing that all required due process steps had been taken the Board gave the staff the permission to ballot the Exposure Draft with a comment period of 150 days Four Board members expressed concerns about several issues that could potentially have them dissent from the Exposure Draft Conceptual framework 24 Sep 2014 At this meeting the IASB discussed remaining aspects of measurement implicaitons of long term investment and the distinction between liabilities and equity Conceptual Framework Transition requirements for the revised Conceptual Frameworks 16 Sep 2014 The IFRS Interpretations Committee discussed 1 the IASB s tentative decisions on transition and effective date for the revised Conceptual Framework and 2 the proposed transition guidance and effective date Conceptual framework 24 Jul 2014 The Board continued its redeliberations in the Conceptual framework project by having a discussion about cash flow based measurements the distinction between P L and OCI the scope and content of presentation and disclosure other elements the control of the asset definition the present obligation aspect of the liability definition derecognition the business model and transition and the effective date Conceptual framework 23 Jul 2014 The Board continued its redeliberations in the Conceptual framework project by having an extensive discussion about the measurement section Board member discussed the objective and the effect of the qualitative characteristics as well as measurement categories Conceptual framework 19 Jun 2014 The Board continued its redeliberations of the feedback in the Conceptual framework project In this session the IASB discussed the distinction between profit or loss and OCI economic resources and benefits executory contracts the unit of account communication principles as well as materiality under presentation and disclosure and the distinction between liabilities and equity Conceptual framework 21 May 2014 The Technical Principal on the Conceptual Framework project opened the session and noted that the staff had ten papers to discuss with the Board She noted that the first three papers to be discussed dealt with the definition of the elements and recognition criteria these papers were followed by two papers that dealt with reporting entity issues a paper on the going concern assumption and a series of papers that discussed potential changes to Chapters 1 and 3 of the existing

    Original URL path: http://www.iasplus.com/en/projects/major/cf-iasb?set_language=en (2016-02-10)
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  • Amendments to the Conceptual Framework for Financial Reporting [ED]
    Links Comment period ended on November 25 2015 Proposed effective date The IASB is allowing constituents an extended six month period to work their way through the EDs and to respond to the questions raised The IASB will consider the comments received when developing the final version of the revised Conceptual Framework The IASB aims to finalize the revised Conceptual Framework in 2016 Last updated October 2015 Overview The ED explains that the Conceptual Framework s primary purpose is to assist the IASB in developing and revising IFRSs even though it may be useful to parties other than the IASB and that the framework does not override any specific IFRS Should the IASB decide to issue a new or revised pronouncement that is in conflict with the framework the IASB will highlight the fact and explain the reasons for the departure going forward The accompanying ED Updating References to the Conceptual Framework contains proposed amendments to IFRS 2 IFRS 3 IFRS 4 IFRS 6 IAS 1 IAS 8 IAS 34 SIC 27 and SIC 32 in order to update those pronouncements with regard to references to and quotes from the framework so that they refer to the revised Conceptual Framework As the Conceptual Framework will mainly affect the IASB and its work while the proposals regarding the other pronouncements could also affect preparers the IASB considers granting a transition period of approximately 18 months for the amendments proposed in the EDs in order to give preparers time to identify understand and adjust to possible implications Other developments October 2015 On October 2 2015 to align with the IASB s extension the deadline for comments has been changed by the AcSB to November 25 2015 from October 26 2015 for both exposure drafts AcSB Exposure Draft Conceptual Framework for Financial Reporting and AcSB Exposure Draft Updating References to the Conceptual Framework August 2015 On August 12 2015 the AcSB issued the following EDs that corresponds to the IASB s EDs on these topics i AcSB Exposure Draft Conceptual Framework for Financial Reporting and ii AcSB Exposure Draft Updating References to the Conceptual Framework May 2015 On May 28 2015 the IASB published for public comment a comprehensive ED containing proposals for topical areas where it considers a revision and amendment of the existing Conceptual Framework necessary Included in the ED are proposals to revise the definitions of an asset and a liability to introduce guidance on measurement and derecognition and to set a framework for presentation and disclosure The main ED is accompanied by an ED containing proposals regarding references to the Conceptual Framework in other IASB pronouncements Related Discussions Conceptual Framework AcSB Jul 31 2015 The AcSB considered input from its Conceptual Framework Discussion Group and Academic Advisory Council on the IASB s Exposure Draft Conceptual Framework for Financial Reporting The AcSB is developing the points to be included in its comment letter to the IASB and will consider additional views from the Conceptual Framework Discussion Group as well as

    Original URL path: http://www.iasplus.com/en-ca/projects/ifrs/exposure-drafts/cf-iasb?set_language=en-ca (2016-02-10)
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  • Modifications du Cadre conceptuel de l’information financière [ES]
    de la version définitive du Cadre conceptuel qui est attendue en 2016 Dernière mise à jour Octobre 2015 Vue d ensemble L exposé sondage explique que l objectif principal du Cadre conceptuel est d aider l IASB à élaborer et à réviser des IFRS même si ce cadre peut être utile à d autres parties que l IASB De plus ce Cadre n a préséance sur aucune IFRS en particulier Si l IASB décide de publier une nouvelle prise de position ou de réviser une prise de position existante qui entre en conflit avec le Cadre le Conseil expliquera les raisons qui l ont poussé à prendre une telle décision L exposé sondage d accompagnement portant sur la mise à jour des renvois au Cadre conceptuel contient des propositions de modification d IFRS 2 IFRS 3 IFRS 4 IFRS 6 IAS 1 IAS 8 IAS 34 et de SIC 27 et SIC 32 visant à mettre à jour les renvois au Cadre et les extraits de celui ci dans ces prises de position pour qu ils fassent référence au Cadre révisé Étant donné que le cadre conceptuel aura principalement une incidence sur l IASB et sur son travail alors que les propositions visant les autres prises de position pourraient aussi avoir une incidence sur les préparateurs l IASB envisage d accorder une période de transition d environ 18 mois pour les modifications proposées dans l exposé sondage afin de donner le temps aux préparateurs d identifier de comprendre et de s ajuster aux différentes répercussions possibles Autres développements Octobre 2015 Le 2 octobre 2015 le CNC a décidé de reporter au 25 novembre 2015 la date limite de réception des commentaires sur les exposés sondages intitulés Cadre conceptuel de l information financière et Mise à jour des références au Cadre conceptuel initialement fixée au 26 octobre 2015 afin de refléter la décision de l IASB de prolonger sa propre période de consultation Août 2015 Le 12 août 2015 le CNC a publié les exposés sondages ci dessous qui correspondent à ceux de l IASB sur les mêmes sujets i Exposé sondage du CNC Cadre conceptuel de l information financière et ii Exposé sondage du CNC Mise à jour des références au Cadre conceptuel Mai 2015 Le 28 mai 2015 l IASB a publié aux fins de commentaires un exposé sondage contenant des propositions visant des aspects thématiques du Cadre conceptuel existant nécessitant une révision ou des modifications L exposé sondage contient des propositions visant à réviser les définitions d un actif et d un passif à introduire des indications sur l évaluation et la décomptabilisation et à mettre en place un cadre pour la présentation et les informations à fournir L exposé sondage principal est accompagné d un exposé sondage contenant des propositions visant des renvois au Cadre conceptuel qui se trouvent dans d autres prises de position de l IASB Related Discussions Cadre conceptuel CNC 31 juil 2015 Le CNC a tenu compte des commentaires formulés par son Groupe

    Original URL path: http://www.iasplus.com/fr-ca/projets/ifrs/exposure-drafts/cf-iasb?set_language=fr-ca (2016-02-10)
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  • Conceptual Framework — Comprehensive IASB project
    Conceptual framework 23 Oct 2014 The IASB continued its discussions on the staff draft for measurement bases As per request of the Board the draft only included two categories of measurement bases current and historical measures The Board agreed with the staff paper with one sweep issue remaining being the definition of the fulfilment value This issue will be discussed at the November IASB meeting In addition the Board discussed consequential amendments to the existing standards that will become necessary once the Exposure Draft on the Conceptual Framework is finalised The Board agreed that potential inconsistencies between the standards and the proposed Framework will be summarised in the Basis for Conclusions to the Exposure Draft and that references to the previous version of the Framework will be updated However the Board did not agree on any further changes to the standards After agreeing that all required due process steps had been taken the Board gave the staff the permission to ballot the Exposure Draft with a comment period of 150 days Four Board members expressed concerns about several issues that could potentially have them dissent from the Exposure Draft Conceptual framework 24 Sep 2014 At this meeting the IASB discussed remaining aspects of measurement implicaitons of long term investment and the distinction between liabilities and equity Conceptual Framework Transition requirements for the revised Conceptual Frameworks 16 Sep 2014 The IFRS Interpretations Committee discussed 1 the IASB s tentative decisions on transition and effective date for the revised Conceptual Framework and 2 the proposed transition guidance and effective date Conceptual framework 24 Jul 2014 The Board continued its redeliberations in the Conceptual framework project by having a discussion about cash flow based measurements the distinction between P L and OCI the scope and content of presentation and disclosure other elements the control of the asset definition the present obligation aspect of the liability definition derecognition the business model and transition and the effective date Conceptual framework 23 Jul 2014 The Board continued its redeliberations in the Conceptual framework project by having an extensive discussion about the measurement section Board member discussed the objective and the effect of the qualitative characteristics as well as measurement categories Conceptual framework 19 Jun 2014 The Board continued its redeliberations of the feedback in the Conceptual framework project In this session the IASB discussed the distinction between profit or loss and OCI economic resources and benefits executory contracts the unit of account communication principles as well as materiality under presentation and disclosure and the distinction between liabilities and equity Conceptual framework 21 May 2014 The Technical Principal on the Conceptual Framework project opened the session and noted that the staff had ten papers to discuss with the Board She noted that the first three papers to be discussed dealt with the definition of the elements and recognition criteria these papers were followed by two papers that dealt with reporting entity issues a paper on the going concern assumption and a series of papers that discussed potential

    Original URL path: http://www.iasplus.com/en-gb/projects/iasb-and-ifrs-projects/major/conceptual-framework-iasb?set_language=en-gb (2016-02-10)
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  • Major projects
    accounting policy and a change in an accounting estimate in relation to the application of IAS 8 An exposure draft is expected in the first quarter of 2016 at the earliest Disclosure initiative Principles of disclosure This research project on financial statement presentation is focused on broader challenges associated with disclosure effectiveness which ultimately may lead to a replacement for IAS 1 Presentation of Financial Statements IAS 7 Statement of Cash Flows and IAS 8 Accounting Policies Changes in Accounting Estimates and Errors in essence developing a disclosure framework for IFRS A discussion paper is expected in the fourth quarter of 2015 or the first quarter of 2016 Disclosure initiative Materiality This project seeks to help preparers auditors and regulators use judgement when applying the concept of materiality in order to make financial reports more meaningful A draft practice statement was published on 28 October 2015 with comments requested by 26 February 2016 Disclosure initiative Overview Provides a summary of projects in the IASB s overall disclosure initiative outlining summary progress on the short term and research projects the IASB has decided to consider as part of the broader initiative Financial instruments Macro hedge accounting A project to consider risk management strategies referring to open portfolios macro hedging which are not specifically covered by the IASB s project on general hedge accounting A discussion paper was published on 17 April 2014 A second discussion paper is exüected not before 2016 Financial instruments Comprehensive project A multi faceted joint IASB FASB project to rewrite the requirements for accounting for financial instruments consisting of a number of sub projects Insurance contracts Comprehensive project A major project to develop a comprehensive high quality standard that will address recognition measurement presentation and disclosure requirements for insurance contracts A targeted revised exposure draft ED 2013

    Original URL path: http://www.iasplus.com/en/projects/major/major-projects (2016-02-10)
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  • IASB publishes Discussion Paper for a new Conceptual Framework
    E Rights and obligations arising under options and forwards on an entity s own shares Appendix F Written put options on own equity and on non controlling interests Appendix G Overview of topics for the revised Conceptual Framework Appendix H Summary of questions for respondents The key issues dealt with in each chapter are summarised below Section 1 Introduction The first section offers background information it also describes the purpose of the conceptual framework and its status within the hierarchy of IASB pronouncements The discussion paper explains that the conceptual framework s primary purpose is to assist the IASB in developing and revising IFRSs even though it may be useful to parties other than the IASB and that the framework does not override any specific IFRS Should the IASB decide to issue a new or revised pronouncement that is in conflict with the framework the IASB will highlight the fact and explain the reasons for the departure going forward Section 2 Elements Core of this section is a clarification of the definitions of assets and liabilities the IASB believes to be necessary The framework will no longer refer to expected inflows or outflows of economic benefits but directly to the underlying resource or obligation An economic resource is defined as a right or other source of value that is capable of producing economic benefit Additionally the notion of probability will be removed from the definitions In addition to assets and liabilities this section also defines income and expense cash receipts and payments as well as contributions to distributions of and transfers between classes of equity Section 3 Additional guidance This section contains further guidance on the definitions of assets and liabilities as outlined in the previous section It aims mainly at testing the usefulness of the definitions in areas that have led to application problems in the past e g the questions of what constitutes a constructive obligation and whether economic compulsion can play a role etc Most attention is given to discussing the meaning of present obligation in connection with a liability three different views are presented and respondents are asked for their comments Section 4 Recognition Derecognition This section discusses the requirements for recognising assets and liabilities Generally all assets and liabilities are to be recognised unless recognising an asset or a liability is considered irrelevant or not sufficiently relevant to justify the costs for doing so or no measurement of the item would lead to a sufficiently faithful representation In these cases the IASB will be allowed to depart from the general completeness requirement For the first time the framework will also contain derecognition requirements The IASB suggests that an item is to be derecognised when it no longer meets the recognition criteria Variants are discussed for certain borderline cases Section 5 Equity The fifth section is dedicated to equity which continues to be defined as residual interest However the IASB suggest refining the definition New and rather revolutionary is the proposed introduction of a requirement to

    Original URL path: http://www.iasplus.com/en/news/2013/07/framework-dp (2016-02-10)
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