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Current Developments: IFRS - Q4 2018

Current Developments: IFRS - Q4 2018

This edition covers current developments as of December 31, 2018.

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Kristy Carscallen

Canadian Managing Partner, Audit

KPMG in Canada

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Current Developments

The effective date of IFRS 16 Leases has arrived

Communication and the transparent disclosures of the expected impact of adopting IFRS 16 on the financial statements are required as per IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors, and are expected by investors and regulators. Information about the impacts should be known or reasonably estimable and so entities should be able to provide entity specific qualitative and quantitative information in their 2018 annual financial statements.

What happened this quarter?

At its December meeting, the International Accounting Standards Board (the 'IASB' or the 'Board'): 

  • tentatively proposed an amendment to IFRS 17's presentation requirements that aims to provide practical relief to insurers by requiring them to present insurance contracts on the balance sheet at portfolio level – a higher level of aggregation than currently required; 
  • decided to add the IBOR Reform and the Effects on Financial Reporting project to the Board's standard-setting programme.

At its November meeting, the IASB tentatively proposed that the mandatory effective date of IFRS 17 Insurance Contracts and the fixed expiry date for the optional temporary exemption from applying IFRS 9 Financial Instruments granted to insurers be deferred by one year, to January 1, 2022.

In October the IASB: 

  • issued amendments to IFRS 3 that provide more guidance on the definition of a business; 
  • refined its definition of 'material' and issuedpractical guidance on applying the concept of materiality.

The IASB also continued its work on the projects Dynamic Risk Management and Rate-regulated Activities.

Highlights from the previous quarters

In the second quarter the IASB published a discussion paper for the project 'Financial Instruments with Characteristics of Equity'.

In the first quarter the IASB issued a narrow scope amendment to IAS 19 Employee Benefits, and released the revised Conceptual Framework for Financial Reporting

In addition, the IFRS 17 Insurance Transition Resource Group held three substantive meetings to understand the implementation questions raised with respect to the new Standard and to share their views on the accounting analysis.

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