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In December 2014, the Accounting Standards Council (ASC) issued FRS 109 Financial Instruments. This standard replaces most of the detailed guidance on financial instruments under FRS 39. While the effective date (January 2018) may seem a long way off, companies may benefit from early decisions regarding when and how to transition to FRS 109.
The standard offers a range of transition options. At one end of the spectrum, an entity can choose to restate comparatives to comply with the classification, measurement and impairment requirements in FRS 109. At the other end of the spectrum, an entity can choose not to restate comparative and instead recognise the cumulative effect in equity (the difference between the carrying amounts under FRS 39 and FRS 109 at the date of initial application) – and make no adjustment to the comparative information.
In October 2014, the Companies (Amendment) Bill was passed by Parliament. On 15 April 2015, the Accounting and Corporate Regulatory Authority (ACRA) announced that the legislative changes to the Companies Act will be effected in two phases. In this issue, we highlight the key amendments which will have implications on financial reporting.
With the arrival of the new revenue standard – FRS 115 Revenue from Contracts with Customers, companies in the food, drink and consumer goods (FDCG) sector will need to review their arrangements with distributors and retailers – e.g. trade incentives, warranties, returns and licences as the requirements of the new standard may change the amount or timing of the revenue recognised. In this issue, we highlight the key areas of potential changes affecting FDCG companies.
Less than a year after publishing their joint standard on revenue recognition, the International Accounting Standards Board (IASB) and Financial Accounting Standards Board (FASB) are back in standard-setting mode. In their February and March 2015 meetings, the Boards agreed to propose changes to the new standard and in different ways. Find out more about what the decisions could mean for you in this issue.
Credit adjustment for the valuation of derivatives is an area of increasing focus, and most entities do not recognise or calculate these adjustments correctly. In this issue, we highlight the key factors to consider when determining whether credit adjustments are relevant.