The Financial Accounting Resource Center™ is a comprehensive research service that provides the full text of standards, the latest news from the Accounting Policy & Practice Report ®,...
Nov. 22 — An international accounting standard on financial instruments should come into force in the European Union within the next few weeks, the chief executive officer of the European Financial Reporting Advisory Group said Nov. 21.
International Financial Reporting Standard 9: Financial Instruments will be officially transposed into EU law when it’s printed in the Official Journal of the European Union, as is expected by the end of the year, EFRAG CEO Andrew Watchman said at the 2016 Meet the Experts Conference in London.
EFRAG, a private organization partly funded by the European Commission, offers the EC advice on whether newly published or revamped international financial reporting standards should be endorsed for use in the EU.
The European Parliament last month concluded its three-month scrutiny of the standard with a “substantive endorsement,” Watchman said.
IFRS 9 replaces International Accounting Standard 39: Financial Instruments: Recognition and Measurement.
EFRAG in September 2015 submitted a letter to the EC in which the group said IFRS 9 “would bring a distinct improvement over the existing requirements in IAS 39 in the accounting for basic lending instruments, in the impairment of financial assets and hedge accounting.”
Looking ahead, EFRAG is targeting mid-March 2017 for issuing its final endorsement advice on IFRS 16: Leases, which the International Accounting Standards Board published in January 2016.
The group currently is soliciting feedback on the standard, with a comment deadline of Dec. 8.
During the consultation EFRAG is gauging IFRS 16’s potential impact on financial statements, such as its effects on balance sheets and statements of cash flows.
The group also is assessing the standard’s broader effects, including its influence on:
Separately, John Hitchins of the U.K. Financial Reporting Council—which sets accounting, auditing and actuarial standards for the U.K. and Ireland—highlighted FRC’s recent work and its expectations for improvements in financial reporting.
FRC has found that, despite the differences between judgments and estimates in accounting practice, “some companies still muddle them up,” he told meeting attendees.
Judgments are choices among accounting options, Hitchins said in response to a question, and estimates are predictions about future accounting numbers.
“We continue to see critical judgment disclosures that aren’t sufficiently specific,” he said.
Estimation uncertainty also creates problems in financial reporting. Hitchins said the best disclosures about uncertainty are specific and examine particular assumptions a company has made.
FRC this year also found deficiencies in how U.K. companies use alternative performance measures (APMs).
Hitchins said some entities:
FRC will look for companies to improve their APM disclosures in the coming years, Hitchens said.
In addition, “We expect companies to step up to the mark and report in a way that is fair, balanced and understandable,” he said.
To contact the reporter on this story: David R. Jones in London at email@example.com
To contact the editor responsible for this story: S. Ali Sartipzadeh at firstname.lastname@example.org
Copyright © 2016 Tax Management Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)