Our IFRS publications address the following commonly asked questions: What are the requirements of IFRS? What does changing to IFRS involve? How does IFRS compare to other accounting frameworks? What do IFRS financial statements look like? Where can I get advice on applying and interpreting IFRS?
See our publications below for answers to these and other IFRS implementation questions.
For a printable overview of available publications, please view this PDF.
The July/August 2015 edition covers: Revenue recognition - IFRS 15 ED, Pension accounting requirements - ED on IAS 19 and IFRIC 14, Revenue recognition - News from the Revenue TRG, Cannon Street Press: Insurance and IFRS 9; IFRS implementation issues; Fair value measurement, Financial instruments with characteristics of equity, IFRIC rejections - IAS 2.
This publication presents illustrative consolidated financial statements for a fictional listed company, Value IFRS Plc, that manufactures goods, provides services and holds investment property. The financial statements comply with International Financial Reporting Standards (IFRS) as issued at 30 April 2015 and that apply to financial years commencing on or after 1 January 2015.
In this issue: Conceptual Framework: IASB issues exposure draft, segment disclosures: proposed changes arising from the IFRS 8 PIR, IFRS 9 and EFRAG: Close monitoring required, Cannon Street Press, NIFRICs by numbers: IAS 1.
In this issue: Revenue recognition: Proposed deferral of effective date; Employee benefit: IASB research project; Cannon street press: (Disclosure initiative; Annual improvements; Fair value of quoted instruments); Questions and answers: ‘Z’ for Zoos and IAS 41.
This In brief looks at the IASB's proposed deferral of the effective date of the IFRS 15, ‘Revenue from contracts with customers’, by one year, until 1 January 2018.
The April 2015 edition of IFRS News covers: Revenue recognition: Proposed clarifications and expedients; FASB deferral; Leasing: New standard approved for ballot; IFRS 15 implementation issues: March revenue TRG meeting. Cannon Street Press:(IC discussion of IFRS 11; Leasing project; Disclosure initiative; Conceptual framework);Questions and answers:‘Y’ for Yields.
Segment reporting is viewed as a compliance exercise by many entities and, as such, its importance is often overlooked by management. This In depth explains the key requirements of IFRS 8, ‘Operating segments’, and discusses practical issues that have evolved over time. It also offers insights to the importance of segment reporting for telling the ‘whole story’ of an entity.
In July 2014, the IASB published the complete version of IFRS 9, Financial instruments, which replaces most of the guidance in IAS 39. The final standard contains a new impairment model which will result in earlier recognition of impairment losses. This new In depth includes our views on some of the most common issues that have been raised by preparers and reviewers of financial statements as part of implementation of the new standard in relation to impairment.
In July 2014, the IASB published the complete version of IFRS 9, 'Financial instruments', which replaces most of the guidance in IAS 39. The final standard includes amended guidance on classification and measurement of financial assets from the previous versions of IFRS 9. This new In depth includes our views on some of the most common issues that have been raised by preparers and reviewers of financial statements as part of implementation of the new standard in relation to classification and measurement.
Commodities prices have declined considerably over the past year, with the most dramatic change experienced by the oil and gas industry. Crude oil prices have dropped by 60% over six months, and the fourth quarter of 2014 has seen impairment losses recognised for oil and gas assets. Canadian-based Talisman Energy recorded after-tax impairments during the fourth quarter of 2014 of approximately $1.37 billion, primarily as a result of declining oil prices.
This publication outlines the new IFRS standards and interpretations that come into effect for 2015 year ends. Three new standards have been issued: Financial instruments - IFRS 9, Regulatory deferral accounts - IFRS 14, and Revenue from contracts with customers - IFRS 15. A few narrow scope amendments to existing standards effective for 1 July 2014 have been EU endorsed as effective for on or after 1 January 2015 and the IASB has issued various other amendments that are subject to endorsement for EU entities.
IAS 23, ‘Capitalisation of borrowing costs’, is one of the shortest standards in IFRS. It has remained virtually unchanged since 1993, except that the option to expense borrowing costs related to acquisition or construction of qualifying assets was eliminated in 2009. However, practical implementation of this seemingly simple standard often raises questions for which the standard does not give clear answers. Challenges include specific versus general borrowings, when to start capitalisation, total borrowing costs eligible for capitalisation, and whether foreign exchange differences should be capitalised. These practical challenges are the focus of this In depth.
Recent months have been marked by increased volatility in global markets. This economic environment could lead to revised budgets and forecasts with an expectation of lower cash flows from existing non-financial assets. The amount of headroom in impairment tests is therefore likely to diminish. This In depth provides a more detailed look at 5 key areas to focus on when completing your impairment review for non-financial assets.
The March 2015 edition of IFRS News covers: New revenue standard: Convergence under pressure; Investor view: Accounting policies: Cannon Street Press (ED on IAS 1 amendments; Leasing project; Rate regulated activities) Questions and answers: ‘X’ for eXiting a business.
IFRS 13 expanded the guidance on assessing fair value measurements within the three levels of the fair value hierarchy. As a result, the classification as Level 1, Level 2 or Level 3 became required for non-financial assets and liabilities measured at fair value and disclosures of fair values in the notes to the financial statements. This publication sets out our views on some of the key considerations in determining the appropriate classification of fair value measurements.
IFRS 11 seems to have given rise to a record number of issues for the IFRS Interpretations Committee (IC) even before its widespread adoption.The IC published tentative agenda decisions on a number of these issues in November 2014 These might provide some additional clarity on the application of the standard, particularly the ‘facts and circumstances’ around classification as a joint operation. This In depth summarises the tentative conclusions reached by the IC and the practical implications. The conclusions are not expected to result in a significant change in how the standard is applied.
The axe: a much neglected tool for standard setting
Currency exchange legislation in Venezuela was amended in February 2015 to create a new system(known as SIMADI), which permits foreign exchange barter and cash transactions. SIMADI allows both individuals and entities to buy and sell foreign currency with fewer restrictions than other systems in Venezuela. In brief 2015-04 discusses the detail.
Written put options on non-controlling interests – read this for the answer!
The February 2015 edition of IFRS News covers: Financial volatility: Accounting implications; Revenue TRG: January meeting; IFRS in the EU: A good idea?; Cannon Street Press (Disclosure initiative; Employee benefits); and Questions and answers:‘W’ for Written options.
Many companies are now considering IFRS 9, the new accounting standard on financial instruments. IFRS 9 addresses all the relevant aspects on the accounting for financial instruments, including classification and measurement, impairment of financial assets and general hedge accounting. This publication presents a number of frequently asked questions and focuses on just one topic in IFRS 9: general hedge accounting.
Globally, the extractive industries (oil & gas, mining and metals) have suffered a lack of investor confidence, multi-billion dollar write downs, poor returns, volatile commodity prices and escalating operating costs. Compounding this challenge, the typical sources of funding might be more difficult to find, particularly in times when the equity or debt markets are not welcoming. Companies continue to look to alternative sources of finance and creative deal structures for growth and funding. This In depth helps identify the key features of the deal and how those features impact the accounting.
Pharmaceutical, biotech, medical device and other life sciences companies frequently deal with the highly judgmental and complicated area of determining whether an acquisition, investment or license should be accounted for as a business combination or an asset acquisition. This distinction matters as the accounting for a business combination varies significantly from the accounting for an asset acquisition, particularly in the pharmaceutical and life sciences industry. This In depth discusses the issue and some illustrative examples.
IFRS 9 introduces significant additional disclosure requirements relating to credit risk and expected credit loss allowances. Understanding the data and systems needed to meet these new requirements will be critical to ensuring the completeness of IFRS 9 project scopes, thereby avoiding revisions later in the project that could be costly and jeopardise project timings. Considering these disclosure requirements as part of the broader consideration of internal management reporting and investor communications will also likely deliver significant benefits. This ‘In depth’ sets out key considerations and what they will mean in practice.
Venezuela is a hyper-inflationary economy and the government maintains a regime of strict currency controls. Multinational companies are facing significant difficulty in repatriating earnings from Venezuelan subsidiaries. In brief INT2015-03 discusses the issue.
Convergence – is it worth it?
Recent months have been marked by increased volatility in global markets. This environment could lead to revised budgets and forecasts with an expectation of lower cashflows from existing non-financial assets. This In brief highlights the top 5 tips to focus on when completing your impairment review for non-financial assets.
Contingent consideration arrangements in acquisitions and disposals are common within the pharmaceutical and life sciences industry as they can be a convenient way of validating a company’s value as well as sharing economic risk between the buyer and the seller. In the industry, many acquisitions and disposals involve compounds or devices that have not yet received regulatory approval, which inherently increases the risk that the degree of commercial success of what is acquired or sold may not be known at the date of acquisition. The focus of this In brief is to discuss the accounting for contingent consideration from the seller’s perspective as this is an area where IFRS and US GAAP are not aligned.
IFRS 10 and IFRS 12 were issued in May 2011. Any new standard presents challenges and questions when preparers of financial statements start implementation. IFRS 10 retains the key principle of IAS 27 and SIC 12: all entities that are controlled by a parent are consolidated. However, some of the detailed guidance is new and may result in changes in the scope of consolidation for some parent companies. Experience suggests that the new requirements will have the greatest impact on consolidation decisions for structured entities (or ‘special purpose entities’) and for pooled funds managed by a third party. This In depth sets out our views on some of the most common issues that arise during the implementation of the new standards.
This publication provides an illustrative set of consolidated financial statements, prepared in accordance with International Financial Reporting Standards (IFRS), for a fictional investment property group (IP Group). The group prepares its consolidated financial statements in accordance with IFRS as issued by the IASB and is based on standards and interpretations for the financial year beginning on 1 January 2014.
Santa’s other present – the new revenue standard
‘Big’ banks and impairment – how do you compare to your peers?
Paragraph 4 of IAS 29 states that it is preferable for all entities that report in the currency of the same hyperinflationary economy to apply IAS 29 from the same date. We have listed below those countries that meet the criteria in IAS 29 to be classified as hyperinflationary at 31 December 2014.
In this publication we look at how a sample of European real estate companies have responded to IFRS 13 disclosure requirements in relation to investment properties, specifically, the quantitative information disclosed about significant unobservable inputs used in fair value measurement and the sensitivity of the fair value measurement to significant changes in those unobservable inputs.
Offsetting is a complex area of accounting, where understanding of the operational and contractual arrangements that an investment fund enters into is key to arriving at the appropriate accounting conclusion. A previous ‘in depth’ was issued in July 2014 entitled ‘offsetting financial instruments for financial institutions’. This ‘In depth’ sets out our views on the main questions we are seeing in practice specifically for investment funds
This publication contains a number of questions and answers on the application of the investment entities amendment on the exception to consolidation and assists the management of real estate structures in assessing whether an entity or entities within those structures meet the criteria of an investment entity.
IASB defines ‘profit or loss’ but what are the consequences for OCI?
The December edition of IFRS news covers the following: Joint arrangements: IC tentative agenda decisions; A present from Santa: New revenue standard; Year-end reporting: Top ten reminders; Cannon Street Press (investment entities: Amendments to IFRS 10, and IAS 28; IAS 1 narrow scope amendments; IFRS 2 proposed amendments; IAS 7 proposed amendments); Questions and answers:‘V’ for Vesting conditions.
The global version of the IFRS disclosure checklist 2014 has been updated to outline the disclosures required for December 2014 year ends. It also contains a section (Section H) which provides the disclosures required of entities that early-adopt IFRSs effective for annual periods beginning after 1 January 2014.
This publication is based on the requirements of IFRS standards and interpretations for the financial year beginning on 1 January 2014. The new standards and amendments effective for annual periods beginning on 1 January 2014 which are relevant to investment funds include; Amendments to IAS 32, ‘Offsetting financial assets and financial liabilities and Amendments to IFRS 10, IFRS 12 and IAS 27, ‘Investment entities’. The guidance and illustrative disclosure on these amendments are contained in either the main body of the financial statements or an attached appendix and are largely consistent with our 2013 publication.
The European Commission (EC) has announced an investigation into whether certain income tax legislation and rulings of European Union (EU) member states constitute unlawful ‘state aid’. State aid is an EC term that refers to forms of public assistance given to entities on a selective basis that has the potential to distort competition and affect trade. These developments and similar investigations of other jurisdictions might require consideration in the context of uncertain income tax positions. In brief INT 2014-15 looks at the details.
R&D funding arrangements between pharmaceutical companies and financial investors are often very complex and can last for many years over the different phases of a product’s life cycle - all the way from an early stage development project through to a marketed product. Differing levels of risk and reward may be transferred between parties depending on the stage in a product’s life cycle that an agreement is signed. When negotiating these arrangements, Pharma and financial investors often have competing priorities. This publication looks at the details.
This publication provides an illustrative set of consolidated financial statements, prepared in accordance with IFRS, for a fictional manufacturing, wholesale and retail group (IFRS GAAP plc). IFRS GAAP plc is an existing preparer of IFRS consolidated financial statements. This publication is based on the requirements of IFRS standards and interpretations for financial years beginning on or after 1 January 2014. Areas in which presentation has changed significantly since 2013 are highlighted. Significant changes include disclosures of the offsetting of financial assets and liabilities under IFRS 7 and enhanced impairment disclosures under IAS 36.
In this blog, Mary Dolson discusses the role of the IFRS Interpretations Committee and if they are doing enough to support the consistent interpretation and application of IFRS.
The November edition of IFRS news covers the following: Revenue TRG - October meeting, EFRAG - New governance structure, ESMA enforcement priorities, Cannon Street Press; Leases, Conceptual Framework, Research agenda, Questions and answers - ‘U’ is for underlying and The bit at the back.
Our IFRS pocket guide 2014 provides a summary of the recognition and measurement requirements of International Financial Reporting Standards published up to August 2014. This quick-reference guide is intended for a variety of audiences, including finance directors, financial controllers and other members of the finance team, as well as broader management, actuaries, lawyers, merchant bankers and analysts.
In this blog, Andrea Allocco discusses rate regulation.
This illustrative set of condensed interim financial statements reflects IFRSs in issue at 1 March 2014 that are required to be applied by an existing preparer of IFRS financial statements with an annual period beginning on or after 1 January 2014. Preparers should check for IASB pronouncements made after 1 March that may apply to their interim financial statements.
"This publication is designed to alert companies to the major differences between IFRS and US GAAP as they exist today and to the timing and scope of accounting changes that the boards’ standard setting agendas will bring. "
In May 2013, the IASB issued IFRIC 21 'Levies' which clarifies the existing guidance in IAS 37 'Provisions, contingent liabilities and contingent assets' for recognising an obligation to pay a levy that is not income tax. The interpretation could result in recognition of a liability later than previously, particularly in connection with levies that are triggered by circumstances on a specific date.