PwC appreciates the International Valuation Standards Council (IVSC) Standards Board (board) efforts and welcomes the opportunity to provide comments on the exposure draft (ED) that sets out the board’s proposals aimed at providing information on credit and debit valuation adjustments. Our comment letter outlines our general comments to the proposal and responds to certain specific questions for comment in the appendix.
In this comment letter, we respond to the boards tentative agenda decision: IFRS 2, Share-based payment – price difference between the institutional offer price and the retail offer price for shares in an initial public offering. We support the committee’s decision not to take this question onto the agenda but not for the reasons given. We are concerned that the reasons given for the agenda decision will increase diversity in practice regarding the application of IFRS 2 paragraph 13A and may also lead to diversity in the application of IFRS 13.
In this comment letter, we do not object to the board’s proposal to restore the use of the equity method as one of the options to account for investments in subsidiaries, joint ventures and associates in an entity’s separate financial statements. However, we do not support the requirement for retrospective application of the exposure draft nor the proposed consequential amendment to IAS 28, Investments in Associates and Joint Ventures.
While overall we agree with ASEC’s proposed restructuring and revised TSP and Criteria exposure draft, within our response we specifically highlighted and provided examples where some criteria could be further enhanced.
The PwC global network of firms expresses support of the proposed interim standard on regulatory deferral balances. The interim standard will help resolve practice problems in some jurisdictions and reduce the barriers to adopting IFRS, but will not increase diversity in practice among entities that already apply IFRS. Our letter also provides responses to the board's specific questions.
In this comment letter, the PwC global network of firms responded to the IASB’s exposure draft on Financial instruments: Expected credit losses. The PwC global network continues to support the development of a single converged model for credit impairment under both IFRS and US GAAP. We believe an expected loss approach that requires constituents to consider a broader information set, including future expectations, represents a significant improvement as compared to the incurred loss model used today.
The PwC global network of firms supports the board’s efforts to gather information on the topic of rate regulation and provides suggestions for the board to consider for the discussion paper phase of the project.
PwC supports the board’s efforts in clarifying whether an entity is required to discontinue hedge accounting when an over-the-counter (OTC) derivative is novated to a central counterparty (CCP) as required by law or regulation. We also appreciate the board’s responsiveness in addressing this urgent issue in a pragmatic way, as requiring entities to treat such novations as a discontinuance of hedge accounting would not provide useful information to investors.
PwC agrees with the board’s objectives to amend IFRS 9 and commend the board on their progress in achieving those objectives. The letter includes key comments that we would like to raise with the board.
PwC generally supports the proposals and believes they will heighten the auditor's focus on the potential for material misstatement, particularly material misstatement due to fraud, arising from relationships and transactions with related parties, significant unusual transactions, and financial relationships and transactions with executive officers.
PwC believes that the audits of brokers and dealers should be conducted in accordance with PCAOB auditing and attestation standards once the SEC adopts Rule 17a-5 and, therefore, supports the changes to the Board's rules to reflect its pending jurisdiction over the auditors of brokers and dealers.
PwC provides its perspective on the rules to be reviewed in accordance with the requirements of the Regulatory Flexibility Act. PwC's comments are focused on auditor independence requirements approved by the SEC in November 2000, highlighting areas where the firm believes those rules may have a detrimental impact on small companies, investors and the U.S. capital markets.
PwC global network of firms believes that the time is right to significantly enhance auditor reporting. Valuable enhancements can be made now that move us some way to achieving the goal of more informative and valuable auditor reporting. As solutions are developed, it is critical that there be active, continuous and open dialogue amongst auditing standard setters, regulators, users and other stakeholders. PwC global network urges the IAASB to work in collaboration with the PCAOB in relation to their respective consultation papers to develop solutions that work globally.
PwC global network of firms believes that the proposed standard provides a strong basis for the performance of all assurance engagements and will facilitate consistent high quality engagements, capable of being supplemented by clearly tailored topic-specific ISAEs as required, in response to the needs of users. PwC global network also believes that the revisions to the requirements and application material to better articulate the defining characteristics of a limited assurance engagement, together with the principles and differences between attestation and direct engagements, are useful.