IFRS Foundation Proposes Update to IFRS Taxonomy 2017 for Annual Improvements

The IFRS Foundation has published proposed Updates to the IFRS Taxonomy 2017 (Proposed Update) for changes to International Financial Reporting Standards (IFRS) resulting from annual improvements to IFRS by the International Accounting Standards Board (IASB). The comment deadline for the Proposed Update is 29 January 2018.

The Proposed Update incorporates recent updates for IFRS and amendments to IFRSs issued by the IASB.

This Proposed Update includes improvements related to:

  • Enhancements to the data model relating to continuing or discontinued operations
  • Disaggregation of disclosures in International Accounting Standard (IAS) 19, Employee Benefits
  • Disclosures in IFRS 7, Financial Instruments: Disclosures, relating to initial application of IFRS 9, Financial Instruments.

The Proposed Update and the supporting materials are available for download on this link. http://www.ifrs.org/projects/work-plan/ifrs-taxonomy-update-2017-annual-improvements/comment-letters-projects/proposed-ifrs-taxonomy-update-and-comment-letters-2017-annual-improvements/

FASB to Reduce Implementation Burden of Lease Standard

At its meeting on 29 November 2017, the US Financial Accounting Standards Board (FASB) agreed on an approach to reduce the costs and burden of implementing its new standard, FASB Accounting Standards Codification™ Topic 842, Leases. The FASB expects to issue guidance in the form of a final Accounting Standard Update (ASU) and to propose an ASU with transition guidance.

Under ASU No. 2016-02, Leases (Topic 842), a calendar year public entity presenting three year comparative financial statements that adopts the new standard as of the effective date (1 January 2019) is required to report (in 2019) as if the standard had been adopted effective 1 January 2017 (the earliest comparative period presented). Many companies have not yet begun the process of implementing the new lease guidance.

Land Easements - Final ASU

In response to feedback on the FASB’s proposed ASU, Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842, the FASB decided to issue a final ASU that would: (1) provide an optional transition practical expedient that, if elected, would not require an organisation to reconsider their accounting for existing land easements that are not currently accounted for under Topic 840, Leases; and (2) clarify that new or modified land easements should be evaluated under Topic 842, Leases, once effective.

Topic 842 Transition - Proposed ASU

The FASB also directed its staff to draft a proposed ASU, with a comment period of 30 days, which would add: (1) an option for transition to the new Lease standard without providing comparative period financial statements. Instead, an organisation would apply the transition provisions of the leases standard at its effective date; and (2) a practical expedient that would permit lessors not to separate nonlease components from the related lease components if certain conditions are met. This practical expedient could be elected by class of underlying assets, and if elected, certain disclosures would be required.

The FASB report on its Tentative Board Decisions on this matter is available on this link. http://www.fasb.org/cs/ContentServer?c=FASBContent_C&pagename=FASB%2FFASBContent_C%2FActionAlertPage&cid=1176169472980

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