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Newsletter „Beyond the GAAP“ 137

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As the end of the year approaches, we’ve reached the time when European enforcers publish their recommendations for year-end financial reporting. Unsurprisingly, the key recommendations from ESMA and the AMF (the French market regulator) focus on IFRS 16 – Leases, IFRS 15 – Revenue from Contracts with Customers, and IFRS 9 – Financial Instruments. In this issue, we review the topics highlighted by the enforcers in their published recommendations.

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Newsletter „Beyond the GAAP“ 136

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September saw the publication of two long-awaited decisions by the IFRS Interpretations Committee (IFRS IC). One related to determination of the lessee’s incremental borrowing rate when applying IFRS 16, and the other to the classification and presentation of liabilities or assets related to uncertain tax positions. This therefore seemed the ideal time to present our study of information on the impacts of initial application of IFRIC 23 presented by a sample of French and European issuers (CAC 40 and Euro Stoxx 50) in their IFRS interim financial statements to 30 June 2019.



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Newsletter „Beyond the GAAP“ 135

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The half-yearly financial statements stand between you and your well-earned summer break, so it may be worth taking a look at the IFRS IC’s agenda decisions on IFRS 15, IFRS 16 and cryptocurrencies. After that, you could take our crossword away with you - a light-hearted edition that brings the series to a close.


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Newsletter „Beyond the GAAP“ 134

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The half-yearly financial statements stand between you and your well-earned summer break, so it may be worth taking a look at the IFRS IC’s agenda decisions on IFRS 15, IFRS 16 and cryptocurrencies. After that, you could take our crossword away with you - a light-hearted edition that brings the series to a close.


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Newsletter „Beyond the GAAP“ 133

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As announced last month, the IASB has begun to publish a number of exposure drafts. With consultation deadlines phased from June to September, these will keep stakeholders busy throughout the summer.

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Beyond the GAAP 132

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This year, it wasn’t accounting that made the news in April... A chance for our readers to enjoy the holidays and the month of May.

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Beyond the GAAP 131

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In March, the IASB completed its marathon discussions on the proposed amendments to IFRS 17 – Insurance Contracts (see our ‘A Closer Look’ feature). The Exposure Draft is now scheduled for publication at the end of June, and the Board has tentatively decided that the comment period will be three months (thus including August).

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Beyond the GAAP 130

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News from the IASB continues to be dominated by work to amend IFRS 17, to which we return in this edition’s special study. This project even seems to overshadow progress on other issues, such as the presentation of financial statements, or the finalisation (with no changes to the standards) of work on segment reporting and interest rates. The fact remains that the latest news from the March IASB meeting suggests that there is no appetite, on the IASB’s part, for change on the thorniest aspect of IFRS 17, the level of contract aggregation.

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Beyond the GAAP 129

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With annual report season in full swing, this issue of Beyond the GAAP is a slightly quicker read than last month’s issue. However, it does contain some particularly significant news, notably a number of interesting agenda decisions published by the IFRS Interpretations Committee.

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Beyond the GAAP 128

Following on from last issue’s feature, which provided a general overview of standards applicable at 31 December 2018, Beyond the GAAP details, in special studies, two issues that may impact your financial statements either immediately with the first study on how to account for hyperinflation in Argentina, or more prospectively with the IASB’s latest proposals on the costs to be taken into account to determine whether a contract is onerous.

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Beyond the GAAP 127

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Ahead of the preparation of financial statements at 31 December 2018, Beyond the GAAP summarises the standards applicable to the current year and revisits the information published by European entities on the introduction of IFRS 16 at 30 June 2018 - information which must be significantly expanded in December 2018.

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Beyond the GAAP 126

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During October, the European legislators have endorsed interpretation IFRIC 23 – Uncertainty over Income Tax Treatments. Meanwhile, the IASB has published new short, but focused, documents.

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Beyond the GAAP 125

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As the IASB is asked to re-examine some aspects of IFRS 17, we enter a period of uncertainty as regards both EFRAG’s work on the endorsement advice and the likely effective date of the standard. This also has implications for the deferral of IFRS 9, an alternative which many European bancassurers and insurance companies opted for. Meanwhile, the IFRS IC has published four agenda discussions; in this issue, we discuss the two relating to capitalisation of borrowing costs.

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Beyond the GAAP 124

This issue of Beyond the GAAP brings a piece of good news for our readers, as we all return to work following a well-deserved break: our financial instruments experts have saved you some effort by reading and summarising the IASB’s particularly dense Discussion Paper on the classification of financial instruments as liabilities or equity, published at the beginning of the summer. See our ‘A Closer Look’ feature for our summary of the DP. Finally, a spot of revision to help you get back into the swing of things: our crossword this month is a compilation of clues from previous crosswords.

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Beyond the GAAP 123

After focusing on half-yearly reporting and on IFRS 15 and IFRS 9 in our last edition, this month’s special study presents a Benchmark on disclosures by entities at 31 December 2017 on the future impact of IFRS 16.

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Beyond the GAAP 122

Target: the half-year accounts! With the disclosures required by the two standards that came into force on 1 January 2018 and the full list of applicable texts, three ‘A Closer look’ studies will support you in their preparation.

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Beyond the GAAP 121

Again this month IFRS 9 and IFRS 15 take centre stage in our highlights as they are the focus of attention for market regulators and the Monitoring Board of the IFRS Foundation.

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Beyond the GAAP 120

The year began quietly with few major developments relating to standards, but March has seen a whole series of projects coming to fruition.

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Beyond the GAAP 119

With less than a year to go before the effective date of IFRS 16 on Leases, the report of the ANC’s (The French accounting standards setter) decisions on the duration of 3/6/9 leases, published in February, is certainly the most anticipated announcement for French entities.

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Beyond the GAAP 118

Since 1 January 2018, IFRS 9 - Financial instruments and IFRS 15 - Revenue from Contracts with Customers have been effective, as the the IASB headline announced on its website on 8 January.

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Beyond the GAAP 117

2017 ended fairly quietly, since the European Commission had already endorsed several texts in November and the IASB’s December meeting decided to postpone publication of most of its texts and draft texts, with the exception of the annual improvements to IFRSs, which we discuss in this month’s ‘A closer look’ study. This being the case, the implementation of IFRS 9 and IFRS 15 in January 2018 will be more than enough to keep entities and their auditors busy, on top of the preparation of the 2017 financial statements.

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Beyond the GAAP 116

Over the past decade, the IASB has been working on the process of converging IFRS with US GAAP, and this month saw EU endorsement of the remaining resulting standards. With implementation now set to go ahead, this marks the end of a chapter. The one remaining major standard awaiting endorsement – namely IFRS 17 - Insurance Contracts – was not a joint project with the FASB, and moreover is not scheduled for endorsement until the end of next year.

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Beyond the GAAP 115

The IASB has put some last-minute finishing touches to IFRS 9, with an amendment on debt instruments with symmetric prepayment options and with the inclusion (in the Basis for Conclusions) of its analysis of the standard’s provisions on the modification of financial liabilities.

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Beyond the GAAP 114

After a quiet summer on the accounting front, September started brightly with two exposure drafts and a Practice Statement from the IASB.

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Beyond the GAAP 113

July was a busier period for Europe than for the IASB. The European Commission sent two draft texts (deferred application of IFRS 9 for insurers and financial conglomerates, and IFRS 16 on Leases) to the European Parliament and Council for endorsement before the end of the year, while ESMA published three documents on financial information and its enforcement activities.

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Beyond the GAAP 112

June 2017 saw the publication of IFRIC 23 – Uncertainty over Income Tax Treatments. According to this Interpretation, entities must now assume that any uncertainty over income tax treatments will be examined by the taxation authorities, and must consider the probable outcome of such examination when determining the amount of income tax to be recognised in the financial statements.

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Beyond the GAAP 111

IFRS 17 – Insurance Contracts has been in the pipeline for more than ten years, and finally made its appearance during the night of 16 to 17 May 2017. On 17 May, the IASB hosted two interactive webinars on the standard, and launched a dedicated webpage to support implementation. IFRS 17 will replace the interim standard IFRS 4 from 2021, meaning insurers will no longer be able to use local accounting frameworks for insurance contracts. The new standard is therefore likely to cause substantial upheaval, with impacts varying significantly from one company to another.

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Beyond the GAAP 110

For the second time in its history, the IASB has launched a rapid-turnaround consultation with a comment period of just 30 days – the minimum permitted by its Due Process Handbook. What is more, it once again relates to financial instruments. The IASB is rushing it through in the hope that the document will be ready for first-time application alongside IFRS 9 in 2018. It is touch and go, as the basic principle needs to be approved by stakeholders and the amendments then need to go through the EU adoption process!

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Beyond the GAAP 109

While they do not form an official part of the IASB’s Disclosure Initiative, the amendments proposed to IFRS 8 on operating segments are certainly in the same spirit. With this consultation, and the consultation around the discussion paper on Principles of Disclosure, the IASB has started the ball rolling for the 2017 round of deliberations on the theme of Better Communication. In Europe, the recently published standard on leases has just completed the first stage of the adoption process, EFRAG having just issued a recommendation for rapid endorsement to the European Commission.

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Beyond the GAAP 108

IASB Vice-Chair Sue Lloyd has been appointed to head the IFRS Interpretations Committee, and four IASB members who supported the recent major standards have been reappointed for a second term.

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Beyond the GAAP 107

After a pause of several months, the IASB has started the year by presenting its annual improvements in a short exposure draft, with the next consultations expected as of April. It is also continuing to offer support on new standards, publishing an article on IFRS 16 – Leases, noting in passing that there are some decisions to be taken and judgments to be made, and urging entities not to delay the launch of their transition process.

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Beyond the GAAP 106

Following a November issue that was packed with ‘A Closer Look’ features, this month’s Beyond the GAAP is unusual in not containing any at all. However, our monthly crossword will provide a useful reminder of key issues in IFRS over the 2016 reporting period.

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Beyond the GAAP 105

The adoption of IFRS 9 by the European Union marks the end of the work carried out by EFRAG under the leadership of Françoise Flores, coincidentally falling at the same time as her appointment as a member of the IASB. This appointment will maintain a French presence on the Board, following the end of Philippe Danjou’s term last October.

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Beyond the GAAP 104

Improving the effectiveness of financial reporting is one of the IASB’s key focal areas for the coming years. Four projects fall under the theme of “Better communication”, including the Disclosure Initiative and a research project on the format of primary financial statements.

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Beyond the GAAP 103

The IASB’s update to its work plan on 23 September 2016 gives us a good idea of what is on the cards for IFRS over the next few months. In addition to the Insurance Contracts standard, which is scheduled for publication in March, and the Conceptual Framework (date not yet set), the next key milestones relate to research projects. Discussion Papers have been announced on business combinations under common control, dynamic risk management, financial instruments with characteristics of equity, and rateregulated activities.

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Beyond the GAAP 102

The IASB’s major projects are drawing towards their conclusion. Since 2014, the IASB has published standards on revenue, financial instruments and leases, and it is expected to complete the Insurance Contracts project and the Conceptual Framework by the end of 2017.

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Beyond the GAAP 101

“You have been living in a bit of a building site for much of the last decade. However, the good news is that the majority of the structural work is now complete. The heating and plumbing systems are now in good shape.” With these words Hans Hoogervorst described his impression of the progress made in recent years at the start of the IFRS Foundation Conference in Zurich

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Beyond the GAAP 100

Since the first edition in November 2006 we accompany you in the world of IFRSs.

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Beyond the GAAP 99

The IASB’s publication of amendments to IFRS 15 on 12 April was followed, less than a month later, by the FASB’s publication of slightly different amendments to Topic 606.


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Beyond the GAAP 98

The IASB has published amendments to IFRS 15 – Revenue from Contracts with Customers, which will have the same effective date as the standard itself, i.e. 1 January 2018. They emerge from the discussions of the Transition Research Group (TRG), which was set up jointly by the IASB and FASB to work on issues relating to implementation of the standard.

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Beyond the GAAP 97

Just over a month after the IASB published IFRS 16 – Leases, the FASB has published its own, broadly equivalent, standard. There is still one major difference between the two frameworks, namely the timing of recognition of the total lease expense (the FASB has opted for straight-line recognition for operating leases). However, the rules are the same as regards the principle of recognition in the balance sheet, the definition of a lease, determining the lease term, and the accounting treatment of variable lease payments.

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Beyond the GAAP 96

The long-awaited (but not necessarily hoped-for) publication of IFRS 16 on 13 January was accompanied by a number of educational tools designed to facilitate understanding of the standard and of the issues at stake: Project Summary and Feedback Statement, Effects Analysis, Webcast, Video: Introducing the new Leases Standard, Investor Perspectives - A New Lease of Life.

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Beyond the GAAP 95

As this issue goes to press, the IASB has just published the final version of the IFRS 16 – Leases standard. Originally scheduled for publication in time for Christmas, it turned out to be more of a New Year’s gift. Now it is finally here, issuers need to start preparing to recognise operating leases in the balance sheet from 2019 onwards.

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Beyond the GAAP 94

The end of the year is approaching rapidly! This means it is time for us to provide our yearly overview of the small number of standards and amendments that are mandatory for the 2015 financial period, as well as those for which early application is permitted.

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Beyond the GAAP 93

As autumn comes around again, it is time for ESMA’s annual publication on its priorities for 2015 financial statements. This year it is focusing on two key topics: the impact of financial market conditions (interest rates, commodities prices, country-specific risks) on issuers’ financial situation, and the statement of cash flows, which is key to understanding and assessing issuers’ performance.

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Beyond the GAAP 92

By the end of the month, the IASB will have received the comment letters on its proposals for clarifying IFRS 15. Although they arise out of the work of the Joint Transition Resource Group (TRG), the amendments put forward by the IASB differ from those proposed by the FASB in its own consultation documents.

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