字幕表 動画を再生する 英語字幕をプリント Welcome to Deloitte financial reporting updates our webcast series for issues and developments related to the various accounting frameworks. This presentation is bringing clarity to an IFRS world, IFRS quarterly technical update. I am Jon Kligman, your host for this webcast. I am joined by others from our National office. Before I tell you about our agenda, a couple of housekeeping items. If you would like a copy of the slides for reference, they are available for download on the same webpage that you access the webcast. You can direct colleagues to the webcast link by referring them to Deloitte Canada Center for Financial Reporting, which is accessible at iasplus.com. Simply select Canada English from the dropdown menu at the top right of the webpage. Now let’s get onto our agenda. First you’ll hear from Kerry Danyluk, who’ll provide some year-end reminders and discuss feedback and commentary received from the regulators. After Kerry, Alexia Donoghue will discuss financial reporting implications, various economic developments that we have been experiencing. After Alexia, we’ll turn the presentation back over to Kerry, who’ll provide an update on upcoming IASB projects. I would like to remind our viewers that our comments on this webcast represent our own personal views and do not constitute official interpretive accounting guidance from Deloitte. Before taking any action on any of these issues, it’s always a good idea to check with a qualified advisor. Please note that we are not issuing professional development certificates for this webcast. Please check with your institute or order regarding potential continuing professional development credits. I would now like to welcome our first speaker, Kerry Danyluk. Kerry joined Deloitte as a Partner in 2006 with over 20 years’ experience in public practice, standard setting and industry. Kerry is currently a Partner in Deloitte’s National Assurance and Advisory Services and specializes in a variety of areas of IFRS, ASPE and not-for-profit accounting. Over to you Kerry. Thanks Jon. Well if we move into the first slide here on the year end reminders and regulatory feedback, I guess the first bit of good news, hopefully it’s good news, is that for this year end there really are not a whole lot of amendments or at least not large amendments that are effective, that people need to worry about adopting for this year’s financial statements. There are really instead kind of a series of fairly narrow scope amendments. We have a list of them, a summary of them provided in Appendix A to this presentation for your reference and we also went through in some detail related to these amendments in the first quarter webcast and the link is provided there on your screen. So, one of the things that we did want to talk about and again this is a little bit of a repeat from the third quarter webcast, but we did want to just remind people for year end, some of the things that the Canadian securities administrators have gone through in their staff notice that they issued in July. So, this slide just has a series of little summaries of some of the different areas that the regulators focused on. So, first of all the operating segments. So, what the regulators were noting here is that there were some failures to disclose revenue by geographic area and by major customers. So, as you know IFRS 8 includes both of these. So, on top of just the regular disclosure of the operating segments and the reportable segments, there are some requirements to also provide revenue by geography and some disclosures surrounding major customers if there are some and the regulators noted that in some cases filers were being deficient in this regard. So, just a little reminder there. In terms of business combinations, the observation there was it was sometimes unclear whether intangibles have been separately identified in the purchase price allocation and as you know you have to separately identify all the identifiable intangibles separate from goodwill, goodwill does not get amortized, whereas the intangibles would tend to, so that kind of makes bit of a big difference and I guess just another reminder that there is an allocation period that’s allowed under IFRS 3 the Business Combinations standard. So, if you have done a business combination late in the year and you didn’t have a chance to finalize the purchase price allocation, just a reminder that there is a little bit of a time period that you are allowed up to one year to finalize and gather all the information that you need to fair value all the separately identifiable items that were required in the business combination. The next point relates to fair value measurement in IFRS 13. So, IFRS 13 is a reasonably new standard and the regulators are still observing some areas of comment regarding the description of valuation techniques and inputs used especially for the Level 3 fair value measurements and so, you’ll recall that Level 3 fair value measurements are the ones that have the most subjectivity to them. They are the ones that would have some significant inputs or data points that are not market observable. So, the standard really requires you to go a little bit further in terms of describing those non-market observable inputs and perhaps also providing some sensitivity analysis around that and so the observation there is that may be people were not being fully compliant with all of those requirements or at least those were the questions being raised. And then the last point on the slide is impairment of assets, which has of course been a bit of a theme for the last couple of years now and so the points here are there are disclosure requirements when an impairment loss has been recorded and so just to keep in mind that compliance with all of those situations, the things that gave rise to the impairment and so on, how the impairment was calculated, some of the assumptions there and the significant areas of judgement. And also remember that there is a requirement to, of course you know goodwill will tend to be tested every year for impairment, but for other assets it’s an indicator based test and so just making sure to keep in mind the indicators and making sure that testing is done when indicators are present, which might even be in the quarters as well as year end. So on the next slide, something we haven’t talked about before is some observations coming out of the SEC and these are SEC comment letters out of the US for companies, foreign private issuers who file using IFRS. So, these would include certainly Canadian filers who are SEC registrants and use IFRS. So, the SEC comment letter, Deloitte’s report on that came out in October 2015 and I think in a couple of slides we have a link, to where you can find that report if you are interested in going and looking at it, but just for now a couple of observations regarding some of the commentary that has been raised by these regulators about companies using IFRS. So, the first comment relates to the situation where expenses are presented by function. So, as you could see on the slide, we have got cost of sales, we have got administrative expenses and so on. So, basically kind of a typical example of functional presentation. So, IAS 1 does require that when this functional presentation is used that also some disclosure should be provided in the notes regarding the cost by their nature and so an example of nature would be depreciation, employee benefits expense and so on. So, when you follow this type of presentation you are supposed to be providing information about those costs in the notes to the financial statements and so, just a reminder because the SEC has observed that, that is not always happening. On the next slide, the point is the use of the line item operating expenses. So, under IAS 1, you are not required to have this line called operating expenses in the income statement, but it is a fairly common presentation and if you do use it, there are some parameters that you can find in IAS 1 in the basis for conclusions, we have quoted the paragraph reference there on the slide. So, the point here is that we should not be excluding things that are of an operating nature from the operating activities part of the statement. So, for example, if we had restructuring expense, it should be up above the operating activities line, inventory write-down. So, there are a couple of examples that are actually given in the standard of things that you would not expect to be excluded from that income from operations line and so, beyond the examples that are given in the standard, there is some judgment involved of course. Oftentimes, for example, we do see finance expenses below. So, it is a matter of judgment about where things appear in the financial statements, but I guess the point is if things are being excluded from the operating activities line, in other words presented below that, it is possible that, that presentation will be queried if the reviewer feels that things of an operating nature have been moved too far down, i.e. below the operating activities line on the income statement. The next area of comment was around consolidation disclosures. So, a couple of points here. So, first of all, the IFRIC, so the interpretations committee of the IASB issued a rejection notice in July 2015, which is noted on the slide and what this means is that they were posed a question and decided not to provide further clarification in the form of a project to develop may be some new standards in this area or clarifications to the standards, but when they did report on this and the reasons for not taking on this issue, the question that was raised by the person submitting the issue was basically to what extent can we summarize our disclosures around joint ventures and associates. So, this is getting at IFRS 12, which again is a reasonably new standard where there are some disclosure requirements regarding material joint ventures and associate. So, basically the investees that you would equity account for and so the question was can we add them together, aggregate them if we have got more than one and really the IFRIC rejection notice makes it clear that the expectation is that if they are material they should not be aggregated and the information should be disclosed separately for each one. So, that’s one point to keep in mind. The other area is towards the bottom of the slide and talking about some examples of judgments that need to be disclosed related to consolidation. So, for example, if you concluded that you had control over an investee even though you held less than 50% of the voting rights that would be an accounting judgment that would trigger some disclosure and similarly if you concluded no control and you hold over 50% of the voting rights that would also be another disclosable accounting judgment. So, just keep in mind that you have paid attention to all the accounting judgment disclosure and make sure that the key judgments are being disclosed in the financial statements, that’s basically the nature of the comments in this area that the SEC has observed and then just finally on this slide, the next slide is just a little wrap up of the summary of some other commentary that they have raised. So, first of all, the first line is about presenting additional line items where such presentation is relevant to the user’s understanding. So, the point here is again from IAS 1 and it is fairly judgmental and not really prescriptive at all, but what it is saying is that if you need to provide or you should be providing some additional information in the income statement or elsewhere in the financial statements in order to help with the understanding, if that’s important information, then those line items should be added and so that was the observation on this point. The next one relates to mining and mineral properties and potentially oil and gas as well where the company is following IFRS 6 and has exploration and evaluation expenses or assets and so, the commentary here from the regulators is requesting some clarification for accounting policies regarding the types of expenditures that are included in that E&E category and then finally just some more points on consolidations and around the judgments and in particular whether joint arrangements qualified as joint ventures rather than joint operations. So, if you have those kinds of investments, joint arrangements, you are probably familiar with the judgments that might get made there and if there are such judgments, they should be recorded and disclosed in the financial statements. So, Jon, with that I’ll turn it back over to you. Okay, thanks Kerry. I would now like to introduce our second speaker, Alexia Donoghue. Alexia is a Senior Manager with the National Assurance and Advisory Services of Deloitte Canada. In this role, she is responsible for monitoring quality standards for Deloitte’s public company client filings. Alexia also provides consultative advice to attest and non-attest clients on general securities filings and financial reporting matters. Over to you Alexia. Thank you Jon. We are now going to spend some time looking at some of the trends in the current economy and how this may affect your financial reporting. So, our first topic is foreign currency and though I am going to discuss the next couple of slides in the context of the Canadian dollar, the comments are applicable to a number of other currencies as well. So, over the last year or the last 12 months, the Canadian dollars declined significantly with an average conversion of 0.797 USD compared to 0.914 USD for the 12 months ended November 2014. This volatility is expected to yield significant foreign exchange movements through the statement of income and/or the statement of other comprehensive income or loss depending on the currencies in which companies operate. It’s not all bad news with regards to the depreciation of the Canadian dollar. For example, there may be some entities with US dollar local currency transactions where when they are converting to Canadian dollars will see an uptick in the carrying value of their net assets. Given the movement in the Canadian dollar and the volatility, it is expected that entities will update their IFRS 7 financial instruments disclosures to address new and/or increased risk associated with foreign currencies and the impact that it has on their financial results. It is also expected that entities will be revising their MD&A disclosure and based on the review of some recent MD&A disclosures, in my opinion some of the most effective communication of the impact of foreign currency changes has been disclosures that have isolated the foreign exchange component when discussing period over period results. In addition, we would just like to remind listeners that functional currency is the currency of the primary economic environment in which an entity operates and it is determined in the context of the primary and secondary indicators that are set out in IAS 21 and is done on an entity by entity basis. So, to the extent that you are a company that may have seen a reduction in their buying power and therefore has made both a strategic and long-term permanent move to a new economy, you need to assess whether this could potentially be triggering a reassessment of functional currency for that entity that you moved over. Next, we are going to look at the presentation implications of the depreciation in the Canadian dollar. So, IAS 21, the effects of changes in foreign exchange rates requires an entity to disclose the amount of exchange differences recognized in profit or loss except for those arising on financial instruments measured at fair value through profit and loss. IAS 21 is, however, silent with regards to the appropriate classification of where those foreign exchange gains and losses should go. The general consensus seems to be that foreign exchange gains and losses should be classified based on the nature of the transactions or events that actually gave rise to those gains and losses. For example, it may be appropriate to record foreign currency gains and losses on operational items, such as trade receivables and payables within income from operations and foreign exchange gains and losses on issue debt as part of finance costs. Ultimately, the classification of your foreign exchange gains and losses and profit and loss is a matter of accounting policy and it must be disclosed as part of your accounting policies and applied consistently year over year. In addition, when the impact of foreign exchange gains and losses is material as dictated by IAS 1, the nature and the amount of gains and losses should be disclosed separately either in the statement of income or loss and/or other comprehensive income or loss or in the notes. Therefore, when you have got an entity that previously classified their foreign exchange gains and losses on operating items, let’s say within selling and administrative expenses and the impact of these gains and losses becomes material in the year, the entity may elect to present those foreign exchange gains and losses as a separate line item within income from operations. So, as Kerry discussed as part of their operating activities, but not necessarily within the selling and administrative expense line item. The only consideration there is that a change in presentation for those gains and losses may actually trigger IAS 1 and IAS 8 disclosures in the current year if the change in presentation also represents a change in accounting policy and with that let’s think about some impairment implications. When a local currency declines relative to an entity’s functional currency, there is a higher likelihood that the impairment assessment will indicate that an impairment charge should be recorded. However, a decline in the local currency alone does not indicate that an asset is impaired. Analysis should be performed to determine whether or not an impairment charge should be recorded. So, when we are determining the recoverable amount for impairment purposes and we are looking at future cash flows that are going to be applied, the future cash flows should be estimated in a currency in which they are going to be generated. So, if your revenue is being generated in USD regardless of what your functional or your presentation currency would be, you would record all those cash flows in USD and then you would discount using a discount rate that is appropriate for that currency. Basically, what the guidance is saying is that you translate the present value of those cash flows using the spot exchange rate at the date of the calculation because the spot rate reflects the market’s best estimate of future events that will affect that currency. So, let’s put this all into context. We have got an example here on the page and let’s say that we have got a subsidiary A and it’s got an indicator of impairment for the year ended 2015. The subsidiary A operates in Brazil, but it has a USD functional currency and let’s also assume that subsidiary A represents a CGU for impairment purposes. So, in determining the recoverable amount of subsidiary A given the indicator of impairment, we would calculate all of the future cash flows and then we would forecast them in Real and then we would discount it back at a rate that reflects the risk associated with the Brazilian Real. Once we have got this present value in the local Brazilian currency, we are going to convert the present value into US dollars, which is our functional currency at the spot rate at the date of the test. The resulting US dollar denominated value in use calculation or recoverable amount is then compared to the US dollar carrying amount to determine whether or not there is an impairment, but what happens if on top of this subsidiary there is a parent and that parent is using a Canadian presentation currency. Do we have another requirement to test for impairment and in Canadian dollars? The answer is no. The net assets of subsidiary A would be translated from USD into the Canadian presentation currency at the foreign exchange rate as at the date of the statement of financial position and then the impairment that is included in the subsidiary level would also be translated into Canadian dollars using the average rate and that would be reported in the Canadian financials in the P&L. So, basically any translation amount that we have incurred by going from the USD functional into the Canadian reporting amount would just be reflected through OCI or P&L respectively without the need to do a reassessment. So, we are going to talk a little bit more about impairments now that sort of leads us into the when, what and how for financial assets and this is a little bit of a review in terms of what we have previously presented, but just some key reminders again going back to the CSA report and also just some general feedback that we have received in terms of regulators comment letters. So, when to test? When there is an indicator of impairment regardless of an indicator being present at a minimum for goodwill, intangible assets with an indefinite life and intangible assets that are not available for use, there is a need for an annual impairment test and then in certain circumstances as dictated by the IFRS. The most commonly identified would be classification into held for sale. Management should be performing their test at the lowest level first based on where the indicator is present. So, I think most frequently you would have an indicator at the CGU level, so you would test at that CGU level before testing at a larger CGU group level. So, it would be basically assuming your CGU is, I am going to say like a manufacturing plant and if there were indicators with regards to the economic environment you would first test the manufacturing plant and then you would look at the larger group. Let’s say there were some intangible assets associated with sort of the goods that you are producing within that process, you would include that as part of the CGU and sort of move up until you have tested everything and in terms of what you are actually testing or what you are comparing, you are looking at the carrying values and then comparing that to directly attributable assets and assets that are allocated on a reasonable and consistent basis less liabilities used to determine the recoverable amount. So, really it’s the carrying value versus your recoverable amount and that can be done using either the value in use or the fair value less cost of sale method. So, let’s look at some indicators for impairments and so here listed on our slide we have both got external and internal indicators. We have talked about some significant changes in the economic environment as it relates to currency on the previous slides, but we can also talk about it in the context of commodity prices. So, as many of us know the price of oil has dropped from $100 a barrel to almost $40 a barrel, palladium prices, which is used in catalytic converters and a number of different other industries has dropped from $786 to $552 and also is included on the graph on the right hand side. There has been a lot of volatility in the price of gold over the last year. So, volatile commodity prices have a direct impact on industries producing those commodities, but they also have a significant impact on the range of entities that are dependent on those commodities as a key input for their cost structure. So, basically given the significant fluctuations in the commodity prices, we would also expect that there would be a number of indicators of impairment and that they would be prevalent in terms of people therefore assessing whether or not they need to record an impairment in their financial statements. So, if we go back again to the two graphs we presented on the slide, just the volatility, if we think about that volatility, where and how does it impact some of the calculations from a financial reporting perspective. Those are key inputs that would impact the impairment testing under IAS 38 in terms of determining the recoverable amount to the extent that we were talking about inputs in determining the net realizable amount of inventories under IAS 2, but we also need to think about key inputs related to currency and commodity prices in determining fair value measurements of assets that are acquired in the business combination and also when thinking about the useful life of property, plant and equipment and intangible assets. So, indicators of impairment absolutely, but also have a trickle-down effect in terms of the measurement of some of the key assets found on one’s balance sheet and then the next sort of indicator we are going to talk about is when your net carrying amount. Sorry, if we could just go back to the other side, we are just going to look at some other ones. The net carrying amount when it is in excess of the market capitalization and this is something we talked about in some previous webcast and really what it is, is with the existence of this indicator you don’t necessarily have an impairment. So, there are certainly some questions you need to ask, but it is one of the specific indicators set out in the guidance. From an internal perspective, it’s usually more obvious in terms of what may be some indicators of impairment. So, obsolescence or physical damage to an asset, if you have a fire in a portion of your warehouse, that’s certainly an indicator of potential impairment and then also I would say a shift in consumer consumption with regards to the use of an asset. So, that second point often cannot be predicted and can certainly result in a downturn in terms of results and with that we’ll move over to the assets held for sale. So, I think this is a topic that I’m going to say people kind of struggle with. So, we just thought we’ll cover it here leading into year-end again as we tie it back to some significant fluctuations that have occurred in our economic environment. So, an available-for-sale equity investment is impaired when two criteria are met. The first is that its fair value has declined to below cost and the second is that there is objective evidence of impairment. So, what would be objective evidence of impairment and really what the guidance says is that it most likely would involve a series of loss events that points to the fact that the cost will not be recovered. So, examples that they use would be a significant financial difficulty had by the entity itself or increasing probability of bankruptcy over a period of time tying it back to some of the indicators we saw on the previous slide, significant changes with an adverse effect in the local environment in which the issuer operates may also indicate that the cost may not be recovered and what we are going to actually, the final sort of indicator, if you will and what we’ll talk about in a little more detail is whether or not there is a significant or prolonged decline in the fair value of an investment in an equity instrument below its cost. So, the first thing that we are just going to think about when we are looking at this criteria is the fact that the assessment should always be done relative to the original cost on the date of initial recognition. So, this is actually a point that was considered by IFRIC a number of years ago, because I think what people were struggling with is what the point of comparison was as they were doing this assessment of significant and prolonged decline. The IFRIC also went onto clarify that what constitutes a significant or prolonged decline in fair value is actually a matter of judgment and that an entity could develop some internal guidance to assist with the consistent application of this judgment, but there may be facts and circumstances that would override the policy. So, if we just want to walkthrough a quick example, let’s say an entity has defined their policy such that significant is determined to be a 15%-20% decrease in the fair value and prolonged is deemed to be a period greater than nine months. If we look at the diagram on the screen, so the initial cost is that dashed line that runs through the middle and then the solid line would be the fair value of the equity instruments over the passage of time, you can see at Q1, probably there is no impairment whereby the fair value equals initial cost, at Q2 we have had an increase in the fair value and then at Q3 we can see that there has been a decline in the fair value of our equity instrument. So, our first assessment would be to look back at our internal policy and compare the price as at the reporting date to our initial cost and determine whether or not of significant. You know in determining their internal policy, the entity may have considered that a volatility of 5%-10% is normal for the industry in which this equity exists, but, if it is in excess of that volatility it’s definitely an indicator of impairment, then an impairment would be recorded and then the other thing is to look at time. So, if we look at sort of it’s been nine months since the initial recognition of our equity investment, but it’s only, so determining whether or not that also is a reason to record an impairment. Okay, so next thing we are going to talk about is discount rates. So, the Bank of Canada has not done much in terms of our interest rate or risk free interest rate and so our question to you is which of the following standards requires the use of a discount rate and if you have answered all of those shown on the slide then you are correct. So, this is just really a friendly reminder to let you know that there are a number of standards that require the calculation in the application of discount rates at each reporting period and that just that these amounts need to be revisited. I’ll just touch on some of them quickly. So, as I mentioned the Bank of Canada, the risk free interest rate is sitting at about three quarters of a percent right now, which is down from 1% as of July or I guess June of this year, that is often the starting point for IAS 37 provisions to the extent that entities actually put the risk associated with future cash flows into the cash flows themselves. So, it’s just really that we need to be consciously assessing whether or not the appropriate risk has been embedded into the inputs and the cash flows and also that when we are looking at the different discount rates that we are ensuring compliance with respective IFRSs and then just moving onto and I guess Kerry touched on this briefly before, we are going to talk about some fair value considerations. So, basically fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal or in the case of IFRS 13 the most advantageous market at the measurement date under current market conditions. So, really quite a mouthful, but really I think what reporters need to think about or people who are preparing their financial statements is whether or not they have really assessed the completeness of their fair value disclosures and also the completeness of their calculations. So, looking at a number of financial statements, there seem to be some deficiencies, one in terms of whether or not all items that have affected both recurring and non-recurring are reflected in the financial statements. It’s not often clear whether or not there have been adjustments to valuation models. So, just an example there would be if you had debt that was previously issued and you were using one valuation model and then you issued some more debt, but that had different constraints associated with it just whether or not you have modified the valuation methodology in order to reflect the individuality of that second debt tranche that was issued. Also a reminder that the fair value hierarchy applies to both financial and nonfinancial assets and liabilities and often the disclosure included in the financial statements focuses just on financial instruments. So, we just need to ensure completeness and then also just ensuring as I was referring to in the discount rate portion is that any non-performance risk or other risks associated with the fair value of assets and liabilities that is actually flowing through the methodology. So, the next slide we are just going to look at some of the required disclosures in the context of fair value measurements and really this is all in the context or set out in IFRS 13, which basically is asking for entities to disclose information that will help users understand both assets and liabilities that are measured at fair value on a recurring and non-recurring basis after initial recognition. So, just sort of take a step back, if we could just think about or revisit what is meant by recurring and non-recurring. Examples of recurring fair value measurements would include investment properties that use the fair value model under IFRS 40 or financial assets at fair value through profit and loss under IAS 39 and IFRS 9. Really what it is, is assets and liabilities that need to be fair valued at each reporting period as set out under IFRS and then by comparison non-recurring fair value measurements include assets held for sale, which are measured at the lower of fair value less cost to sell and their carrying amount and again comparatively non-recurring fair value measurements are those that are required or permitted by IFRS, but only in particular circumstances. So this slide just shows what the required disclosures are for Level 2 and Level 3 items and if we are going to tie this back to sort of the feedback that we have been receiving via comment letters and from regulators, the first one would be with regards to the description of the valuation techniques, often these descriptions are fairly boilerplate and to be honest they really just reproduce the definitions of both Level 2 and Level 3 as set out in IFRS 13. So, really just you know entities should be revisiting their disclosures and ensuring that they have made them as asset or liability specific as possible in order for readers to understand what is going into these different underlying measurements. Given and as Kerry mentioned sort of the number of variables and potential risk associated with Level 3 measurements, I just want to draw your attention that there are a number of additional disclosures that are required including a reconciliation from the opening to the closing balances in order to, for users to understand those changes and also with regards to quantitative information about the significant inputs that are going into the fair value measurements. So, really just a reminder that we need to ensure that the disclosures one are complete and two that they are in sufficient detail and specificity that readers can understand what they are trying to say and just before I turn it back to Jon, I wanted to talk about one more economic consideration and that’s the Canadian political environment. As some of you might know, included in the proposed 2015 Federal budget was the rule to make inter-corporate dividends declared after April 1, 2015 taxable. This is just a reminder that the proposed rule was expected to be reintroduced when the Trudeau government brings up the next budget. So, although not an issue for the current year-end, you may want to consider speaking to your tax advisor in order to start planning for potential implications and potential tax strategies in the event that this rule is in fact passed and could potentially have an impact on your financial results and with that I would like to turn it back over to Jon. Thanks very much Alexia. Lots of challenging issues especially around impairment and fair value measurement. I would now like to turn the presentation back over to Kerry. Thanks Jon. So, I guess another piece of good news about not having too many amendments for year-end to talk about is that it does leave us a little bit of time to look ahead to what might be coming along in the near future and I am going to just touch on, this is basically an abridged version of the current IASB work plan. You can see this work plan at any given time by following the link that’s on the bottom of the screen. They do update it from time to time and this one is as of October 30, the last version. So, as many of you will know, we are expecting the Leases project to result in a final standard within the next three months and I guess the much awaited implementation date has pretty much been decided to be January 1st, effective for period starting on or after January 1, 2019. So, I guess the good news is we don’t have to adopt the Leases standard in the same year that we have to adopt revenue and the new financial instrument standards in IFRS 9, but soon after that in 2019, I have to be looking towards Leases. So, I will say a little bit about some of the stuff that they have released some information about the Leases project. So, I’ll talk about that shortly, but in the meantime, maybe I’ll just mention a couple of other things that they are working on. So, you will see a number of entries on this work plan related to the Disclosure Initiative. So, the first one being we are expecting some final amendments. So, this is going to be a final IFRS to IAS 7, which is the cash flow statement standard and what those amendments are focusing on is getting entities to provide information about liquidity and one of the things proposed in there, which we expect to see in the final standard is actually some disclosure around reconciling, opening to closing balance related to liabilities and in particular debt type financing obligations and basically showing in the financial statement notes, the movements of those in the period. So, that’s something that you might want to watch for. It will be out probably early next year. So, we don’t really know what the implementation day will be. Certainly, probably safe to say it won’t be a 2016 implementation day, but may be some point soon after that. So, a couple of other things to mention IFRS 8, we are expecting in next few months, an exposure draft, some clarifications around segment disclosures and these come from the so called post-implementation review that the IASB does. So, when they do a new standard and IFRS 8 is a relatively new standard, a couple of years after the effective date, they will do what they call post-implementation review and they are looking for implementation issues and areas where clarification is needed. So, they have found that there are some areas related to IFRS 8 that they would like to propose some clarifications and so we can watch for an exposure draft on that coming shortly. The next one, I guess another definition of a business in the middle column, that’s another one out of the post-implementation review this time of IFRS 3, the business combination standard. So, this is an important issue and it’s one that we often think about in acquisitions of assets especially in the natural resources and sometimes in the real estate sectors whether the collection of assets that you are buying meets the definition of a business, in which case it’s covered by IFRS 3 in the business combination standard or is it just merely an acquisition of assets and then the question is how do we account for them and there are some differences. You know you wouldn’t have goodwill in an asset acquisition, transaction costs would get expensed in a business combination, they get added to the cost of assets in an acquisition that’s not a business acquisition. So, there are some differences in accounting, which does make the distinction important. Again we have got Disclosure Initiative again mentioned here and the discussion paper and as well over on the right-hand side, there are some more entries there for an exposure draft around changes in accounting policies and estimates out of the Disclosure Initiative and so there that one is getting at the distinction between a change in policy versus a change in estimate and then finally at the bottom, there is a Materiality Practice Statement, that they have issued a paper on that and they are considering comments. So, I guess the one thing also to mention about the Disclosure Initiative project which is not on this work plan and that’s because part of it is already finished, they have made some amendments to IAS 1 around some concepts associated with materiality, the extent to which financial statement line item should be aggregated and whether individual line items need to be presented only based on materiality or do they need to be presented simply because they appear in a list of minimum line items in IAS 1 and so the good news there is they have gone more towards saying only present things if they are material and so that’s good. I think the whole objective behind the Disclosure Initiative project is to perhaps get some streamlining of disclosure happening and just to make sure that really the most important things are being disclosed in a clear way and in a way so that the information is not obscured by having a lot of details present in the notes. So, I think that’s probably good news story anyway. So, that piece of the Disclosure Initiative that’s finished, those amendments to IAS 1, they are effective for January 1, 2016. So, will they cause a lot of changes for next year’s financial statements, maybe not, but they will give some extra food for thought for people in thinking about how and whether to streamline their disclosures and certainly a lot of encouragement there to try and make the disclosures more clear and concise. I guess may be one last thing to mention the Conceptual Framework, which is in the middle column there. They have been working on the Conceptual Framework update, so that is basically the part of IFRS that sets out things like definitions of an asset and liabilities, the elements of financial statements and so on. So, that project they had a discussion paper. They are considering the comments on the discussion paper. So, we will see probably some activity, more proposals perhaps being presented next year. So, the comment period on the current exposure draft that’s out related to that project is actually ending this week, November 25th. So, I mentioned I was going to talk a little bit about some work that they have or some of the stuff that they have released related to the Leases project and so that’s on the next slide and really what they have done here is, you know as I said we are expecting the final standard, but what the IASB has done and they have actually put it out twice now, they did a version in February and then they updated it in October. A lot of discussion and examples surrounding definition of Lease and remember if you have been following this project you know that the whole objective of the project is to get all those leases, for lessees to have their leases for the most part on the balance sheet with a right of use asset and an obligation and so, really distinguishing leases from other kinds of contracts is becoming even more important than it ever was because you could have a big difference. If you got a lease, then you will have the right of use asset and an obligation. Whereas if you don’t, you won’t have those things. So, they have put out this information statement about some of the guidance that they expect to see in the final standard around what actually is the definition of a lease. So, we can see on the slide it has a few elements. So, first of all it depends on the use of an identified asset. So, this is a uniquely identified asset, there should be no real substitution rights and then it’s for a physically distinct portion of the asset. So, either the asset completely in it of itself that’s what is leased or maybe something that can be distinguished like floors in a building. So, those things would meet the definition potentially of a lease, whereas something like you know capacity in a fiber optics cable would not because others will also be using the same cable and you have just really contracted for some capacity in the cable. So, the other element is that the contract conveys the right to control the use of the asset for a period of time. So, the lessee has the ability to direct the use of the asset and make decisions about it and to receive benefits from its use. So, there could be some critical judgments in here, whether the customer controls the use of the asset over the period of use. So, let’s just look at an example on the next slide and really this is just one of a number of examples that they have included in this little release that they have done, most recently in October. So, in this case, we have got a contract between a customer and a freight carrier, the supplier, to provide use of 10 rail cars of a particular type for five years. The customer determines when, where and which goods to be transported within certain limitations. If a particular car needs to be serviced or repaired, the supplier is required to provide a substitute, but that would be the only case during which they would be able to substitute other cars and then otherwise the supplier as long as the customer is continuing to pay the lease payments or make the payments, the supplier cannot retrieve the cars during the five-year period. Now, it’s also a feature of the contract that the supplier might provide an engine and a driver when requested by the customer as well, so that we can make the cars move from point A to point B. So, is there an identified asset? Yes, it’s the 10 cars. They are explicitly indicated or specified and we can’t do substitution unless there is service needed. The engine and the driver is not an identified asset because it’s neither explicitly specified nor implicitly specified in the contract. So, that’s not part of the lease even though it would be a service that would be provided surrounding the lease. So, if we move onto the next slide, we can see the considerations here and so the question really is does this represent a lease or does the contract contain a lease of the rail cars. So, in this particular case because the customer, they are controlling the right of the use of the asset, the supplier cannot substitute, it’s the customer who decides when and how to use the cars, the driver is a separate service essential to the efficient use of the cars, but the supplier’s decisions related to the engine and the driver do not give it the right to direct how and for what purpose the rail cars are used. So, in this case, yes contains a lease. Now if we change the fact pattern and that’s the interesting thing that they do in this little release they put out as they look at one fact pattern where the thing does constitute a lease and then they alter up the facts a little bit so that you can kind of see the contrast there and so if we changed it so that the supplier for example could retrieve the cars, substitute them, all they really needed to do was kind of provide the capacity of 10 cars, not 10 specific cars, then that one likely would not constitute a lease and it would be a service contract instead. So, just interesting you could find that release on the IASB’s website on the project page for the lease project. So, the next couple of things I am going to talk about are two draft IFRIC interpretations. So, the IFRIC is of course the interpretations committee that deals with relatively narrow focus projects of an interpretive nature related to the IFRS standards. So, the first one potentially an important one, so uncertainty over income tax treatments. So, this is dealing, uncertain tax positions arise when the tax law or the application of the tax law is sometimes unclear in certain cases and so companies will have these uncertain tax positions where they have taken a position it’s not a 100%, that’s the position that would prevail if it was challenged, but nevertheless that’s the position they have taken and so the question there is how do we account for that uncertainty and what do we do about that uncertainty from an accounting perspective. So, of course US GAAP has a standard on this. IFRS never did and so there was, you know existing practice is for people to either look to IAS 12, which is the tax standard to try and figure out how to account for these uncertainties or else look at IAS 37, which is the contingencies and contingent liabilities part of IFRS. So, the exposure draft is kind of trying to answer the question where should we look and so, it is referencing, it is indicating that the reference should be made to the tax standard and so how do we deal with these uncertainties. So, the objective of the standard is for the entity to consider whether it’s probable, what’s the probable outcome on an uncertain tax position and so, it talks about using the most likely amount or an expected value approach and we will look at an example shortly, but, so, really and how do you choose. So, it is driving you to it. It’s not a free choice. It’s suggested in the exposure draft, but you should be selecting the method that best reflects the amounts that you would expect to pay or recover. So, sometimes if there is kind of one really very, the most likely amount and it’s kind of obvious it will be that amount or maybe nothing or there are other amounts that maybe have a much lower probability, may be you will be driven to using the most likely amount versus if there is kind of a range of outcomes then maybe more of an expected value approach would be the way to go. The draft interpretation tells you to assume that a taxation authority will examine the filings and has full knowledge of all the relevant information. So, basically that’s trying to take out sort of the detection risk out of it. So, you know would they even think to ask that question, would they know that you are taking that position, would the question even come up on an audit. It sort of takes that off the table and says like let’s assume that they will examine it and they will do a thorough job and they will be able to see, the tax authorities would be able to see and evaluate these uncertain positions and then it also talks about whether, the proposal talks about whether each uncertain tax position should be considered on its own or together and really the answer there depends on the facts and circumstances and whether the positions would stand independently of each other or not. So, the comments are due on that one in January and again you can find that in the website if you are interested in looking at it and maybe commenting on the draft interpretation. So, if we look at the example and this is an example right from the draft. We have entity B whose tax filing includes a number of deductions related to transfer pricing. It’s not probable that the tax authority will accept all of the tax treatments and decisions on one will affect or be affected by decisions on the other, so they are interrelated potentially. So, entity B concludes that the tax treatments should be considered collectively and the most likely amount was determined to be 800, but having said that if you look in the example you’ll see that there is a fairly wide range of possible outcomes and really 800 is only considered to have a 30% probability. So, while it is the most likely outcome of all of them, it’s not like it is even hitting the probable threshold in and of itself. So, the entity then concludes because of the dispersion of these outcomes that they should use an expected value approach and as a result they record 650 related to this tax position on that basis. The other draft interpretation, which is probably a narrow situation, ask the question about foreign currency transactions involving advance consideration. So, an example would be maybe you are paying upfront to buy an asset and so, if it’s in a foreign currency, at which rate should that be translated to the spot rate? So, if we look on the next slide, there is a little bit of an example. The standard is basically saying to use the earlier of the date the prepayment is recorded and the date the asset is recorded. So, basically you are making a prepayment before the asset is received then that would be what you would pick. So, let’s look at this example. So, we are entering into a non-cancellable contract with a supplier on March 1st, we paid a non-refundable fixed purchase price on April 1st and then we take delivery of the machinery on April 15th. So, in this case using the earlier of proposal set out in the draft interpretation, we translate the prepayment on the date it’s made April 1st and we don’t change it when we get the machinery. So, the machinery basically comes onto the books using that same April 1st exchange rate. So, as I mentioned, that is a January comment deadline as well. So, finally I guess the last thing I am going to talk about that’s out for comment is the agenda consultation. So, every few years, the IASB looks at their current agenda and they seek input from stakeholders as to whether it has the right priorities in the work plan and so on and it really basically goes from the very basic, early stage research projects to maybe some other projects that are more advanced. So, we can see on the next slide the basic categories of the projects that they are considering and the areas of interest that they are looking at. So, there is development stage, assessment stage and then there is the inactive projects. So, what they are basically asking for is for people to comment if they would like to on the relative priorities that should be given to these different projects. So, you can see it’s a fairly lengthy list. Some of these projects are, potentially might have some pervasive impacts, they are very topical, others are more narrow. So, I’ll just leave that for your reference. The agenda consultation paper is available on the IASB’s website and it’s open for comment until December 31st. So, the next slides, which I will leave for your reference relate to some resources that we have noted, Deloitte Center for Financial Reporting and so on and then as I mentioned Appendix A goes through those amendments that are effective for 2015 fiscal year end and then Appendix B gets into some of the amendments or the amendments that are effective starting in January 2016. So, certainly probably a topic of future webcast for us to talk about those 2016 amendments that will affect 2016 year end. So, Jon, I think I will turn it back to you at this point. Okay thanks Kerry. Safe to say that accounting and financial reporting are not static, they are always changing. Thanks again to our speakers, Kerry Danyluk and Alexia Donoghue. I would also like to thank our behind the scenes team, Kiran Kullar, An Lam, Elise Beckles and Allan Kirkpatrick. We hope that you found this webcast helpful and informative. If you have any questions or feedback, please reach out to your Deloitte partner or other Deloitte contact. If you would like additional information, please visit our website at www.deloitte.ca and to all of you viewing our webcast, thank you for joining us. This concludes our webcast bringing clarity to an IFRS world - IFRS quarterly technical update.
B1 中級 米 Q4 2015 IFRS四半期テクニカルアップデート - IFRSの世界に明快さをもたらす (Q4 2015 IFRS quarterly technical update - Bringing clarity to an IFRS world) 22 5 陳虹如 に公開 2021 年 01 月 14 日 シェア シェア 保存 報告 動画の中の単語