IASB published the November issue of its Investor Update, which is intended to make it easy for investors to keep up to speed on changes in the International Financial Reporting Standards (IFRSs) and how those changes may affect investors. This issue discusses, among other topics, the new disclosure requirements for financial instruments with characteristics of equity and highlights certain benefits and new disclosures observed from entities applying IFRS 9.
In the article on financial instruments with characteristics of equity, the Investor Update highlights essential aspects of this new classification, along with the presentation and disclosure requirements for financial instruments issued by companies, as proposed in the recently published Discussion Paper. IASB expects that investors will find the results of the proposals useful when analyzing companies that issue financial instruments that have characteristics of both liabilities and equity. IASB published the above-mentioned discussion paper in June 2018, The paper sets out the Board's "preferred approach" to improve the information that companies provide in their financial statements about financial instruments they have issued. The paper is open for comments until January 07, 2019 and the Board is seeking feedback on the accounting for financial instruments with characteristics of equity. The Board’s preferred approach seeks to:
- Provide classification principles with a clear rationale for why an instrument is classified as either a liability or equity without fundamentally changing the existing classification outcomes of IAS 32
- Enhance the information provided through presentation and disclosure so that investors can get richer and more comparable information about financial liabilities and equity instruments issued by companies
This Investor Update also contains an article that reports on the implementation of IFRS 15 and IFRS 9. The IFRS 9 article highlights the most common disclosures provided by corporates and banks from the first-time adoption of these new standards. The Update also mentions that Hans Hoogervorst, the IASB Chair, spoke at an event hosted by the Accounting Standards Board of Japan about adoption of IFRS Standards worldwide and the Board's work on Goodwill and Better Communication. Other updates cover composition of the Management Commentary Consultative Group, developments at the first meeting of the group, and certain management changes.
Keywords: International, Accounting, Banking, IFRS 9, Investor Update, Financial Instruments, IASB
Scott is a Director in the Regulatory and Accounting Solutions team responsible for providing accounting expertise across solutions, products, and services offered by Moody’s Analytics in the US. He has over 15 years of experience leading auditing, consulting and accounting policy initiatives for financial institutions.
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