IFRS Update – Significant news from 2012
As IFRS (International Financial Reporting Standards) are evolving fast, we are continuing our focus on the latest IASB’s (International Accounting Standards Board) updates. The following synthesis aims to help SAP Customers and Partners anticipate the potential impact of short-term IFRS evolution both on their business processes and SAP® solutions for consolidation.
Few Final Standards Have Been Issued In 2012:
- Government Loans – Amendments to IFRS1 (13 March 2012)
- Annual Improvements 2009-2011 cycle (17 May 2012)
- Transition Guidance to IFRS10 , IFRS 11 and IFRS 12 (28 June 2012)
- Investment Entities – Amendments to IFRS10, IFRS 11 and IFRS 12 (31 October 2012)
Moving forward in 2013 SAP plans to release analysis papers and how-to guides to help companies deal with these final standards with their enterprise performance management (EPM) systems for financial consolidation. In addition, new support packages are planned to be released in the course of this year to include IFRS consolidation-related changes in our EPM products SAP® Financial Consolidation and SAP® Business Planning and Consolidation.
Some noteworthy exposure-drafts have been published lately in 2012, especially those that proposed limited amendments to IAS 28 and IFRS 11, but the major projects such as leases or revenue are still in progress.
2012, A Milestone in US-IASB Relations
On 13 July 2012 the U.S. SEC (Securities and Exchange Commission) Staff published its long-expected report, which analyzes the issues related to the possible incorporation of IFRS into the financial reporting system for U.S. issuers. This work had been requested by the SEC commissioners and should have enabled them to take the final decision about IFRS adoption. Actually, the SEC staff neither expressed an opinion nor proposed next steps for a possible one.
The SEC Staff report was quite naturally received with disappointment by the IFRS Foundation. In October 2012, the IFRS Foundation Staff published an 84-page response to the SEC’s report in which all issue identified by the SEC are being discussed one by one.
More recently, the IFRS Foundation proposed to establish an Accounting Standards Advisory Forum (ASAF) that would formalize the relationship between national standard-setters and the IASB. This can be read as a way to limit, to some extent, the US influence on the IASB agenda.
IASB Work Plan
As regards the IASB’s work plan, short-term objectives remain unchanged as three major projects still need to be finalized in the next quarters: financial instruments, leases and revenue.
Besides, the IASB rounded off in December 2012 its far-reaching public consultation on its future agenda. A statement of priorities for the coming three years highlights the following topics:
- Greater attention on implementation and maintenance of existing standards
- Comprehensive revision of the Conceptual Framework
- A small number of major IFRS projects (as many respondents call for a period of calm)
For more information, please read the comprehensive presentation on IFRS 2012 significant news.