National Standards Setters Decry European Plan for Local Changes to IFRS
National accounting standards setters, accounting organizations, and professional groups oppose a European Commission proposal to give European authorities more power to change IFRS guidance before it is implemented. One section of the proposal states that “very few” of the world’s major capital markets and large jurisdictions have made IFRS as issued by the IASB mandatory and questions whether the European Union should continue to adopt IFRS as issued by the IASB. “If Europe creates carve-in opportunities, that will create difficulties, principally because it will reduce the comparability and transparency of financial statements,” Peter Sampers, chairman of the Dutch Accounting Standards Board, told Accounting & Compliance Alert.
Revisions to Hedging Guidance to Come in Stages
FASB is considering a series of changes to the amended guidance it published for hedge accounting in August 2017. Since the beginning of the year, the board has been weighing its responses to requests from accounting firms and financial companies to clarify, and in some cases amend, the guidance published in 2017 in Accounting Standards Update (ASU) 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. An upcoming exposure draft is expected to consist primarily of technical corrections, but somewhat more extensive changes may be proposed in 2019. The FASB research staff is studying how portfolios are managed and how derivatives are used to offset their risks, and it is considering amending the guidance to permit more activities to employ the method.
Inspection Pact Reached With Austrian Regulator
On September 13, the PCAOB reached an agreement with the Audit Oversight Body of Austria (AOBA) for joint inspections and information sharing. The agreement establishes a framework for joint inspections in supervising audit firms regulated in both the U.S. and Austria. “We are very pleased to enter into this agreement with the AOBA, which reflects our shared commitment to protecting investors by improving audit quality through international cooperation,” PCAOB Chairman William Duhnke said in a statement. “We now have cooperative agreements with 16 audit regulators in Europe, and negotiations are well advanced with the one remaining European country where inspections currently are required.” The PCAOB lists the nations where its inspectors are allowed on its website. It notes that outside of Europe, there are only two jurisdictions where it is prevented from inspecting audit firms.