Insurance Standard May Face Two-Year Delay
The IASB is ready to debate delaying the effective date of its insurance accounting standard when it meets from October 22–28. The international board has faced pressure from insurers about the difficulty and expense of meeting the standard’s 2021 effective date, and it is considering requests to extend the date an extra two years. Insurance companies have also told the IASB that the new standard will be costly to implement; in July, the European Insurance CFO Forum told EFRAG that European insurers estimated that IFRS 17 would cost them €50–€320 million to follow. “The board plans to discuss implementation challenges raised so far, including calls for a deferral of the effective date, at its October meeting,” an IASB spokesperson wrote in an email. “The board will determine at a future date whether any action is warranted.”
Performance Reporting Project Becomes Major Priority
Now that the IASB has moved its broad project to improve how companies communicate their financial performance to its formal standards setting agenda, the board considers the project the centerpiece of its current work. Speaking at the World Standard Setters forum in London on October 2, IASB Executive Technical Director Nili Shah said the board is focusing on several areas related to improving financial reports: the primary financial statements, disclosures, and management commentary. “We’re looking at improving the content and structure of the financial statement, including the addition of more subtotals on the statement of performance, additional line items, additional disaggregation, and the removal of optionality,” Shah said.
Auditing Standards Board to Vote on Proposed Standard to Align Guidance With PCAOB Standards
The AICPA’s Auditing Standards Board (ASB) plans to vote on issuing a final standard to align its guidance with the PCAOB’s standards during a meeting in Cincinnati on October 15–17. If approved for publication, the final standard is expected to be based on Exposure Draft (ED): Proposed Statement on Auditing Standards: Omnibus Statement on Auditing Standards—2018, which the AICPA published in November 2017. The proposed standard was issued to align the ASB’s standards with the guidance the PCAOB issued after the AICPA completed its Clarity Project in 2012. The ASB said it believes its proposed amendments will improve the quality of private company audits.