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December 2019

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IASB News

Development of International Accounting Rules for Cryptoassets Stifled by Lack of Stability, Readiness

IASB has said that because of insufficient use, stability, and regulation of cryptoassets worldwide, the board will not pursue standards-setting work on the topic unless the marketplace changes. IASB Chairman Hans Hoogervorst suggested staff accountants keep an eye on Facebook’s Libra, the “stablecoin” it proposed in June 2019, stating that if it emerged successfully on the global stage the board would need to have a standards-setting answer in place. “If Libra gets off the ground it would be big, most likely, and there’ll have to be—it will be approved by regulators, so it moves out of the more shady areas, and then we would have to have an answer, I think,” Hoogervorst said during November 20 board discussions. “It remains to be seen whether it can get off the ground.” IASB members said the topic should continue to be monitored, and periodically staff should continue to bring updates on the matter. In general, staff research identified more IFRS entities with cryptoassets than when the board discussed it a year ago, but the situation had not changed sufficiently for the board to take on a project, board members said.

IFRS Foundation Names Advisory Council Members for 2020

The IFRS Foundation named six new organizations and reappointed 12 organizations to its IFRS Advisory Council, the panel that advises its trustees and IASB on strategic and technical matters. The IFRS Advisory Council consists of representatives from over 40 groups affected by and interested in international financial reporting, including academics, analysts, auditors, investors, preparers, professional accounting bodies, regulators and standards setters. The council membership is held by the organization concerned, rather than its individual representative. The six new organizations named and their representatives are as follows:

  • Bayer: Martin Schloemer, vice president, head of closing and external reporting; former interpretations committee member
  • Eumedion: Martijn Bos, policy advisor on reporting and audit; member of ESMA’s Corporate Reporting Standing Committee; Dutch Accounting Standards Board and EFRAG User Panel; former co-chair of the Capital Markets Advisory Committee (CMAC); founder of Fin-Es Equity Risk Premiums
  • Japanese Institute of Certified Public Accountants (JICPA): Aiko Sekine, former chairman and president; currently advisor to JICPA
  • Malaysian Accounting Standards Board (MASB): Bee Leng Tan, executive director
  • S&P Global Ratings: Osman Sattar, director (accounting specialist) of EMEA Financial Institutions Group; co-chair of CMAC
  • Xiamen University: Feng Liu, professor and director of the Centre for Accounting Studies.

All appointments take effect January 1, 2020, and are for a three-year period.

FASB News

Companies Asked to Weigh In on Removing Redundancies from GAAP

On November 26, FASB proposed updates to the codification of accounting standards to remove redundant concept statement references in standards and either clarify or simplify paragraphs in dozens of different topics and the master glossary. The proposal is aimed at improving the codification’s cohesiveness and easing perceptions that the changes to the concepts statements may have an effect on existing standards, according to the document. It will not impose undue costs on companies. Among other things, the changes remove the master glossary terms “expected losses” and “expected residual returns,” the definitions of which contain a reference to Concept Statement 7, related to the term “expected cash flows.” This is a separately defined master glossary term, and thus the definitions for “expected losses” and “expected residual returns” are redundant. Commenters have until December 26 to submit feedback.

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