Implementation Group to Discuss Whether Crypto Rules Needed for Small-to-Midsized Entities
An IASB implementation group that monitors private company reporting rules will discuss on January 21, 2022, whether cryptocurrencies should be included in IFRS for SMEs (Small-to-Midsized Entities), according to meeting papers. The SME Implementation Group (SMEIG) will provide feedback on the prevalence of cryptocurrencies among companies that use IFRS for SMEs and weigh in on whether this round of updates should include cryptoassets. The SMEIG is a global panel established under the IFRS Foundation to support adoption and monitor implementation of the IFRS for SMEs standard—a self-contained package of rules that was developed in 2009 for companies without public accountability that publish general purpose financial statements for external users. More than 80 countries, including the United States, permit the use of IFRS for SMEs. The topic was raised in the IASB’s Request-for-Information (RFI), “Comprehensive Review of the IFRS for SMEs Standard,” which was issued in January 2020 to solicit broad public comment. The discussion comes at a time when the IASB is getting ready to set its five-year technical agenda for 2022 to 2026. The board has signaled it will include cryptocurrencies as part of the mix of priority standards-setting topics.
Update to LIBOR Cessation Rules Coming for Cities, States
A GASB update to the accounting rules that address the dissolution of the London Interbank Offered Rate (LIBOR) will be published in the spring for state and local governments. The updates, proposed last year as part of an omnibus package of accounting changes, is currently scheduled to be considered for approval at the April 2022 board meeting, a GASB spokesperson said on January 13. The proposed update stems from decisions last year by LIBOR’s administrator, the ICE Benchmark Administration (IBA), to extend the publication of the most widely used United States Dollar (USD) LIBOR tenors by 18 months, to June 30, 2023. The proposal would tie accounting workarounds that facilitate the effects of rate reform to LIBOR as opposed to a sunset date. This would enable governments to continue to use hedge accounting for derivatives that reference LIBOR if the rate continues to be measured and reported as of the original deadline. “Instead of keying it to that date as we did in Statement 93 and possibly setting us up to have to come back and do it again, we worded the amended deadline to be keyed to LIBOR as long as it continues to be propagated using the methodology that was in place as of the original deadline,” said Dean Mead, GASB assistant director of research and technical activities.
Plans to Tackle Interim Financial Reporting Cancelled
GASB considered—but ultimately decided against—adding a project on interim financial reporting to its technical agenda this year, according to a January 6 board alert. Interim financial reporting by general purpose governments based on GAAP is relatively infrequent; however, certain business-type activities such as public hospitals often prepare quarterly financial statements. “Based on the pre-agenda research, while the GASB believes that establishing standards for GAAP interim reporting could encourage more governments to prepare such reports, especially as technology makes information more readily available, the GASB understands that preparation of GAAP based interim financial reports is not prevalent in practice today,” a GASB spokesperson said on January 10. A project on interim financial reporting would be a major project because of its significant relationships to all other major guidance, and GASB generally does not believe that the low prevalence indicated by the pre-agenda research supports the addition of a major project to the current technical agenda, the spokesperson said. “The GASB also believes, based on the pre-agenda research, that timeliness of interim financial information could be sacrificed to some degree if GAAP is established for interim financial reporting.” At present, no government-specific guidance is available for GAAP financial reporting for periods less than a full fiscal year, according to a project summary on the issue.