Taxonomy Update for Long-Term Insurance Rules Proposed
FASB staff have proposed an update to the U.S. GAAP Taxonomy with respect to a recently-proposed amendment to long-term insurance accounting rules. The taxonomy is a list of computer-readable tags in Extensible Business Reporting Language (XBRL) that allows companies to label the financial data in financial statements so that they can be filed electronically. The staff are seeking public input on new elements related to Proposed Accounting Standards Update (ASU) 2022-003, “Financial Services—Insurance (Topic 944) Transition for Sold Contracts,” which would amend the transition requirements for ASU 2018-12, Financial Services—Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts (LDTI). The insurance rule amendment was issued by FASB on July 14 to give companies an accounting policy election “to exclude certain contracts or legal entities from applying the transition guidance” when they have been derecognized because of a sale or disposal before ASU 2018-12 takes effect. Comments are due by August 8.
Research Project Added After Review of Financial Instruments Standard
The IASB has added a project to its research agenda on the modification of financial assets and financial liabilities and the application of the effective interest method. The issues, which surfaced from a post-implementation review (PIR) of IFRS 9, Financial Instruments—Classification and Measurement, can only be resolved through standards setting, the board said. “The one point that really struck me in the paper was that there are constituents saying ‘don’t do anything because the audit firms already have good guidance out,’ yet the audit firms are telling us that ‘this is the area where we receive most of the questions so something needs to be done,’” IASB Chair Andreas Barckow said. “I’m a bit worried in stressing too much ‘the standard is working as expected,’ I would almost say it is not working ‘comma’ as expected because we knew that there are issues in IAS 39 already that have just been perpetuated,” he said. “Is the standard completely defunct, no it is not, but there is an explanation why there is diversity in practice as evidenced, and I agree that practice is all over the place and if we want to get more to a consistent place we can only deal with this as part of standard setting.” The objective of a PIR is to assess the effect of new requirements on users of financial statements, preparers, auditors and regulators following the issuance and application of those requirements.
State Grid CFO Appointed to IFRS Interpretations Committee, Four Members Reappointed
The IFRS Foundation announced it has appointed Yanli Liu to the IFRS Interpretations Committee to replace Zheng Yang who left the panel at the end of June due to term limits. Liu is currently executive vice president and chief finance officer of the State Grid International Development Company Ltd, the international arm of State Grid Corporation of China. She has over 20 years of experience as a financial statement preparer at multinational companies and has a deep knowledge of IFRS Accounting Standards and different national standards around the world. Liu also comes with vast experience in cross-border mergers and acquisitions, as well as international capital markets. Separately, Lisa Bomba, Jens Freiberg, Karsten Ganssauge, and Brian O’Donovan were reappointed to the committee, the foundation also announced. All appointments are for a three-year term from July 2022 to June 2025. Reappointed members’ terms end in June 2025.