IFRS Interpretations Committee to Publish Final Decisions on Three Topics, Propose New One
The IFRS Interpretations Committee will ask the IASB this week whether the board objects to concluding that rule amendments are not needed on four application issues, including a newly submitted one around business combinations. The other three issues relate to accounting for insurance contracts, employee home ownership plans and loans, and guarantees. “All these agenda decisions will be published in October 2023, if at its upcoming meeting, the IASB does not object to their publication,” Interpretations Committee Chair Bruce Mackenzie said on an October 16 board podcast. The Interpretations Committee is a panel that works with the IASB to ensure that IFRS Accounting Standards are consistently applied. The IASB was expected to discuss and affirm the committee’s decisions on October 26, according to its meeting agenda. The new submission surrounds how an entity accounts for payments to the sellers of a business it had acquired if those payments are contingent on the seller’s continued employment during a post-acquisition handover period.
Benefits Outweigh Costs of AICPA Peer Review Program, Survey Finds
Accounting firm peer reviews help identify opportunities to improve engagement quality, according to a survey by the AICPA. While improvements can always be made, a recent survey conducted by the AICPA indicates that the association’s accounting firm peer review program is largely working as intended. The AICPA requires a CPA firm to review the accounting and auditing work of another CPA firm to make sure their quality is up to professional standards. This peer review must be done every three years. There are two types of peer reviews: System Reviews focus on a firm’s system of quality control, and Engagement Reviews focus on work performed on selected engagements. The survey occurred from July to August, and the findings were presented during a meeting of the AICPA’s Auditing Standards Board on October 24/25. While the samples differed, more peer reviewers surveyed last year agreed that the program is beneficial on average. Respondents were asked to quantify how much they agree on a scale from 1 to 7 (with 1 strongly agree, 4 neither agree nor disagree and 7 strongly disagree). The average agreement was 2.17 in this year’s survey. Last year, the average was 1.83.
GASB to Issue Report of Findings on Two Key Pension Accounting Standards
GASB plans to issue a report next year on review findings about two pension standards—broad accounting provisions that created a buzz about a decade ago for overhauling rules that had been in place. The board will issue a report in early 2024 on the results of the Post-Implementation Review (PIR) findings of GASB Statement 67, Financial Reporting for Pension Plans, and 68, Accounting and Financial Reporting for Pensions, according to an Oct. 20 board webcast. The standards were controversial during their development, spurring the board to ultimately create a “pension communication resource group” in 2014 to foster a better understanding of the changes as misconceptions cropped up. PIRs of the standards started in 2017, and a report will go to the board in December and be released early next year, a senior GASB staff member said. A PIR is a process that enables accounting standards setters to determine whether a major new accounting standard worked as expected. PIRs are done in three stages: post-issuance date implementation monitoring; post-effective date evaluation of costs and benefits; and summary of research and reporting.