Mergers and acquisitions
The International Accounting Standards Board (IASB) is consulting on proposed new accounting requirements for mergers and acquisitions involving companies within the same group.
Currently IFRS 3, Business Combinations, covers mergers and acquisitions involving third party-owned businesses, not intragroup deals. Some companies therefore provide fair value information about an acquired in-group company, while others supply book value information, which varies in scope and can be insufficient.
Under the proposed requirements, fair value information is provided for deals that affect external shareholders and harmonised book value assessments elsewhere. The IASB has an at-a-glance guide to business combinations under common control here.
Leases
The IASB is proposing to amend how lease liability is measured in sale-and-leaseback transactions. The amendment to IFRS 16, Leases, would guide assessments of lease liability after a deal has been struck, which is currently not covered by the standard.
Taxonomy
The IASB has released a Ukrainian-language version of IFRS Taxonomy Illustrated (a simplified view of the IFRS taxonomy), which requires no knowledge of the XBRL digital business reporting language.
IOSCO
The International Organization of Securities Commissions (IOSCO) is consulting on whether new standards should ensure that better and comprehensible market data is available at a reasonable price on secondary markets, such as stock markets. One aim is to prevent the unfair exclusion of smaller traders. IOSCO has issued a consultation report, focusing on issues such as timely access to market data, fees, the need for data consolidation, and products and services related to accessing market data.
Fraud detection
The International Auditing and Assurance Standards Board (IAASB) has extended a review of whether audit standards need amending to deal more effectively with fraud and going concern. The deadline for comments is now 1 February, pushed back from 12 January.
The IAASB has also staged three virtual roundtables exploring fraud and going concern. They focused on:
- the impact of new technology on committing and detecting fraud
- the difference between public perceptions and auditors’ responsibility for assessing fraud and going concern issues
- checking for fraud and going concern status when auditing comparatively simple corporate structures
All the roundtables are available on demand.
Sustainability
The International Integrated Reporting Council (IIRC) and the Sustainability Accounting Standards Board (SASB) have decided to merge into one group called the Value Reporting Foundation. Its goal will be to provide investors and corporates with a comprehensive corporate reporting framework delivering value assessment and standards that boost sustainability – work already undertaken by the IIRC and SASB. The foundation should be created by mid-2021.
The Global Reporting Initiative (GRI) has quoted KPMG research that found 96% of the G250 (the world’s 250 largest companies) measure sustainability performance and 73% use GRI standards. The KPMG survey also found that 80% of the N100 (the largest 100 businesses in each of 52 countries) assess their sustainability data and 67% use GRI standards.
The GRI has announced progress in its competitive business progress programme, which helps SMEs develop sustainability reporting systems. Operating in Colombia, Ghana, Indonesia, Peru, South Africa and Vietnam, the GRI says that more than 800 Peruvian organisations have now joined GRI workshops and events, while 107 South African SMEs have been trained in GRI standards.
Public sector
A first review of the external oversight system of the International Public Sector Accounting Standards Board (IPSASB) has been positive, according to an IPSASB report. It says consultees welcomed the work of its public interest committee, established in 2015, and that before then poor oversight had been a ‘hindrance to the adoption and implementation’ of IPSAS.
Academic research
Discussions by IASB board members of academic research into accounting issues is the focus of a new programme coordinated with the International Association for Accounting Education & Research (IAAER). Academics from Canada, Sweden, the UK and the US are now discussing their work with IASB leaders and technical staff. Current topics include corporate disclosures on contract revenues, hedging, new non-GAAP standards, and extractive industry accounts.
