Sustainability-related disclosures – a flawed enterprise?

As we addressed here, the International Sustainability Standards Board has issued its first two exposure drafts, General Sustainability-related Disclosures and Climate-related Disclosures, both open for comment until July 29, 2022. One of the proposals’ key structuring concepts is that of “enterprise value,” as evidenced for instance in the following passages: A reporting entity shall disclose…

ESMA’s 2020 report – pump that action rate!

The European Securities and Markets Authority (ESMA) recently issued a report on its 2020 corporate reporting enforcement and regulatory activities Here’s an extract from the summary: Enforcers undertook 711 examinations (729 in 2020) of financial statements drawn up in accordance with International Financial Reporting Standards (IFRS), constituting an examination rate of 17% of issuers listed…

Goodwill and impairment – still no compelling evidence?

Let’s look in on the IASB’s Goodwill and Impairment project! In September 2021 the IASB decided to prioritize making tentative decisions on a package of disclosure requirements about business combinations, as described in a March 2020 discussion paper, and analyzing specific aspects of the feedback on the subsequent accounting for goodwill. It recently discussed whether it’s feasible…

Elon Musk on ESG, or: spot the phony!

A recent Globe and Mail article reported on Elon Musk’s recent attacks on ESG Here are some extracts from the piece, written by Jeffrey Jones: Elon Musk is no fan of the environmental, social and governance scores used to evaluate companies for inclusion in investment funds. Seeing his company booted from a major ESG index…

Classification of SPAC shares – no answer, little interest

Here’s a recent tentative agenda decision issued for comment by IFRIC: The Committee received a request about applying IAS 32 in relation to the classification of shares issued by a special purpose acquisition company (SPAC) as financial liabilities or equity. A SPAC is a listed entity that is established to acquire a yet to be…

Discount rates – no imminent solutions, no great sweat?

The UK’s Financial Reporting Council has issued Thematic Review: Discount Rates Here’s the summary: Discounted cash flows, and discount rates themselves, are commonly used when applying IFRS. Determining an appropriate discount rate is a complex area of financial reporting, which can also be a source of significant estimation uncertainty. The challenge is partly because the…

It’s the circle of life, with no room for IFRS 9!

Here’s how one website defines “circular debt” in a Pakistani context: Circular debt is a unique but not necessarily unheard of problem. Two entities ultimately owe debt to each other but cannot balance out their debt because it is indirectly owed through additional entities. At least three parties must be involved. In the simplest terms,…

The Onion returns, more honest than ever!

In the past I’ve sometimes referred to Tom Selling’s Accounting Onion blog (here for instance)… It’s been a while though, since the blog hadn’t been updated since June 2018, and I assumed it had gone the way of all other accounting blogs (as far as I’m aware, I’m the global recordholder for consistent longevity –…

Subscription receipts – not quite so simple?

Here’s another fact pattern recently considered by CPA Canada’s IFRS Discussion Group, relating to a form of financing that’s becoming more common in Canada On December 15, 20X2, Company A completed a public offering of 1 million subscription receipts for gross proceeds of CAD$1 million (for simplicity, this example ignores transaction costs). Company A raised…