The IASB has issued an exposure draft Definition of Material, with comments to be received by January 15, 2018, and (in final form) Practice Statement 2 Making Materiality Judgments. The IASB hopes through the practice statement, as the news release puts it, to encourage “companies to apply judgment instead of using IFRS requirements as a…
The IASB has published for public consultation proposed narrow-scope amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors, open for comment until January 15, 2018. The purpose of the proposed amendments is to help companies distinguish accounting policies from accounting estimates. The accompanying press release says: “The distinction is important because changes in accounting…
I came across an interesting academic study: “The effects of investors’ information processing limitations when incorporating return on assets into their investment decisions.” The authors are Max Hewitt of the University of Arizona; and Jessica Watkins and Teri Lombardi Yohn of Indiana University. As with all such studies, I can’t claim to be capable of…
In a recent post, I noted a couple of examples of how another writer, Jason Voss, focused on certain aspects of financial reporting as an indication of a reporting entity’s culture or character: Knowing that some companies report a bland “net revenues” while others report “customer sales” tells you something about the culture of the…
A European example of faulty reasoning in applying IAS 12 Here’s another of the issues arising from extracts of enforcement decisions issued in the past by the European Securities and Markets Authority (ESMA) (for more background see here); this is from their 19th edition: The issuer specialized in planting cacao trees, operating a cacao plantation…
I came across an interesting blog post by Jason Voss, CFA : The Top Five Accounting Mistakes Analysts Make It’s actually several years old, and presumably written in the context of US GAAP rather than IFRS. Even so, I thought it was a very stimulating reference point, so here are the five mistakes, along with…
A recent article on CCH Daily summarized a report from Moody’s Investor’s Service on “five critical drawbacks in debt reporting, given an environment with low interest rates and volatile currencies.” The underlying report doesn’t appear to be easily accessible anymore, so here’s the summary provided by CCH: “The report says the first concern is that…
If I return so soon to the writings of Al Rosen (after doing so here and here), it’s not because I’m obsessed with him (please let that be true!) but because he’s perhaps the most prominent commentator in Canada on IFRS-related matters, and it all seems to warrant some response from someone (even if I…
The European Securities and Markets Authority (ESMA) has issued a report on Review of Fair Value Measurement on the IFRS financial statements The report “builds on a desktop review of the 2015 financial statements of a sample of 78 issuers from different industries, and on the evidence from enforcement actions taken by European enforcers relating to…
As we’ve discussed many times in the past, the IASB has issued IFRS 15, Revenue from Contracts with Customers, effective for annual reporting periods beginning on or after January 1, 2018. Canada’s IFRS Discussion Group recently considered the following issue relating to the application of IFRS 15: Entity A develops, manufactures and distributes innovative products. Product X…
John Hughes IFRS Blog 