IFRS for SMEs Under Review by IASB

The International Accounting Standards Board (IASB) is undergoing a comprehensive review for the purposes of updating the IFRS for SMEs Standard.  This simplified accounting standard for small and medium entities is used by some jurisdictions as the basis for the requirements of implementing IFRS 9 for Financial Instruments and the expected loss calculations.  Although the standard is intended for "publicly accountable entities", WOCCU has supported its use for credit unions as a means of simplifying the accounting and reporting requirements of IFRS 9 for credit unions.  WOCCU intends to look at ways that the standard and approaches can be aligned with IFRS 9.

A copy of the consultation can be viewed here.

International Accounting Standards Board

WOCCU Urges Clarification by IASB on Treatment of Financial Instruments with Characteristics of Equity

In a recently filed comment letter with the International Accounting Standards Board (IASB) on their Discussion Paper:  Financial Instruments with Characteristics of Equity, WOCCU strongly supported continuing the IASB existing approach to classifying cooperative shares as equity when the cooperative has an unconditional right to refuse redemption of the shares,  yet urged clarification on the IASB’s approach to the treatment of accounting for convertible bonds and similar instruments particularly as they relate to contractual and non-contractual rights of the instrument.

A copy of the comment letter can be viewed here.

International Accounting Standards Board, Comment Letter

WOCCU Actively Monitoring IASB Work Plan

The International Accounting Standards Board (IASB) issued their new work plan at the end of January containing a number of items relevant to credit unions this year.  A thorough summary of the January IASB meeting, containing numerous details can be found here.

Of particular interest to credit unions are the following:

  • IASB will finish the Conceptual Framework in March.  This is the primary accounting standard on defining equity versus liabilities, and could impact the ability of cooperatives to use shares as equity;
  • The IASB will issue a Discussion Paper in the Second Quarter of 2018 called Financial Instruments with Characteristics of Equity, which may also address when credit union shares and cooperative shares qualify as equity on an accounting basis (assuming this is not addressed in the Conceptual Framework); 
  • IASB is planning Discussion Papers or Exposure Drafts (similar to proposed rules) on requirements for primary financial statements—including, according to the IASB meeting summary, requiring companies to disclose their key management performance measures, as well as proposals on management commentary and disclosure requirements; and
  • IASB is also planning to issue a research summary paper on share-based payments, which indicates that they are considering changes to the rules on dividends.  This item may or may not affect credit unions based on the share-based dividends aspect.

WOCCU will closely monitor these items as they evolve throughout the year and will continue to ensure that the credit union/cooperative perspective is considered at each step of the process.

International Accounting Standards Board