Accounting and Capital Markets Round-Up
October 2021
Hi,
Here are your articles on accounting updates for the month.
For further enquiries, please contact us, the Capital Market & Accounting Advisory Services (CMAAS) team at: my_cmaas@pwc.com
IFRS / MFRS Update on topical issues
- Accounting for configuration and customisation costs (“CC”) in a cloud computing arrangement
- Impact of climate change risk on the measurement of IFRS/MFRS 9 expected credit losses;
- Reminders about the main principles of IAS 36 / MFRS 136 impairment loss reversal that might be relevant in post-pandemic economic recovery; and
- Pollutant pricing mechanism. With companies becoming increasingly alert to the financial consequences of climate change and the measures being employed to tackle it, emissions credit schemes have become a key tool for reducing emissions.
IASB seeks stakeholders’ views on IFRS 9 review
The International Accounting Standards Board (“IASB”) is conducting a post-implementation review (“PIR”) of IFRS 9, including the related disclosure requirements in IFRS 7. The purpose of PIR is for the IASB to understand the effects of the application of IFRS 9 requirements on stakeholders and determine the next steps (e.g. providing educational materials or considering possible standard-setting).
In this Request for Information, the IASB decided it would begin by examining only the classification, measurement and the related disclosure requirements of financial instruments. The PIR for the impairment and hedge accounting requirements will be conducted when more information is available about the effects of the application of those sections.
The PIR asked whether the IFRS 9 requirements in the following areas are working as the IASB intended:
- Classification and measurement in general
- Business model for managing financial assets - focus on reclassification of financial assets
- Contractual cash flow characteristics - focus on financial assets with sustainability-linked features
- Equity instruments and other comprehensive income - focus on recycling of gains and losses
- Financial liabilities and own credit
- Modification to contractual cash flows
- Amortised cost and effective interest method - focus on interest rates subject to conditions and estimating future cash flows
- Transition
Where to start on climate change?
Are you interested to find out the IFRS / MFRS financial reporting impacts of climate risk? Do you know that the Task Force on Climate-related Financial Disclosures (“TCFD”) has just released its latest status report describing progression climate-related disclosure and TCFD implementation efforts, insights and challenges? Have you heard about the GRI Standards used for sustainability reporting issued by the Global Reporting Initiative (“GRI”)?
Visit the dedicated page for climate change in our PwC Global Viewpoint to listen to webcasts and explore links to various useful websites related to climate risk.
The Capital Markets & Accounting Advisory Services (CMAAS) team provides solutions on accounting, financial reporting and capital market matters. Talk to us
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