Beyond the GAAP - March 2014 issue

In our January 2014 issue, we highlighted the ongoing differences of opinion between the IASB and the FASB as they tried to finalise the standard on financial instruments. After years of work on the joint standard, they seem unable to reach a consensus on either phase 1 (classification and measurement) or phase 2 (impairment).

This month, yet another flagship project for IFRS/US GAAP convergence is seeing the prospect of a joint standard slipping away. At their joint meeting in March 2014, the FASB and IASB each opted for a different approach to lease accounting for lessees.
Many observers are hoping that these differences of opinion will lead the IASB to revise its approach, or indeed to abandon this widely unpopular project.

Highlights

IFRS Standards

IFRS IC confirms that accounting treatment of joint arrangements should be based on legal and contractual analysis of the parties’ rights and obligations
Recognition of “other net asset changes” in an associate or joint venture
Bearer plants – amendment finalised
IAS 12: recognition of deferred tax assets for unrealised losses
IASB work plan
Amendment to IAS 1 on rules for current or non-current classification of liabilities
IASB publishes exposure draft of limited amendments to IAS 1