Upcoming Canadian IFRS Survey: Stay Tuned

International Financial Reporting Standards (IFRS) are changing at a rapid pace and companies can expect to see new standards effective as soon as 2014. The International Accounting Standards Board (IASB) intends to improve financial reporting information for investors while also aligning US and international accounting standards. Are you aware of the proposed changes? How ready are you for these changes? PricewaterhouseCoopers (PwC) will soon be conducting an open survey on some key expected changes to IFRS and what Canadian companies think the potential impact may be. The survey will be sent to all IFRS News subscribers and will be accessible from the PwC website.

Professor Mervyn King explains Integrated Reporting

South Africa is the first country to issue specific guidelines defining the content of an integrated report for listed companies. Integrated Reporting is now a stock exchange listing requirement for South African companies and will replace the old form of annual report which focused primarily on financial information and the short-term horizon. In a series of YouTube videos uploaded by the South African Institute of Chartered Accountants (SAICA), Professor Mervyn King explains Integrated Reporting, at the launch of South Africa's new Framework for Integrated Reporting and the Integrated Report Discussion Paper. The SAICA is the foremost accountancy body in South Africa and one of the leading Institutes in the world. It serves the interests not only of the Chartered Accountancy profession, but also of society in general through its key objective of upholding professional standards and integrity.

Global Reporting Initiative - G3.1 Sustainability Reporting Guidelines

The Global Reporting Initiative (GRI) has released guidelines that it describes as the most comprehensive sustainability reporting guidance now available. The G3.1 Sustainability Reporting Guidelines feature expanded guidance on issues including local community impacts, human rights and gender, as well as environmental, product responsibility, labor, governance and other existing GRI categories. GRI is also launching guidance to help companies determine what to measure and report on. The organization says that this publication, Technical Protocol – Apply the Report Content Principles, will allow companies to produce relevant reports more easily.

Estimating the Fair Value of Investments

In September 2006, the US Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) 157, Fair Value Measurements (now Accounting Standards Codification [ASC] section 820-10, Fair Value Measurements and Disclosures), with the stated objective of simplifying the measurement and disclosure of fair value information. The application of this guidance to investments in certain nonpublic entities, such as alternative investments, proved more difficult than originally envisioned. Read the CPA Journal article "Estimating the Fair Value of Investments in Entities that Calculate Net Value Per Share" in digital format.

Preparing for the Unexpected

Operational risk is an evolving discipline in which many global banks are either currently improving their scenario analysis processes or actively thinking about doing so. This executive summary is the outcome of a study by KPMG in conjunction with the ORX Association, the leading global operational risk data exchange and association in the industry. Visit the KPMG website and read the full report on Preparing for the Unexpected. Also, view KPMG's Financial Services Risk and Regulatory Centers of Excellence video.

AICPA/CICA Privacy Maturity Model

The AICPA/CICA Privacy Maturity Model (PMM) is based on Generally Accepted Privacy Principles (GAPP) and the Capability Maturity Model which has been in use for almost 20 years. In developing the PMM, it was recognized that each organization’s personal information privacy practices may be at various levels, whether due to legislative requirements, corporate policies or the status of the organization’s privacy initiatives. It was also recognized that, based on an organization’s approach to risk, not all privacy initiatives would need to reach the highest level on the maturity model. Each of the 73 GAPP criteria is broken down according to the five maturity levels. This allows entities to obtain a picture of their privacy program or initiatives both in terms of their status and, through successive reviews, their progress. (For more information, visit the CICA Privacy Resource Centre online.)

Setting the standard - What you need to know about the FASB and IASB's joint projects

The March 2011 edition of the PricewaterhouseCoopers (PwC) publication, Setting the Standard, is designed to keep readers informed about the most recent developments on the joint standard-setting activities of the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB). In the December 2010 edition, PwC reported that the boards had recalibrated their work plan to focus on the priority projects. The boards continue their sprint toward the targeted June 30, 2011 “finish line,” carefully navigating the hurdles along the way.

Whom Do Public Companies Now Serve?

Integrated reporting is becoming a reality in the United States.  Southwest Airlines issued its first integrated report in 2009, combining financial and non-financial performance assessments, including information on corporate responsibility goals. By instituting this new form of annual report, which it calls “One Report” or “Performance, People, Planet,” Southwest Airlines has placed these broader goals on the same path as corporate performance. The company has codified its accountability to multiple constituencies.  (See “Whom Do Public Companies Now Serve?” at Forbes online.)

Smarter Evidence and Discovery Management

"There is no question that the influence and role of eDiscovery in litigation in Canada continues to develop. While eDiscovery has been a fixture in the US for many years, there has been a slower, pragmatic and perhaps sensible approach to the disclosure of electronic documents in this country. However, as documents are now overwhelmingly formed and maintained primarily in electronic form, it is acknowledged that eDiscovery has arrived in Canada and is here to stay." Visit the KPMG website and read the publication Smarter Evidence and Discovery Management.

Effective IFRS communications with stakeholders

Effective communication cannot happen without an understanding of the needs of the audience. In preparing the first IFRS interim reports, adopters should try to look at the information through the same lens as the people who are seeing it for the first time, most of whom are on a steep IFRS learning curve. Will the readers of those reports be able to discern whether changes are a reflection of business performance or the new standards? Helpful resources can be found on the CICA’s IFRS website including: (1) IFRS Financial Statements – Examples: A sampling of interim IFRS financial statements provided by first-time adopters. (2) Meeting Regulatory Requirements: A web page that provides OSC guidance on MD&A disclosure, including a publication called Ontario Securities Commission Issuer Guide: Top 10 Tips for Public Companies Filing Their First IFRS Interim Financial Reports. (3) A Review of 2010 Financial Statement Disclosures and What to Expect in 2011: An audio/slide presentation that discusses how financial analysis will be different in an IFRS world. The CICA is providing free access to this recording. Other useful IFRS audio presentations are available at the CICA Xtensions Learning Centre.

PwC webcasts - US GAAP & IFRS Convergence Series

The next PricewaterhouseCoopers (PwC) webcast in the US GAAP & IFRS Convergence Series is scheduled for Tuesday, March 15, from 1:00pm to 2:30pm (ET). This webcast will begin with a recap of recent developments and close with some recommendations regarding next steps. Speakers on the webcast panel will: provide a brief update on the convergence agenda; summarize results to survey questions; discuss recommended next steps; and answer questions during a Q&A session. Additional US GAAP convergence & IFRS resources are available at PwC online, along with archives for previous webcasts. 

Research on Corporate Disclosures

Why do some companies provide extensive forward-looking disclosures while others remain relatively silent? What prompts some companies to disclose important discretionary information in their letter to shareholders rather than in the management discussion and analysis (MD&A)? Is the extent of disclosure likely to change as companies move to adopt IFRS? Recent developments in academic research help address these and other questions. Literature on voluntary versus mandatory disclosures and a sample of Canadian public companies illustrate the form and content of forward-looking disclosures in Canadian annual reports. Scan the article “Corporate Disclosures” in the March 2010 edition of CAmagazine online and learn more by reading the CICA research study Corporate Reporting to Stakeholders (June 2008).