AC Insights

 provides audit committee members with a summary of financial reporting developments for public companies using IFRS or US GAAP, how those developments might affect their companies and things they may want to think about when reviewing financial reports. 

After 20 years of thought, research, discussion and consultation, the IASB issued its standard for insurance contracts. This new standard provides consistent models for accounting and reporting insurance contracts in financial statements of companies that issue insurance contracts. In this edition, we provide an overview of these new models.

The Interpretations Committee also issued its interpretation of accounting for income tax uncertainties. This consensus is expected to reduce diversity in dealing with uncertain tax positions.

A new look and expanded content for the auditor’s report will come into effect in 2018. The new Canadian auditor’s report does not mandate reporting of Key Audit Matters. However, the PCAOB report, if approved by the SEC, will require auditors to report Critical Auditing Matters. In this edition we explain the changes that have been adopted for both the Canadian and the PCAOB auditor’s reports and provide a preview of the Canadian auditor’s report and an example of what might be disclosed in Key Audit Matters.

During the most recent quarter, there were no CSA developments. The SEC will be implementing procedures to expand non-public reviews of registration statements to all IPOs and offerings of new classes of securities, subject to providing sufficient timing for the public to evaluate those offerings. This change is expected to facilitate security offerings without the glare of the public until the offerings are ready to go to market.

The summer quarter has been fairly quiet on the accounting front with the FASB issuing two narrow scope amendments to its accounting guidance to deal with modifications of share-based awards and the determination of the customer in service concession arrangements. We expect to see an update to the hedge accounting standard and some other narrow scope amendments in Q3, 2017.

On the auditing front, the PCAOB issued its final rule to update the auditor’s report. The key feature of the new auditor’s report is the reporting of critical audit matters. The PCAOB final rule has been submitted to the SEC for approval.