IASB Organisation and Structure

2 2

I. IASB Organisation and

structure

Projects with relevance to the

supervision of the financial sector

7 7

Revenue Recognition – What is it about

- Single revenue recognition model – IASB and

FASB

- Revenue recognition requirements in US

GAAP differ from those in IFRSs

- both are considered in need of improvement

- To be applied across industries and

geographical regions

- Principle - recognise revenue when

performance obligations satisfied

- Performance obligations = transferring goods

and services to a customer

8 8

Revenue Recognition – how does this

apply to the financial sector

- Revenue earned on elapse of time

• Insurance: the performance obligation is the

provision of risk bearing services –

• Banking: performance obligation is the granting

of a loan or the investment into savings

- Issues

- Acquisition costs – loss on inception

- Time value of money not explicitly considered

– issue for long term contracts

- Remeasurement – locking in measurement

would not work for long-term contracts

- Contract boundaries

9 9

Consolidation – What is it about

- Single IFRS on consolidation to replace:

• the consolidation requirements of IAS 27 Consolidated and

Separate Financial Statements and

• SIC-12 Consolidation – Special Purpose Entities.

- a revision of the control definition

- enhanced disclosures about consolidated and

unconsolidated entities

- Principle - reporting of a parent and its

subsidiaries as if single entity.

- Considerations focusing on structured entities