Financial Instruments and Consolidation
Date: 22 May 2015, Friday
Time: 9.30 am to 4.45 pm
Venue: Singapore Marriott Tang Plaza Hotel, Grand Ballroom, Level 3
Organisers: Centre for Accounting & Auditing Research, Nanyang Business School (NBS), NTUandAccounting Standards Council (ASC)
This conference aims to examine current issues in financial reporting that will be of interest to accounting practitioners, preparers and industry. In particular, the conference will focus on the topics of financial instruments and consolidation.
The IASB has issued IFRS 9 Financial Instruments as part of its project to replace the existing IAS 39 Financial Instruments: Recognition and Measurement. ASC has recently issued FRS 109 Financial Instruments, which is the equivalent of IFRS 9, and it will be mandatorily effective for annual periods beginning on or after 1 January 2018. FRS 109 applies a classification approach that is based on the entity’s business model for managing its financial assets and the contractual cash flow characteristics of the financial asset. For impairment, FRS 109 uses the expected loss model to estimate and recognize the expected credit losses for financial assets. The new hedge accounting model of FRS 109 more closely aligns hedge accounting with the risk management activities undertaken by firms when hedging their financial and non-financial exposures and includes eligibility criteria for hedge accounting based on a more principle-based assessment of the strength of the hedging relationship.
A suite of FRSs was issued by ASC under its Consolidation project (FRS 27, 28, 110, 111 and 112) and became effective for annual periods beginning on or after 1 January 2014. In this conference, we will highlight the major provisions of these standards, and discuss the major impact of these standards on the preparation and presentation of consolidated financial statements. Topics to be covered include the concept of control, the distinction between joint operation and joint venture, and new disclosure requirements.
Most businesses will be or have been affected in one way or another by the changes in these accounting standards on financial instruments and consolidation. Thus, we feel that this is an opportune time to bring together different stakeholders to discuss the implications of these changes or to share experiences related to implementation issues. The programme for the conference includes presentations by NTU faculty on the changes and then panels comprising representatives from academia, ASC, Big 4 accounting firms and industry, will debate and answer questions on the impact these changes have had or will have on companies’ operations and financial performance. So there will be a balance of views from academia, the standard-setter, the audit profession and industry. There will also be a brief overview of the new revenue standard that will be mandatorily effective for annual periods beginning on or after 1 January 2017.
Leases & Revenue
Date: 19 July 2013, Friday
Time: 9.30 am to 4.15 pm
Venue: Mandarin Orchard Hotel, Main Tower, Ballroom, Level 6
Organisers: Centre for Accounting & Auditing Research, Nanyang Business School (NBS), NTU and Accounting Standards Council (ASC)
This conference aims to examine emerging issues in accounting that will be of interest to practitioners (including CFOs, Finance Directors, Financial Controllers, accountants and auditors) and academics, and also get the perspective from the standard-setter’s viewpoint. In particular, the conference will focus on the topics of leases and revenue recognition. A new exposure draft on leases has been issued recently and the new revenue standard is expected to be issued by the third quarter of 2013. All businesses will be affected in one way or another by the imminent changes, so this is an opportune time to bring together academia, the ASC, industry and practitioners to discuss the implications of the upcoming changes and any related implementation issues.
The direction that the new exposure draft on leases will take is to eliminate most operating leases for lessees. Currently, such operating leases are treated as rental contracts with the lessee not recording any asset or liability relating to the lease. In the future, it is likely that the lessee will have to recognize an asset representing its right to use the leased asset for the lease term and a corresponding liability to make future lease payments. For reporting entities with extensive operating leases currently, this change will result in a substantial increase in their asset and liability positions and affect their financial ratios and raise the possibility of potential breaches of loan covenants.
The new standard on revenue will adopt a control-based revenue recognition principle. Specifically, the new standard will require an entity to recognize revenue “to depict the transfer of promised goods or services to customer in an amount that reflects the consideration which the entity expects to be entitled in exchange for those goods or services”. For sales and services with multiple deliverables, the new standard will require the identification, measurement and recognition of each performance obligation. The new standard will supersede all extant revenue standards and interpretations and will therefore affect all reporting entities in their revenue recognition.
The programme for the conference includes presentations by NTU faculty on the upcoming changes and then panels comprising representatives from academia, the ASC, industry and practitioners, will debate and answer questions on the likely impact these changes will have on their operations and financial performance and how businesses can prepare for them. So there will be a balance of views from academia, the ASC, industry and practitioners.