Financial Reporting


  FASB issued an exposure draft of a proposed Statement of Financial Accounting Standards, Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses.

 

The goal of the proposed statement is to provide more information regarding the nature of credit risk inherent in the creditor’s portfolio of financing receivables, how that risk is analyzed and assessed in arriving at the allowance for credit losses; and the changes and reasons for the changes, in both the receivables and the allowance for credit losses. The proposed statement would be effective beginning with the first interim or annual reporting period ending after Dec. 15, with early application encouraged.

 

The comment deadline was Aug. 24. The draft is available at tinyurl.com/krq4b9.

 

 

  The International Accounting Standards Board (IASB) issued amendments to IFRS 2, Share-based Payment, to clarify the accounting for group cash-settled share-based payment transactions. The amendments respond to requests the IASB received to clarify how an individual subsidiary in a group should account for some share-based payment arrangements in its own financial statements. In these arrangements, the subsidiary receives goods or services from employees or suppliers, but its parent or another entity in the group must pay those suppliers.

 

The amendments clarify the scope of IFRS 2 and its interaction with other standards. An entity that receives goods or services in a share-based payment arrangement must account for those goods or services no matter which entity in the group settles the transaction, and no matter whether the transaction is settled in shares or cash. The board clarified that in IFRS 2 a “group” has the same meaning as in IAS 27, Consolidated and Separate Financial Statements, that is, it includes only a parent and its subsidiaries.

 

The amendments to IFRS 2 also incorporate guidance previously included in IFRIC 8, Scope of IFRS 2, and IFRIC 11, IFRS 2—Group and Treasury Share Transactions. As a result, the IASB has withdrawn IFRIC 8 and IFRIC 11.

 

 

  The IASB published a proposed non-mandatory framework to help companies prepare and present a narrative report, often referred to as management commentary or management discussion and analysis. The IASB believes that providing non-mandatory guidance will improve the consistency and comparability of management commentary across jurisdictions, according to an IASB press release.

 

Comments are due March 1, 2010. The proposal is available in the “Open to Comment” section of iasb.org.

 

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