IFRS 3.0 IFRS is going into the next phase. Overview of the key changes

Transcription

1 IFRS 3.0 IFRS is going into the next phase Overview of the key changes

2 IFRS 3.0 What does it mean? The approaching changes to the IFRS are so significant that, after the last far-reaching amendments in 2009 which coined the term IFRS 2.0, we again find ourselves faced with a whole new version, IFRS 3.0. This time, com - panies will be confronted with even more sweeping changes which may have a decisive effect on the form and structure of their IFRS financial statements. Since adaptations to systems and processes will be unavoidable in most cases, preparers of financial statements will be well advised to gain an early understanding of IFRS 3.0. We trust that this brochure provides you with an overview of the new requirements as well as our recommendations for application of the new rules.

3 The new challenge for IFRS reporters is IFRS 3.0 Ernst & Young s IFRS Solutions Center GSA has developed detailed solutions for each amendment and has made available a number of useful tools. Ernst & Young will support you throughout the entire change process from preparing to introducing the new accounting provisions. We will customize our modular change management approach to your individual needs and requirements. From coaching and holding joint workshops through to developing and implementing complex functional concepts and project management, we offer you tailored support services for all business areas affected by the change. Financial reporting, financial statements and financial ratios Processes and IT systems Business Project management Contact us to find out more! Our professionals from the IFRS Solutions Center will answer your questions and support you on your IFRS 3.0 project.

4 Consolidated Financial Statements and Joint Arrangements Fair Value Measurement Employee Benefits Single control model More judgments Elimination of proportionate consolidation Joint operation vs. joint venture Legal form of the agreement no longer applicable Expanded disclosure requirements Guidance and clarifications on determining fair value Fair value is clearly defined as an exit price Highest and best use of non-financial assets The value of financial liabilities must reflect the non-performance risk Expanded disclosure requirements Removal of the corridor method Returns on plan assets are recognized based on the discount rate used to measure the pension obligations Phased retirement obligations may no longer be recognized as termination benefits The amendments are effective for fiscal years beginning on or after 1 January In context with the EU-Endorsement process there are discussions underway to postpone the (mandatory) initial implementation date of IFRS for one year. The amendments are effective for fiscal years beginning on or after 1 January The effective date may be deferred by one year under the EU endorsement process. The amendments are effective for fiscal years beginning on or after 1 January The effective date may be deferred by one year under the EU endorsement process.

5 Financial instruments Leases Revenue Recognition IFRS 9 supersedes IAS 39 New classification and measurement requirements New rules for recording impairment losses Simplified hedge accounting New offset requirements Lessee: Right-of-use concept On-balance sheet accounting for all leases with a term of more than 12 months Lessor: Receivable and residual approach Transfer of control concept replaces the risks and rewards concept More accounting estimates and judgments required by management Changes in revenue recognition for multi-element arrangements and construction contracts Changes in accounting practice in the software and telecommunications industries in particular Expanded disclosure requirements All changes are expected to be effective from 1 January The changes are expected to be effective from 1 January The changes will not be effective before 1 January 2015.

6 Ernst & Young methodology IDDDS Ernst & Young s phase-oriented IDDDS methodology offers you a practice-proven, systematic project approach to successfully implementing the new requirements while maintaining the greatest possible flexibility. Identify Diagnose Design Deliver Sustain Relevance of the new provisions Defining the IT environment, processes, organization Defining project objectives Current accounting Implications of the new provisions Diagnosis report Target state, BC, project structure Introduction plan, critical success factors Competence model Functional/IT concept Choice of system Training concept Implementation incl. reporting Test and error management Documentation Training Release Determine project success Implementing organizational structure Launching continuous improvement program Financial statements and financial ratios Processes and IT systems Business Project management Ernst & Young will support you throughout the entire change process from preparing to introducing the new accounting provisions.

7 IFRS Solutions Center GSA With good tools and a reliable compass in hand, you can tackle any journey and reach any destination regardless of how complicated the route is or how ambitious the goal. Our IFRS Solutions Center aims to give you the right tools to guide your company successfully through the many changes to IFRS. IFRS.Solutions.Center-GSA@de.ey.com IFRS Solutions Leader Jörg Bösser Operational Manager Gerd Winterling Tel Central region Jörg Bösser Tel joerg.boesser@de.ey.com West region Andreas Muzzu Tel andreas.muzzu@de.ey.com North/East region Stefania Mandler Tel stefania.mandler@de.ey.com Southwest region Helge-Thomas Grathwol Tel helge-thomas.grathwol@de.ey.com Bavaria region Dr. Christine Burger-Disselkamp Tel christine.burger-disselkamp@de.ey.com Christiane Hold Tel christiane.hold@de.ey.com Switzerland Roger Müller Tel roger.mueller@ch.ey.com Austria Dr. Christoph Fröhlich Tel christoph.froehlich@at.ey.com Visit our website ( or the Ernst & Young Solutions Center: IFRS.Solutions.Center-GSA@de.ey.com

8 Ernst & Young Assurance Tax Transactions Advisory About Ernst & Young Ernst & Young is a global leader in assurance, tax, transaction and advisory services. Worldwide, our 152,000 people are united by our shared values and an unwavering commitment to quality. We make a difference by helping our people, our clients and our wider communities achieve their potential. Ernst & Young refers to the global organization of member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit EYGM Limited All Rights Reserved. SRE This publication contains information in summary form and is therefore intended for general guidance only. It is not intended to be a substitute for detailed research or the exercise of professional judgment. Neither EYGM Limited nor any other member of the global Ernst & Young organi zation can accept any responsibility for loss occasioned to any person acting or refraining from action as a result of any material in this publication. On any specific matter, reference should be made to the appropriate advisor. Expire Date 6 January 2012