IFRS Project Analysis: Amortized Cost, Equity Method, and Intangibles, Assignments of Accounting

Download IFRS Project Analysis: Amortized Cost, Equity Method, and Intangibles and more Assignments Accounting in PDF only on Docsity!

Week 4 Team 2 Week 4 Homework Tina Skinner DeVry University ACCT Professional Research for Accountants Week 4 Team 2 Week 4 Homework Professor Nwaogu November 19, 2024

Week 4 Team 2 Week 4 Homework Work Plan Projects: Amortised Cost Measurement, Equity Method, and Intangible Assets The International Accounting Standards Board (IASB) is currently involved in several key projects aimed at enhancing the clarity and consistency of IFRS standards. These projects address significant issues that have been identified through stakeholder feedback, as well as practical challenges in applying existing standards. Among the current initiatives, the projects on Amortised Cost Measurement, the Equity Method, and Intangible Assets are particularly notable for their broad scope and impact on financial reporting. This paper explores these three projects, providing an overview of their objectives, the current stage of work, and their potential implications. Amortised Cost Measurement The Amortised Cost Measurement project arose from concerns raised during the Post- implementation Reviews of IFRS 9: Classification and Measurement and IFRS 9: Impairment. Stakeholders highlighted significant application issues surrounding the effective interest method and the modification of financial instruments, particularly those modifications that lead to derecognition or the write-off of financial assets. As a result, the IASB launched this project to address these concerns and improve the application of amortised cost measurement. The primary objectives of the project are:

1. Clarification of Principles : To resolve the issues arising from the current amortised cost measurement requirements by providing clearer application guidance and, where necessary, introducing new principles.

Week 4 Team 2 Week 4 Homework reorganizing the standard’s requirements and enhancing the overall clarity IFRS, 2024a). The project is currently in the exposure draft stage, with the IASB having published the Exposure Draft: Equity Method of Accounting—IAS 28 (revised 202x) in September

2024. The draft proposes amendments to IAS 28 to resolve application questions and improve disclosure requirements in IFRS 12 and IAS 27. One of the key proposals is to reorder the requirements in IAS 28 to make them more logical and consistent. The draft is open for public comment until January 2025, and the IASB will use the feedback to finalize the amendments. This project is aimed at improving the application of the equity method, which is important for ensuring that investors have a reliable way of reporting their investments in joint ventures and associates (IFRS, 2024b; IFRS, 2024c). Intangible Assets The Intangible Assets project was initiated as a response to concerns raised during the Third Agenda Consultation regarding deficiencies in the reporting of intangible assets under IAS 38: Intangible Assets. Stakeholders expressed concerns about the scope of the standard, the recognition and measurement requirements for intangible assets, and the adequacy of the disclosures required. A particular area of concern was the difference in the accounting treatment for acquired and internally generated intangible assets. The objectives of this project are:
2025. Comprehensive Review : To assess whether the existing requirements in IAS 38 remain relevant and continue to reflect current business models, or whether improvements are needed.
2026. Broad Scope : While the title of the project focuses on intangible assets, the IASB is also considering whether the scope should extend beyond traditional assets and

Week 4 Team 2 Week 4 Homework

Week 4 Team 2 Week 4 Homework References IFRS. (2024a). IFRS - Amortised Cost Measurement. Ifrs.org. https://www.ifrs.org/projects/work-plan/amortised-cost-measurement/ IFRS. (2024b). IFRS - Equity Method. Www.ifrs.org. https://www.ifrs.org/projects/work- plan/equity-method/ IFRS. (2024c). Equity Method of Accounting IAS 28 Investments in Associates and Joint Ventures (revised 202x) Exposure Draft-Snapshot IFRS ® Accounting Standards. https://www.ifrs.org/content/dam/ifrs/project/equity-method/exposure-draft/iasb- snapshot-equity-method.pdf IFRS. (2024d). IFRS - Intangible Assets. Www.ifrs.org. https://www.ifrs.org/projects/work- plan/intangible-assets/ ISAB. (2024). IASB takes up research project on intangibles. Iasplus.com. https://www.iasplus.com/en/news/2024/04/iasb- intangibles

Week 4 Team 2 Week 4 Homework