IFRS Update 2019 Latest trends and experiences within IFRS October 2019
IFRS Update 2019
Latest trends and experiences within IFRS
October 2019
2© Deloitte 2019
Assurance OfferingsServices
Disruptive events – Exit readiness
and IPO assistance
Proces optimisation –financial processes
ERP support –Microsoft
Pension management services
Corporate Governance
Accounting Advisory,IFRS and DK GAAP
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IFRS 16
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Trends and experiences
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Trends and experiences
How did it go with the implementation? Impact of IFRS 16 and Disclosures in the Financial statementsWe have not yet seen a clear trend in how the companies will address IFRS 16 in their financials statements.
Administration burdenThe trend in the market is that IFRS 16 is handled centrally and handled as a group adjustment to the monthly reporting and not implemented in the daily bookkeeping due to the administrative burden and lack of supporting systems and processes.
Real economic effectsWe see clients shifting their focus from compliance with IFRS 16 to strategic optimisation of their lease portfolio in an IFRS 16 world. However, we also see that they are facing problems in terms of dealing with banks and other investors.
Complexity of contracts Even though most of our clients’ preliminary assessment indicated that their lease portfolio was quite simple and straightforward, it seems that most companies are surprised by the complexity of IFRS 16 and they still struggle to find the right level.
How and when to address modifications? We experience that many companies struggle a bit with how to handle modifications and when to apply these?
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Modifications and practical complexities
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Modifications and practical complexities
Six key observations – how do you address these?
Extending the term of a lease to which the § C10(c) practical expedient was appliedWhat processes have you put into practice to make sure that modifications of short-term leases are completely identified?
02
01Exercising an extension optionWhat processes have you put into practice to make sure that you evaluate on the extension options? And do you address them at the right level? 04
03
05
06
Extending a lease; when should the additional RoU asset and lease liability be recognised?Is an extension of lease term identified as a modification by your system or other processes? At what date does your system recognise the additional RoU asset and lease liability?
Leases with no end date (rolling contracts)What processes have you put into practice to make sure the right end date is set? How do you apply the “reasonable certain to exercise” assessment and revisit hereof? And is your system/tool supporting this?
Extension via a new contractHow do your existing processes identify new leases that should be accounted for as a modification?
Both parties have an option to terminate the lease – no penalty; termination option can be exercised at any time after one yearHave you considered all relevant factors such as “§ 61-62 of the Business Rent Act” in Denmark or other local factors throughout the group?
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Modifications and practical complexities
IFRS 16’s lease modification guidance diagram:
Changes that are not part of the original terms of the lease
Change in scopeChange in
consideration
Adding assetsRemoving
assets
Extending
lease term
Shortening
lease term
At standalone
price
Not at
standalone
price
Separate
lease
Not a separate lease
Account for at effective date of modification
The legal or contractual labelling of the modification is not relevant in the assessment of whether the modification is a separate lease
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Accounting and disclosure considerations
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IFRS 16 general requirements for impairment tests of the RoU
Definition
“A lessee shall apply IAS 36 Impairment of Assets to determine whether the RoU is impaired and to account for any impairment loss identified” (IFRS 16.33)
At which level shall the RoU be tested for impairment?
Which consequences of IFRS 16 on the determination of
• The carrying amount of the RoU’s CGU?
• Value in use (VIU)?
• Fair value less costs to sale (FVLCTS)?
• The discount rate?
What are the practical consequences and common pitfalls?
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How to determine VIU?
“Estimates of future cash flows shall not include cash inflows or outflows from financing activities” (IAS 36.43(b))
Estimated cash outflows over the projection period should exclude lease payments for those reflected in the lease liability but should include those relating to
• Variable lease payments
• Lease payments related to short-term and low value leases
• Lease renewals if the lease term is shorter than the projection period
• Projected effects of indexation/future readjustments of RoU based on an index or a rate, as they are not included in the lease liability
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Wrap-up
Pre IFRS 16 implementation impairment tests models are not IFRS compliant anymore
The lease liability is a financial liability regardless of where it is presented in the BS or how it is labelled
Lease payments are a repayment of the financial liability, and thus shall not be included in the measurement of VIU
As per IAS 36.78, the lessee may choose to include the lease liability carrying amount in the CGU carrying amount
If so, in application of the May 2016 IFRS IC agenda decision, the previously determined VIU shall
also be adjusted by the lease liability carrying amount
If the RoU is tested within a CGU and if CF are projected for a period longer than the lease term, cash
outflows for lease renewals shall be included in the CF projections (capex to maintain the CGU)
Lease payments excluded from the lease liability shall always be included in the measurement of the VIU (e.g. variable payments)
Impact on WACC ?
Impact on multiples used for determining FV less cost to sell?
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Accounting considerations
IFRIC discussions: Depreciation of leasehold improvements beyond enforceable period
Non-cancellable Not reasonably certain to extend
Expected
Non-cancellable
Expected + If positive economic evidence
Leasehold improvement depreciation period?
Lessor option
Leasehold improvement depreciation period?
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Tax and VAT considerations
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IFRS 16 – Related tax issues
Deferred tax related to assets and liabilities arising from a single transactionIASB Update Jan 2019 – ED to be released Q2 2019 (narrow scope amendment): Recognition of deferred tax when lessee recognises an asset and a liability at initial lease date applying IFRS 16; IRE in IAS 12:15/IAS 12:24 would be narrowed down, i.e. deferred tax would be recognised when equal amounts of taxable and deductible temporary differences arise from initial recognition of asset and liability.
01
02Danish tax rules on limited deductions of interest Interest from lease contracts to be included from the perspective of the lessor, i.e. still necessary to consider operating vs finance lease for tax purposes similar to IAS 17.
03VATIf an amount is collected by lessor on behalf of the tax authorities, the VAT does not 'relate to the right to use the underlying asset'. Therefore, it does not form part of either 'lease payments' or 'variable lease payments' as defined in Appendix A to IFRS 16 (for either lessee A or lessor B) and is not a cost to be included in the consideration for the contract under IFRS 16:B33. This is consistent with the treatment of such taxes under IFRS 15:47.
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Presentation and Disclosure
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In the notes
Presentation and disclosure - Lessee
Investment property leases
Revalued RoU
assets (IAS 16)
Lease liabilities
Financial information• Depreciation by class, interest expense • Low-value or short-term lease expenses (not<1 month)• Variable lease payments• Income from subleases• Total cash flow• RoU asset: Additions, carrying amount at the end of
reporting period• Gain or losses on sale and leasebacks• Fact: Low-value or short-term lease exemption applied
Revalued RoU asset (IAS 16)• Effective date of revaluation• Whether independent valuation expert involved
Lease liabilities • Separate IFRS 7 maturity analysis
Investment property leases • Some IAS 40 disclosures
Qualitative and quantitative disclosures, e.g.• Nature of lease activities • Exposure to possible future cash outflows not reflected in
lease liability• Restrictions or covenants imposed by leases• Sale and leaseback transactions
Single note/ separate section
Remember significant
judgements as per IAS 1
18© Deloitte 2019
In the notes
Presentation and disclosure - Lessor
Investment property leases
Operating lease
Lease liabilities
Finance lease• Selling profit or loss• Finance income on net investment• Income from variable lease payments not included in net
investment• Quantitative and qualitative explanation of significant
changes in net investment• Maturity analysis of lease payments receivable showing
undiscounted lease payments on an annual basis for each of the first five years and total for the remaining years
• Reconciliation of undiscounted lease payment to net investment in the lease
Operating lease• Lease income separately disclosing income relating to
variable lease payments not depending on an index or a rate• PP&E: Apply disclosure requirements in IAS 16,
disaggregating into assets subject to operating lease• Apply IAS 36, IAS 38, IAS 40 and IAS 41 to assets subject to
operating lease• Maturity analyses of lease payments, showing undiscounted
lease payments to be received on an annual basis for the first five years and total for the remaining years
Qualitative and quantitative disclosures, e.g.• Nature of lease activities • How lessor manages risks associated with rights retained in
underlying asset, including risk management strategy and means to reduce that risk
• Explanation of significant changes in carrying amount of net investment in finance leases
Remember significant
judgements as per IAS 1
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Practical example – Balance sheet
NNIT A/S – 2018 Annual Report
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Practical example – Note disclosure
NNIT A/S – 2018 Annual Report
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Practical example – Balance sheet
Royal Unibrew A/S – 2018 Annual Report
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Practical example – Note disclosure
Royal Unibrew A/S – 2018 Annual Report
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Practical example – Balance sheet
Deutsche Post DHL Group – 2018 Annual Report
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Practical example – Note disclosure
Deutsche Post DHL Group – 2018 Annual Report
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Practical example – Note disclosure
Deutsche Post DHL Group – 2018 Annual Report
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IFRS 15 and 9 (7)
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IFRS 15 and 9 (7)
It is our impression that there is a need to revisit the disclosures provided
Based on national and
international reviews of
disclosures related to
IFRS 9 (7) and IFRS 15,
it is our impression that
there is a need to revisit
the disclosures in 2019.
We recommend to
initiate procedures
now to revisit
disclosure
requirements.
The Danish Business Authority
is currently in the process of
reviewing a number of annual
reports.
It is our expectation that
findings related to IFRS 9 and
15 disclosures will occur.
IFRS 15
Based on our experience, particular
attention should be drawn to the
following disclosures:
• Value of performance obligations
that are unsatisfied as of the end of
the reporting period
• Explanation of when the entity
expects to recognise as revenue the
amounts of unsatisfied performance
obligations.
IFRS 9 (7)Based on our experience, particular attention should be drawn to the following: • Impairment and expected
credit loss model• Hedge accounting
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IFRS 15Revenue from Contracts with Customers
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IFRS 15 Revenue from Contracts with Customers
Disclosures provided in 2018 annual reports for non-FSI C25 companies
8
4
5
Approach
No impact
Presentation impact only
Recognition and measurement impact
0 5 10 15
< -50m DKK
-50 - 0m DKK
0 m.DKK
0 - 50m DKK
> 50m DKK
Impact
Companies
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In the notes
Presentation and disclosure – IFRS 15
Contract balances
Performance
obligations
Remaining performance obligations
Presentation• Separate presentation of financing effects• Contract assets and liabilities• Separate presentation of return assets from refund liabilities
Performance obligations• Description of satisfaction of performance obligations• Significant payment terms• Nature of goods or services within the performance obligations• Returns, refunds, warranties and other obligations
Remaining performance obligations• Amount of transaction price allocated to performance obligations
that are unsatisfied (or partially unsatisfied) as of the end of the reporting period
• When the entity expects to recognise revenue from remaining performance obligations
Contract balances• Opening and closing balances of receivables, contract assets and
liabilities• Revenue recognised in the reporting period that was included in
the contract liability at the beginning of the period
Qualitative and quantitative disclosures, e.g.• Disaggregation of revenue into categories that depict nature,
amount, timing and uncertainty• Methods used for recognising revenue• Determination of transaction price
Remember significant
judgements as per IAS 1
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IFRS 15 Revenue from Contracts with Customers
Disclosure requirements we believe particular attention should be drawn to
Disclosure requirement Example (Demant A/S, 2018 Annual Report)
An entity shall disclose the aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied (or partially unsatisfied) as of the end of the reporting period.
[IFRS:120(a)]
An entity shall disclose when the entity expects to recognise revenue amounts as disclosed in accordance with § 120(a).
[IFRS:120(b)]
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IFRS 9 Financial InstrumentsIFRS 7 Financial Instruments:Disclosures
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Changes
IFRS 9 (7)
Recap of changes
Classification and measurementNew model regarding classification and measurement for financial assets based on:• The entity’s business model• Contractual cash flow characteristics of the
individual asset
Hedge accounting• New model closely aligned hedge
accounting with risk management activities• More formalised requirements to document
risk management strategy• More eligible hedging instruments (e.g.
non-derivatives at fair value)
Impairment• Change from incurred loss model to
expected loss model means earlier recognition of expected credit losses
• 12-month or full lifetime expected losses• Full lifetime expected losses per default for
trade receivables without financing element
DisclosuresSignificant increase in disclosure requirements, particularly related to hedge accounting and credit losses
34© Deloitte 2019
IFRS 9 (7)
Disclosures provided in 2018 annual reports for non-FSI C25 companies
15
0 2
Approach
No impact
Presentation impact only
Impact on recognition and measurement
0 5 10 15 20
< -20 m DKK
-20 - 0m DKK
0 m.DKK
0 - 20m DKK
> 20m DKK
Impact
Companies
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By credit risk rating grades, the gross carrying amount shall be disclosed for the below
Impairment and expected credit loss model | IFRS 7:35M-35N
Contract balances
Life-time ECL
Remaining performance obligations
12 month ECL• For which the loss allowance is measured at 12-month expected credit
losses
Life-time ECLa) For which the loss allowance is measured at life-time expected credit losses
and that are:
i. Financial instruments for which credit risk has increased significantly
since initial recognition
ii. Financial assets that are credit-impaired
iii. Trade receivables, contract assets or lease receivables
Othera) Purchased or originated credit-impaired assets
For trade receivables, contract assets and lease receivables to
which the entity applies the simplified approach under IFRS
9.5.15, the above information may be based on a provision
matrix
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IFRS 9 (7)
Impairment and expected credit loss model – FLSmidth example
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IFRS 9 (7)
Impairment and expected credit loss model – DSV example
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IFRS 9 (7)
Impairment and expected credit loss model – ISS example
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IFRS 9 (7)
Impairment and expected credit loss model – ISS example (continued)
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Disclosures
Hedge accounting
Contract balances
Cash-flow
hedges
Remaining performance obligations
GeneralAn entity shall disclose in a tabular format the following amounts designated as hedging instruments separately by risk category for
each type of hedge:
a) The carrying amount of the hedging instruments (financial assets separately from financial liabilities)
b) The line item in the balance sheet that includes the hedging instrument
c) The change in fair value of the hedging instrument used as the basis for recognising hedge ineffectiveness for the period
d) The nominal amounts of the hedging instruments
In addition, the following amounts related to the hedged items must be disclosed in a tabular format separately by risk category for
cash flow hedges:
i. The change in value of the hedged item used as the basis for recognising hedge ineffectiveness
ii. The balance in the cash flow hedge reserve
iii. The balance remaining in the cash flow hedge reserve from any hedge relationships for which hedge accounting is no longer
applied
Cash-flow hedgesAn entity shall disclose, in a tabular format, the following amounts separately by risk category for the types of hedges as follows for
cash flow hedges:
a) Hedging gains or losses of the reporting period that were recognised in OCI
b) Hedge ineffectiveness recognised in P&L
c) Line item in comprehensive income that includes the recognised hedge ineffectiveness
d) The amount reclassified from cash flow reserve into P&L (differentiating between amounts reclassified because the cash flows
are no longer expected and amounts reclassified because the hedged item has affected P&L)
e) The line item in statement of comprehensive income that includes the reclassification adjustments
f) For hedges of net positions, the hedging gains and losses recognised in a separate line in P&L
ReconciliationAn entity shall provide a reconciliation by risk category of each component of equity and an analysis of Other comprehensive income
in accordance with IAS 1, that taken together:
a) Differentiate, at a minimum, between hedging gains and losses recognised in the hedging reserve in the period, and amounts
recycled from the hedging reserve to P&L in the period
b) Differentiates between amounts associated with time value of options that hedge transaction-related hedged items and that
hedge time period-related hedged items respectively
c) Differentiates between amounts associated with forward elements of forward contracts ant the foreign currency basis spreads
of financial instruments that hedge transaction- related hedged items, and that hedge time period-related hedged items
respectively
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IFRS 9 (7)
Hedge accounting – NKT
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IFRS 9 (7)
Hedge accounting – NKT
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iXBRL
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New
requirements
from 2020
The European Single Electronic Format (ESEF) in brief
New electronic format for annual reports for listed companies from 2020
XBRL-”tags” to be embedded in the xHTML document• The XBRL “tags” shall be made against the
ESEF XBRL taxonomy• Preparers shall mark-up items and
disclosures using the taxonomy element having the closest accounting meaning to the marked up disclosure; if the closest taxonomy element misrepresents the accounting meaning of the disclosure, issuers shall create an extension taxonomy element
• Primary financial statements shall be marked up in detail; notes will need to be marked up by applying mark-ups for whole sections of the notes (block tagging)
Submission immediately after approval by the board of directors• The xHTML document shall be submitted to
the Officially Appointed Mechanism (DK: Finanstilsynet) following the approval of the annual report for publication
Auditors report to include XBRL “tags”• The XBRL-tags are to be “audited” by the
Company’s auditor
New format xHTML– PDF is not an option• All Annual Financial Reports (AFRs) shall be
prepared and submitted in xHTML-format.• Where AFRs contains IFRS consolidated
financial statements, these shall be labelled with XBRL “tags” directly in the xHTMLdocument.
The Regulatory Technical Standards (RTS) on ESEF will apply to all issuers subject to the requirements contained in the Transparency Directive to make public Annual Financial Reports (AFRs). The new requirements apply for the 2020 AFRs.
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Filings in practice
XBRL & EU – European Single Electronic Format
Consolidated IFRS
financials
Parent company financials
Report of the Board of
Directors
Auditor’s report
Management Report
TheOfficially Appointed Mechanism (OAM) as defined by the
Transparency Directive
(Finanstilsynet)
In developmentEuropean Financial
Transparency Gateway (EFTG)
XBRL
XHTML
2020 & 2021
Detailed tagging
Each figure in the primary financial
statements (P&L, OCI, BS, CF and
Equity) is tagged with an
XBRL tag plus certain specific
information
2022
Block tagging
Notes are tagged as blocks so that
each note is associated with an
XBRL tag plus certain other
disclosures.
Consolidated IFRS financials
XHTML
XHTML
XHTML
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The European Single Electronic Format (ESEF) in brief
The submission proces
• ESEF formatted AFRs
• xHTML
• InlineXBRL
Issuers
• Storage of ESEF files
• No validation
Officialy AppointedMechanism (OAP) (Finanstilsynet) • Access to ESEF files
• Search documents
• Historical data
Users
47© Deloitte 2019
The ESEF in brief
What do embedded XBRL tags look like?
… a standard web page with additional layer of information that can be displayed when clicking on a certain tagged element
Source: ESMA 2019
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How to get prepared for the ESEF
Timing is key – Start early!
LEARNING• Familiarise
yourself with the ESEF requirements and with the ESEF taxonomy
• Educate your teams and management
1
STRATEGY • In-house or
externalized production?
• Governance of the ESEF project (validation, key actors, etc.
3MAPPING• Map your
financial statements to the ESEF taxonomy
• Analyse the need for extensions and anchors
2
SOFTWARE TOOL• Start assessing the
right solution• “Built in” or “bolt on”
approach• Standalone iXBRL or
disclosure management solutions
4
49© Deloitte 2019
ParsePortMichael Wennerstrøm, Sales Director
+45 53536845
50© Deloitte 2019
Whats new?
PDF -> XBRL -> iXBRL
51© Deloitte 2019
XBRLFinance
CORPORATE
COMMUNICATION
CURRENT WORKFLOWFUTURE WORKFLOW
iXBRL
Auditor
i
52© Deloitte 2019
Feedback
Filing companies want to keep PDF as this is predominant format.
Consolidation of financial data ends in Excel.
Many stakeholders – Many cumbersome processes.
(Visual, financial, legal, IR, Management etc.)
XBRL competences is limited and difficult to learn.
Transition from XBRL -> iXBRL should be as seamless as possible.
Production process need to be updated.
Support for last minute changes.
53© Deloitte 2019
Our recommandation
Start early.
Eat the elephant one bite at a time
Utilize the available resources.
Deloitte, events, XBRL Denmark, authorities, solution providers.
Develop a strategy that lasts for +2 years whilst keeping ESMA
roadmap in mind.
Remember the graphical part of the Annual report
Pilot your 2019 annual report.
Consider if taxonomy tagging & XBRL knowledge adds value or
should be outsourced.
54© Deloitte 2018
Trends in financial reporting
55© Deloitte 2019
Trends in financial reporting
Future impacts and trends
Annual
Report
2019
Annual
Report
2029
IASB Primary Financial Statement project
IASB Management Commentary project
Production
Dissemination
Consumption
Tech
no
log
yA
ccou
nti
ng
Ru
les
No
n-f
inan
cia
l
Rep
orti
ng
Financial Reporting
Non-Financial Reporting
56© Deloitte 2019
Trends in financial reporting
Latest trends and insights from DK and abroad
Chairman/CEO letterSummarising events of the year in one-pagers combined with “the annual report” in 10 minutes.
0201
Business modelExplain the business model and graphics and illustrations to make a complex business model easy to understand.04
03
05
06
Purpose and cultureIncreasing trend in disclosing the Company’s purpose and culture and setting out company purpose beyond profits for shareholders.
OutlookMore companies now include not only one year outlook, but also outlook for the medium term.
Climate changeFrom a risk perspective, the World Economic Forum’s 2019 annual risk survey identifies the climate crisis as the number one threat to the global economy. We expect voluntary disclosure on the companies’ policies/actions on climate change.
CSR, SDGs and sustainabilityPlace detailed statements on the website and provide links and a short summary in the annual report.
57© Deloitte 2019
Trends in financial reporting
Latest trends and insights from DK and abroad
APMsUse of APMs remains popular. Compliance with ESMA guidelines remains somewhat mixed.
0807
Accounting policiesWhen talking about judgements and estimations, there should be a clear distinction hereof.10
09
11
12
Remuneration reportAre becoming more frequent in the annual reports, probably preparing for the upcoming requirement.
Notes to the financial statementsTendency is to include - before each group of notes - a cover page summarising the content of the group and comments on the main developments in the group of notes in the section.
Non-financial informationMany investors are keen to have insight into the level of distributable profits a company has.
Supplier financing arrangementsRegulators have called for more insight into companies’ supplier financing arrangements. Only few companies include disclosures on this matter.
58© Deloitte 2019
Trends in financial reporting
ESG reporting
We continue to see growing expectations from investors for companies to disclose ESG information and data in connection with their financial reporting.
The stages of improving ESG data quality
Improving ESG* data quality can e.g. be obtained through a 7-step approach aligned with the COSO Framework:
1. The business case
2. Setting an objective and developing a roadmap
3. Understanding the improvements your company needs
4. Making changes to improve ESG data quality
5. Reporting on internal controls
6. Monitoring and ongoing improvements
7. Assurance
* ESG = Environmental, Social and Governance
ESG procedures
The WBCSD / FSR guide to improving ESG information quality was published in June 2019:
https://www.wbcsd.org/Programs/Redefining-Value/External-Disclosure/Assurance-Internal-Controls/Resources/Guidance-on-improving-the-quality-of-ESG-information-for-decision-making
59© Deloitte 2018
Other topics
60© Deloitte 2019
Other topics
New IFRSs and amendments
2019
IFRS 16 Leases
2021
IFRIC 23 Uncertainty over income Tax Treatments
IFRS 17 Insurance Contracts
IAS 28: Long-term Interests in Associates and Joint
Ventures
Annual Improvements to IFRSs 2015-2017 Cycle
IAS 19: Plan Amendment, Curtailment or Settlement
Annual Improvements to IFRSs 2015-2017 Cycle
IAS 19: Plan Amendment, Curtailment or Settlement
Amendments
New IFRS / IFRIC
Not yet endorsed by EU
IAS 1 and 8: Definition of Material
IFRS 3: Definition of a business
2020
IFRS 9: Prepayment Features with Negative
Compensation
61© Deloitte 2019
IFRIC 23 Uncertainty over Income Tax Treatments
Other topics• Probability assessments
Uncertain tax positions are likely to be based on significant accounting estimates and shall be based on probability assessments and recognised at either of the following two methods: the most likely amount or the expected value method.
• Delayed paymentWhen there is no significant uncertainty with respect to the overall amount of income tax payable and an entity deliberately delays payment, the resulting interest and penalties can be clearly distinguished from the assessed income tax. Accordingly, the interest and penalties should be presented separately according to their nature (i.e. either as a finance cost (interest) or operating expense (penalties)).
• Access to informationWhen performing estimates and judgements, companies now have to assume that tax authorities have access to all relevant information.
• Detection riskDetection risk should not be considered in the recognition and measurement of uncertain tax treatments.
• Gross presentationProvision for uncertainties over tax treatments (e.g. related to transfer pricing) shall be recognised on a gross basis, unless off-setting rights exists within one country’s joint taxation. Also current and deferred tax position are reported gross under IAS 12.
• Effective dateAn entity shall apply this Interpretation for annual reporting periods beginning on or after 1 January 2019. Earlier application is permitted.
• Interest and penaltiesIf an entity considers a particular amount payable or receivable for interest and penalties to be an income tax (e.g. due to significant uncertain tax positions), then that amount is within the scope of IAS 12 and, when there is uncertainty, also within the scope of IFRIC 23.
• BrexitShould Brexit be a reality, there is uncertainty in relation to whether the existing EC Arbitration Convention will apply – similarly it is uncertain whether the new EU Directive on tax dispute resolution mechanisms in the European Union will apply (this will depend on whether UK reach an agreement with the EU covering this).
62© Deloitte 2019
Remuneration Policy - We see particular complexity in ensuring the new remuneration policy being aligned with the Company’s business strategy, long-term interests and sustainability
Other topics
Content of the new Remuneration Policy Gap analysis
As the drive for improved corporate governance spreads across the EU, there is an increased focus on executive pay, also from the policymakers and the press. In order to ensure compliance with applicable law requirements, Deloitte has established a framework for a structured, simple and actionable gap analysis in order to get started with the implementation of the EU Shareholder Rights Directive (“SRD II”) as implemented into Danish Companies Act, section 139a.
63© Deloitte 2019
Remuneration Report - 33% of Danish Large Cap companies are not complying with the current 2018 Corporate Governance recommendations
Other topics
Remuneration Report Survey
We have surveyed the remuneration reports for the 39 Danish Large Cap companies for the period 2014-2018 in order to check for compliance with the current Danish Corporate Governance recommendations. We have had focus on the main principles for the recommendations being:
• Whether a separate remuneration report was prepared and published on the Company’s website
• Whether the remuneration reports included disclosure on individual salaries of executives
• Whether the remuneration reports included a 3-year overview of remuneration
Our findings are noted below:
• 33% of the Danish Large Cap companies are not complying with all of the current 2018 Corporate Governance recommendations
• Only 51% of the Danish Large Cap companies published a separate 2018 remuneration report on their website
• 18% of the surveyed companies did not disclose individual salaries for executives
• 23% of the surveyed companies did not disclose a 3-year overview
64© Deloitte 2019
Assurance OfferingsServices
Disruptive events – Exit readiness
and IPO assistance
Proces optimisation –financial processes
ERP support –Microsoft
Pension management services
Corporate Governance
Accounting Advisory,IFRS and DK GAAP
65© Deloitte 2019
Appendix I
Key contacts – Assurance Offerings
Manager, Complex Accounting
Phone: +45 53 43 40 12
Ismaeel Rasul
Partner, Complex Accounting
Phone: +45 22 20 23 56
Bjarne Iver Jørgensen
Partner, Corporate Governance
Phone: +45 21 27 65 58
Martin Faarborg
Director, Process Optimisation
Phone: +45 30 78 21 47
Casper Kjær Andersen
Partner, Disruptive Events
Phone: +45 30 93 59 82
Bjørn Rosendal
Manager, Complex Accounting
Phone: +45 30 93 48 53
Lasse René Sørensen
66© Deloitte 2019
Appendix I
Key contacts – Other
Director, Audit & Assurance
Phone: +45 20 23 77 72
Jan Peter Larsen
Senior Manager, Audit & Assurance
Phone: +45 29 43 00 14
Henrik Gustavsen
Partner, Audit & Assurance
Phone: +45 22 20 28 26
Søren Nielsen
Partner, Strategic & Reputation Risk
Phone: +45 20 75 78 25
Marie Voldby
Director, Audit & Assurance (iXBRL)
Phone: +45 23 23 20 25
Henrik Grønnegaard
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