IFRS® Foundation

The Future of Financial

Reporting
Hans Hoogervorst
Chairman, International Accounting Standards Board

October 2017

The views expressed in this presentation are those of the presenter, not necessarily those of the
International Accounting Standards Board or IFRS Foundation.
Copyright © 2017 IFRS Foundation. All rights reserved
IFRS Foundation 2

• Headquartered in London, UK
• Regional Asia-Oceania office in Tokyo, Japan
International organisation 3

150 staff
30 nationalities
Adoption of IFRS Standards 4

126 of 150 jurisdictions

require IFRS Standards
for all or most publicly
accountable companies

84%

= IFRS Standards required

 5

IFRS Foundation 5

Recent developments

Copyright © IFRS Foundation. All rights reserved

New IFRS Standards 6

Standard Big change Effective date

IFRS 9 Financial Instruments Expected loss model replaces 2018

incurred loss model

IFRS 15 Revenue from Global Standard - IASB and 2018

Contracts with Customers FASB converged

IFRS 16 Leases All leases onto balance sheet 2019

IFRS 17 Insurance Contracts Truly international, current 2021

measurement
Supporting implementation / application 7

New Transition Resource Groups

Standards
Webinars and other supporting materials
Conferences

Existing
IFRS Interpretations Committee
Standards
IFRIC Interpretations
Agenda decisions
Narrow-scope
amendments
 8

IFRS Foundation 8

Today and the future

Copyright © IFRS Foundation. All rights reserved

Challenges to financial reporting 9

Gap between book

Disclosure overload
value and market value

Big data, artificial

Sustainability reporting
intelligence
Keep calm and carry on 10

Financial reporting will

remain the main anchor for
investors

Big data and artificial Improve what

intelligence = supplement,
we have
not replace

Period of calm needed

Priorities until 2021 11

Better Communication in Financial Reporting

Primary
Disclosure IFRS
Financial
Initiative Taxonomy
Statements

Content
Content and its organisation
delivery
Disclosure Initiative 12

• Disclosure problem:
– Not enough relevant information
– Too much irrelevant information
– Poor communication

Improved
Enabling Improved
disclosures &
preparer disclosure
better
judgement requirements
communication
Making Materiality Judgements 13

‘One-stop materiality shop’

All IFRS materiality requirements

+
Practical guidance

+
Examples
Meaningful disclosures 14

• 6 case studies
– Wesfarmers Ltd
• Before and after illustrations
• Show companies’ journeys
• Inspire others
Primary Financial Statements – scope 15

Statement Statement
Statement(s) of Statement of
of financial of changes
financial performance cash flows
position in equity
Requiring additional Eliminating options
EBIT subtotal (interest/dividends)

Providing guidance on Aligning the operating No planned change –

presentation of section between the except possible
management operation statements of cash flows development of template
performance and and financial for primary financial
alternative EPS performance statements and greater
disaggregation
Better ways to Requiring a consistent
communicate OCI starting point for the
reconciliation

• Developing a template for primary financial statements

• Achieving greater disaggregation
Corporate reporting 16

Non-mandatory
Mandatory
IFRS Management
IFRS Standards
Commentary
Practice Statement
(MCPS)

Financial reporting Integrated reporting Sustainability reporting

Keep up to date 17

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