Some of the new standards include:
• IFRS 10: Consolidated Financial Statements, requires companies to re-evaluate their control models to determine which business units must be consolidated under the new single
model approach. The new standard requires a broader understanding of circumstances in assessing control such that previously disregarded facts could become relevant.
• IFRS 11: Joint Arrangements,
introduced new rules around joint control and has prompted companies to reassess all their joint arrangements to determine if they need to transition from a proportionate-consolidation model to the equity method of accounting. The new standard can be challenging to apply, with a multi- step analysis and many factors to potentially consider when assessing the implications of contractual terms of the arrangement.
• IFRS 12: Disclosure of Interests in Other Entities, requires more onerous disclosures, not just for subsidiaries and joint ventures, but also for other interest and relationships, which previously would not have been considered under IFRS.
•IFRS 13: Fair Value Measurements, provides companies a single source of guidance on how fair value is measured, for both their financial and non-financial assets and liabilities. Fair value is defined and a framework for measuring fair value is included in the standard. For financial instruments, fair value disclosures required in annual financial statements now also apply to interim financial reports.
• IAS 19R: Employee Benefits, includes certain revisions to accounting for defined benefit pension and other post-employment benefit plans, which may have a significant impact on companies’ balance sheets and statements of income and comprehensive income. Upon adoption of this revised standard, companies will also need to reconsider the classification of its employee benefits as short-term or long- term, as well as the timing of recognition of terminations benefits.
• IAS 1: Presentation of Items of Other Comprehensive Income, requires companies to present separately the items of other comprehensive income that will be reclassified to profit and loss in the future from those that will not be reclassified.
• IFRS 7: Disclosure: Offsetting Financial Assets and Financial Liabilities, requires companies to include new disclosure over financial assets and liabilities that are offset on the balance sheet.
In addition to these effective standards, the International Accounting Standards Board is currently working through new standards on Financial Instruments, Leases and Revenue, which are expected to have significant implications on a company’s processes, systems and financial statements.
This second wave of IFRS is expected to cause pervasive changes to the lottery and gaming organizations, so get ready for another transition to IFRS.
Silvia Montefiore (email@example.com) is National Leader for KPMG’s Gaming practice and Technology, Media & Telecommunications – Audit Practice Leader. Lesley Luk (lluk@kpmg. ca) is Senior Manager in KPMG’s Technology, Media and Telecommunications Audit practice.