News on IFRS: August 2016

Our latest IFRS News provides perspectives on key considerations for impairment tests, current IC rejections and the PwC leases lab.

Tax accounting and the research agenda– all quiet on the western front?

The IASB discussed the research project on income taxes and decided to delete it from the work plan. Anna Schweizer from Accounting Consulting Services looks into the finer details of the issues around IAS 12 Income Taxes, which news we can expect in the near future and which not.

Read more…

Variable payments for the separate acquisition of PPE and intangible assets

The IC declined to address the accounting in such cases. The current diverse practice is expected to continue. This article looks at the impact and provides an insight into the issue.

Read more…

Impact of a decommissioning liability in determining the recoverable amount of a CGU

The IC declined to address this accounting issue for impairment tests under the fair value less costs of disposal approach. This article looks at the impact and provides an insight into the issue.

Read more…

Current IC rejections

The IC was asked to clarify if cash received from the government to perform R&D should be recorded as a government grant or a forgivable loan.

The fact pattern submitted was:

  • Government gives cash to an entity to perform research.
  • The cash is repayable if the entity decides to exploit and commercialise the results of the R&D.
  • The IP is transferred to the government if the entity decides to abandon the project.

Read more…

Difficulties in translating IFRS

IFRS has greatly contributed to bringing transparency, comparability, and efficiency to financial markets. However, as the guidance is written in English, the risk of incorrect translation is likely (or is it probable?). Sam King-Jayawardana explores the current research

Read more…

Cannon Street Press

  • Applying IFRS 9 Financial Instruments with IFRS 4 Insurance contracts
  • IAS 40 Investment property: Transfers of investment property
  • Annual Improvements 2014-2016 cycle
  • Conceptual Framework

Read more…

The PwC leases lab

IFRS 16 will have significant impact on the Communications industry, including how contracts are entered into and Key Performance Indicators (KPIs) in financial statements.

Read more…

IFRIC Rejections in short – IAS 23

IAS 23 covers recognition, measurement, and disclosure of borrowing costs. The IC has rejected two matters related to IAS 23 over the last decade.

Read more…

In brief – A look at current financial reporting issues

  • Accounting for government loans to fund research and development: PwC In brief INT2016-14
    Read more…
  • Variable payments for the separate acquisition of PPE and intangible assets: PwC In brief INT2016-15

PwC’s Sports Survey 2016

As the sports industry continues to navigate choppy waters, its ongoing growth is becoming increasingly dependent on its ability to adapt to the global megatrends that are shaping business decisions around the world.

In order to gauge the mood among leading international sports federation executives, we conducted a survey that assesses the extent to which demographic and social change, shifts in global economic power and technological advances are affecting decision-making in the sports industry.

The key findings of the survey include the fact that leading sports executives remain largely optimistic in the face of the many threats faced by the sports industry, are increasingly investing in digital solutions, and see the Asia Pacific region as the industry’s priority growth area.

CaptureSportFor more information, the full set of findings of the survey and the insights that we were able to derive from them are summarized and accessible in our report, entitled PwC’s Sports Survey 2016.

Swiss Asset Managers of UCTIS (Undertakings for Collective Investment in Transferable Securities) are affected by the UCITS V Directive

UCITS V Richtlinie_EN.JPGThe UCITS Directives III to V have successively replaced the first Directive
85/611/EEC of the Council of 20 December 1985 on the coordination of
laws, regulations and administrative provisions relating to undertakings
for collective investment in transferable securities, so as to take account of
developments in the financial markets and the previous experience of market
participants and supervisory authorities.

The reforms contained in the UCITS Directive V (“UCITS V Directive” or
“Directive”) concern depositories, remuneration policies, new sanction
regulations which include higher sanction and reputation risks, and the
delegation rules of depositories.

More information here!


On Passion and Robots

My overall ambition is to help people and organizations to reach their full potential. I believe that technology is an important aspect for that and I am passionate about security and privacy and how they play a crucial role in determining if and how we can take advantage of the seemingly endless potential of technology. But I also ask myself what the consequences of this technology is. It is visible already today that in the close future we will face a massive change in society. Entire job categories will disappear and robots (mostly software based) will take over many of today’s jobs. Take the transportation industry for example. While Tesla’s “autopilot” clearly still has it’s challenges in a couple of years cars, trucks and buses will be able to drive autonomous. What happens then to all the cab and truck drivers that are on our streets on a daily basis? And that is only the beginning. More and more sophisticated tasks will be done by Artificial Intelligence AI.

What does that mean for people that are studying or thinking about what kind of job should be in their future or where they should develop professionally? Is it physics, chemistry, sport or rather social studies or… How does one choose today a field so that chances are good that robots aren’t replacing you shortly out of university? It is an important subject as not everything that technology will bring will be good for everybody. The answer to this question is not easy as our understanding today is very limited what impact AI robots will have on our lives. But some aspects are in my view clearer than others and might be a start.

The first point where we can differentiate us from bots are morals, values and ethics. Our personalities can make a difference and I see that as a clear advantage over machines or for that matter towards other people as we will not just be competing against bots but against a relatively larger workforce for fewer jobs. While we can program behavior rules I don’t believe (or maybe hope) that we will achieve developing a moral artificial intelligence.

Second, what differentiates us are emotions. To be able and willing to show and feel passion and feeling for other people. Think about it as mentally or physically giving somebody a hug. Not everything happens at an intellectual level and looking ahead I believe that compassion will become again more important. Especially as in many places it seemed to have gotten lost.

The third element is creativity. Bots already today write short stories but creativity is something that I believe (or again maybe hope) is beyond programming. Be able to tell a story will be something that stays human still for a long time.

The fourth aspect is to solve new and hard challenges. I don’t believe that robots will be able to solve the really hard questions in the foreseeable future. To systematically and more important intuitively draw conclusions, to listen to a feeling/intuition and follow it up to find the solution to a hard problem. To have a dream and suddenly things fall into place in a way that one has not foreseen. To run through a massive amount of permutations is what computers do best but to see connections that are not clearly visible and be courageous to try out and find new paths is where humans shine.

And the final thought but maybe the most important is passion in what you do and to challenge, enable and inspire others. If you truly want to make a difference then finding out what you do with a passion is the best way to show that you are making a difference. There are the people that are lucky to already know from very early on where their passion is and what they want to do and then there are the majority where it takes longer to find out. Too many though give up in that process and focus on doing what gets them through the day. But will that be enough in the future? I fear not. And with inspiring and enabling others brings the possibility to act as a multiplier for all aspects above and with that truly solve the important problems together.

So if you make a choice in what to do and in what direction to evolve wherever you are in your career stage – take into account the rapidly changing technology and that robots are advancing. Focus on the things that are hard and that not everybody can do, be passionate about it and don’t forget about empathy and caring about people. Then I am convinced that you are successful also in a world where robots are everywhere.

If you have any questions or you wanna know more, please do not hesitate to contact me.

SAP GRC Access Control upgrade & migration service


What is it about?

SAP GRC Access Control 5.3 is built on a technology which does not allow extensive customising. But this is possible again with versions 10.0 and 10.1. This means that we will adapt your SAP GRC Access Control System to your needs and requirements. It’s also important to realise that new functionality such as improved firefighting, reporting and user interfaces, and the integration of new technology such as Hana or Fiori, is only provided with the latest version (10.1).
Given that version 5.3 is based on a different technology than versions 10.0 and 10.1, a migration path is required. If you plan to move from version 10.0 to 10.1, only an upgrade is required. SAP provides standard tools supporting the migration. Nevertheless, further accelerators and a proven methodology are required for ensuring data consistent and auditability / traceability.

What you get from our service

The latest release provides a wide range of new functionalities and improvements, which PwC and Xiting will combine and adapt to your organisation’s requirements. What you can expect:

service SAP GRC

Read more here.

Our approach

Our approach is tailored to your needs and split into four phases, from assess & design to operate & support. We will implement the functionalities you have already been using in addition to new functionalities as defined in the business blueprint. You’ll enjoy a smooth transition to a new system tailored to your needs.

approach SAP GRC

Read more here.

Your journey with us

Upgrading your SAP Access Control system will not only give you immediate benefits now, but will prepare you for your future journey as well.
The upgrade path will enable you with the opportunity to extend the limits and functionality of your current SAP Access Control solution. The upgrade ensure integration with new SAP solutions like Fiori and Hana for a more intuitive interface and reporting capabilities and also utilizing extended functionality available only to the solution version 10.1.
PwC and Xiting would be glad to accompany you on your journey. Thanks to our extensive network, you’ll always be up to date on the latest trends and best practices.

Chain Reaction: How Blockchain Technology might transform wholesale insurance

Blockchain technology (Mutual distributed ledger) has the potential to be applied to a range of business processes that involve multiple parties exchanging data, with the ability to create a shared common view of data and automate inefficient business processes. And PwC has been investing heavily in building up our blockchain capability, creating Blockchain Delivery Lab in Belfast and announced strategic partnerships with Blockstream, Eris Industries and Digital Asset Holdings.

The new research conducted by Z/Yen and sponsored by PwC, is based on 50+ interviews with brokers, insurers, reinsurers, regulators and trade bodies from across the global wholesale insurance market. The findings highlight enthusiasm within the wholesale insurance industry to work together and implement blockchain solutions, and are complimented by a technical Proof of Concept developed by the PwC Blockchain Team in Belfast illustrating how blockchain technology can be applied to solve business problems.


Full information available here.

Customers in the spotlight – How FinTech is reshaping banking

Consumer banking is on the verge of disruption, much of which is led by the disaggregation of simple products and service offerings.

The majority of financial sector executives believe consumer banking is the sector most likely to be disrupted by FinTechs. As much as 76% of banking respondents fear some part of their business is at risk Nevertheless, just over half of the banks consider themselves to be customer-centric, while as much as four in five FinTechs believe they deliver customer-centric service and offerings. This might be one of the reasons why 42% of banks, the most of all financial sectors, engage in joint partnerships with FinTech companies new entrants pick off segments of the banking sector and develop narrowly defined, but highly effective solutions to manage customer expectations. Competition between banks and new entrants may give way to direct cooperation across the FinTech ecosystem. Opportunities exist for partnership and cooperation that would leverage each other’s strengths, whether in product design and development by the start-ups, or distribution and infrastructure capabilities by banks. However, several major impediments inhibiting business relations between banks and FinTechs remain. We see both sides coming to the realisation of a new, mutually beneficial relationship that is possible, but it is still early in execution.Global fin tech survey_2016


Full survey available here.


Tax Ticker: Implementation of BEPS minimum standards in Liechtenstein

flaga-liechtensteinu-70-x-110-cmOn 3 May 2016 the government of the Principality of Liechtenstein published a consultation report on the amendment of the tax law. The proposed changes are expected to enter into force as of 1 January 2017.

With the changes Liechtenstein intends to implement the minimum standards by the OECD and G20 on Base Erosion and Profit Shifting (BEPS). The proposed changes include measures to avoid double non-taxation (Action 2), measures to avoid harmful tax practices, including the exchange of tax rulings (Action 5) and measures to improve tax transparency through the introduction of a mandatory transfer pricing documentation (Action 13).

Additional minimum standards such as Country-by-Country reporting (also Action 13) and the introduction of anti-abuse measures in double tax treaties (Action 6) shall be implemented in autumn 2016 in a separate law and the revision of double tax treaties, respectively.

Please read below how the proposed changes may affect our clients:

Introduction of the correspondence principle for dividends to avoid double non-taxation (Action 2)

Dividend income from domestic and foreign participations in corporations as well as capital gains on such participations are generally tax exempt in Liechtenstein. Under certain conditions, also income received from indirect participations in corporations (i.e. fund investments and investments in partnerships) may be tax exempt.
With the proposed changes, investors in Liechtenstein (shareholders or beneficiaries) shall only benefit from the participation exemption on dividend income if the payment is not tax deductible in the source country.
The introduction of the correspondence principle leads to a number of implementation issues for our clients (e.g. burden of proof regarding taxation in source country) that are currently discussed in the consultation process.

Abolishment of IP-box regime (Action 5)

In 2011 Liechtenstein introduced an IP-box regime in connection with the complete revision of its tax law. The current IP-box regime does not comply with the modified nexus approach by the OECD. Therefore, the Liechtenstein government decided to abolish the current IP-box regime with a phasing-out period of 4 years (i.e. until end of tax period 2020).
Whether a new (BEPS-compliant) IP-box regime shall be introduced subsequently is subject to further analysis by the government and not yet clear.

Spontaneous exchange of tax rulings (Action 5)

The draft legislation introduces the definition of the term “tax rulings” and describes the process of obtaining and the effect of a tax ruling.
The legal basis for the exchange of tax rulings will be article 7 of the Convention on Mutual Administrative Assistance in Tax Matters (MAC) which is currently subject to the national ratification procedure in Liechtenstein. The exchange of the tax rulings as such shall be regulated in the Act on International Administrative Assistance in Tax Matters or a separate law. Based on the current state of knowledge, we understand that the following categories of tax rulings may be exchanged:

  • Rulings related to preferential tax regimes;
  • Unilateral advance pricing agreements or other unilateral cross-border rulings in respect of transfer pricing;
  • Cross-border rulings providing for a downward adjustment of taxable profits;
  • PE (permanent establishments) rulings;
  • Related party conduit rulings;
  • Any other type of ruling agreed by the Forum on Harmful tax practices giving rise to BEPS concerns.

The consultation report does not specify whether tax rulings issued on or after 1 January 2010 that were still in force at 1 January 2014 will be subject to the ruling exchange (as foreseen in the OECD Report on Action 5). Practical questions affecting our clients are currently discussed in the consultation process (e.g. based on which criteria Liechtenstein will judge whether a tax ruling is still in force).

Mandatory transfer pricing documentation (Action 13)

Until now companies in Liechtenstein were not obliged to prepare a transfer pricing documentation. Based on the draft legislation, in future all companies will be obliged to provide upon request by the tax authority (i.e. no periodical filing) documentation regarding the adequacy of transfer prices of transactions with related companies or permanent establishments.
Large companies have to prepare the transfer pricing documentation based on an internationally accepted standard. If a company exceeds the following three criteria, it qualifies as a large company (based on Liechtenstein company law):

  • Total assets CHF 25.9 Mio.
  • Net revenue CHF 51.8 Mio. and
  • Annual average of 250 full time employees.

Other Amendments

The draft legislation also contains other changes that are not linked to the implementation of BEPS. In particular, compensations paid to foreign corporations in accordance with their role as a member of the board of directors or management of a Liechtenstein entity shall be subject to withholding tax (i.e. foreign corporations will be subject to limited tax liability in Liechtenstein).

Draft consulation report

Click here to see the draft consultation report.

If you have any questions, please contact me.

Revidiertes Firmenrecht – Besteht Handlungsbedarf für Sie?

Am 1. Juli 2016 Legalist in der Schweiz das revidierte Firmenrecht in Kraft getreten, welches zu Anpassungen im Obligationenrecht (OR), im Kollektivanlagegesetz (KAG) und in der Handelsregisterverordnung (HRegV) führt. Mit dieser Änderung findet eine Vereinheitlichung des Firmenrechts aller Personengesellschaften, der Genossenschaft, der Kommanditaktiengesellschaft, der Aktien-gesellschaft und der Gesellschaft mit beschränkter Haftung statt.

Welcher Handlungsbedarf durch das revidierte Firmenrecht entsteht, entnehmen Sie unserem Newsletter.

Falls Sie Fragen haben, kontaktieren Sie bitte Ihre übliche Ansprechperson bei PwC oder einen der nachstehenden Experten im Bereich Firmenrecht von der Rechtsberatung PwC Schweiz.


Lukas Bühlmann
lic. iur. HSG, LL.M., Rechtsanwalt
+41 58 792 72 83
Annina Wirth
Dr. iur. HSG, Rechtsanwältin
+41 58 792 19 83

News on IFRS: July 2016

Our latest IFRS News provides perspectives on key considerations for impairment tests, current IC rejections and the PwC leases lab.

Alternative Performance Measures – Under scrutiny by regulators

Companies using Alternative Performance Measures (APMs) should understand the new guidance issued by the European Securities and Markets Authority (ESMA) and the International Organization of Securities Commissions (IOSCO) as well as applicable amendments to IAS 1. Annette Malsch from Accounting Consulting Services summarises the dos and don’ts and adds some practical examples.

Read more…

What is a business?

The IASB has proposed clarifications to the definition of a business in IFRS 3 Business Combinations.

The definition of a business affects the accounting not only for acquisitions but also for disposals, consolidation and other areas.

  • Why change the existing requirements?
  • What is going to change?
  • Why is this important?
  • What’s next?

Read more…

Ten reminders for interim reporting

The interim reporting season has arrived for many. Saad Siddique from Accounting Consulting Services summarises the key items to consider for 2016 interim financial statements.

Read more…

Amendments to IFRS 2

The IASB issued amendments to IFRS 2 on 20 June 2016. The amendments provide additional guidance on the accounting for cash-settled share-based payments and add an exception that provides equity-settled accounting where the settlement of share-based payment awards is split between equity instruments issued to the employee and a cash payment to the tax authorities.

Read more…

Cannon Street Press

  • Insurance contracts
  • Previously held interests
  • IAS 12 Income Taxes: Presentation of income tax consequences arising from dividends
  • Conceptual Framework

Read more…

The PwC leases lab

For lessees, IFRS 16 is just an accounting change; it will not require major changes to systems or processes.

Read more…

IFRIC Rejections in short – IAS 21

IAS 21 is applied on the accounting for foreign currency transactions, on the conversion of profit and loss and financial position of foreign businesses and the conversion of the entity’s profit and loss and financial position to presentation currency.

Read more…

In brief – A look at current financial reporting issues

  • Impact of UK referendum result on financial reports: PwC In brief INT2016-12
    Read more…
  • IASB issues amendment to IFRS 2: PwC In brief INT2016-11
  • GPPC paper on IFRS 9 impairment considerations for systemically important banks: PwC In brief INT2016-10