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IFRS Foundation trustees seeks IASB Board members from Asia-Oceania

28 Mar 2024

The IFRS Foundation trustees are currently seeking nominations for two vacancies in the IASB’s Board from Asia-Oceania. The Board is comprised of 14 members containing a mix of experience in standard-setting, financial reporting, and education.

The new members will initially serve a five-year term with the pos­si­bil­ity of being renewed for another three years. Nom­i­na­tions for IASB board mem­ber­ship close on 31 May 2024. For more in­for­ma­tion, see the press release on the IASB’s Web site.

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IFRS Foundation seeks Trustee applications

28 Mar 2024

The IFRS Foundation is seeking Trustees from Africa, two from Asia-Oceania, and one from any part of the world ('at large') for terms beginning on 1 January 2025.

Trustees’ re­spon­si­bil­i­ties include oversight of the organisation in the public interest, its strategic direction, ap­point­ments to the IASB, the ISSB, the IFRS In­ter­pre­ta­tions Committee and the IFRS Advisory Council, and ensuring the financing of the organisation and approving its budget. Trustees are expected to engage with the markets in their regional ju­ris­dic­tion.

Please click for ad­di­tional in­for­ma­tion in the press release on the IFRS Foun­da­tion website.

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IASB proposes addendum to the exposure draft of the third edition of the IFRS for SMEs

28 Mar 2024

The International Accounting Standards Board (IASB) has published an exposure draft IASB/ED/2024/2 'Addendum to the Exposure Draft 'Third edition of the 'IFRS for SMEs' Accounting Standard''. Comments are requested by 31 July 2024.

 

Background

In September 2022, the International Accounting Standards Board (IASB) published the exposure draft of a third edition of the IFRS for SMEs accounting standard. For this exposure draft, the IASB had considered alignment with full IFRS Accounting Standards that are effective on or before 1 January 2020. Nevertheless, during the redeliberation of the proposals in the exposure draft, the IASB also looked at all amendments to full IFRSs with an effective date after 1 January 2020 to see whether any of these would warrant inclusion in the final amendments.

At its meeting in October 2023, the IASB decided to include the amendments to full IFRSs for supplier finance arrangements and lack of exchangeability. As these amendments had not been part of the original exposure draft and as the IASB wanted the public to be able to comment on these amendments before including them in the third edition of the IFRS for SMEs, the IASB decided to develop an addendum to the original exposure draft that would be exposed for public comment prior to finalising the amendments.

 

Suggested changes

The proposed amendments in exposure draft IASB/ED/2024/2 Addendum to the Exposure Draft 'Third edition of the IFRS for SMEs Accounting Standard' are:

Alignment with IAS 7 as amended by Supplier Finance Arrangements

The IASB proposes that an SME would disclose the following information about its supplier finance arrangements:

  • the terms and conditions - aggregated, but with separate disclosure of the terms and conditions of supplier finance arrangements that are dissimilar;
  • at the beginning and end of the reporting period for reportable supplier finance arrangements:
    • the carrying amounts of the financial liabilities and where they are included in the statement of financial position,
    • the carrying amounts of the financial liabilities for which suppliers have already received payment from the finance providers; and
    • the range of payment due dates of the financial liabilities compared to trade payables that are not part of a supplier finance arrangement; and
  • the type and effect of non-cash changes in the carrying amounts of the financial liabilities.

Alignment with with IAS 21 as amended by Lack of Exchangeability

The IASB proposes to amend the IFRS for SMEs:

  • to specify when a currency is exchangeable into another currency;
  • to set out the factors an SME would need to consider when assessing whether a currency is exchangeable and to specify how those factors affect the assessment;
  • to specify how an SME determines the spot exchange rate when a currency is not exchangeable into another currency; and
  • to require an SME to disclose information that would enable users of its financial statements to understand the effects of a lack of exchangeability.

    Comments on the proposed changes are requested by 31 July 2024.

     

    Effective date

    The IASB proposes that the amendments have the same effective date as the other amendments to the IFRS for SMEs. 

       

      Additional information

      Please click for:

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      GRI publishes guidance documents on double materiality, due diligence and CSRD

      28 Mar 2024

      The Global Reporting Initiative (GRI) has published three new documents titled 'Guides for Policy Makers'. The guides cover double materiality, due diligence and the Corporate Sustainability Reporting Directive (CSRD).

      The titles of the guides are as follows:

      • Double materiality. The guiding principle for sustainability reporting, covering the interconnectedness of an entity's impacts on society and the environment with its financial performance.
      • Due diligence. Can managing adverse impacts be simplified?, discussing how a business prevents, mitigates and accounts for its impacts.
      • CSRD. Implications for companies outside the EU, setting out the benefits for policymakers in harmonising their sustainability disclosure regulations with the EU.

      Please click to access the guides via the press release on the GRI website.

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      2024 IFRS Accounting Taxonomy issued

      27 Mar 2024

      The IFRS Foundation has issued its 2024 IFRS Accounting Taxonomy. The IFRS Taxonomy enables electronic reporting of financial information prepared in accordance with IFRS Accounting Standards.

      The 2024 IFRS Accounting Taxonomy is con­sis­tent with IFRSs as issued by the IASB at 1 January 2024, including those issued but not yet effective. The 2024 IFRS Taxonomy also in­cor­po­rates the changes made to the IFRS Taxonomy in 2023 re­flect­ing amended IFRSs and common reporting practice by companies that apply IFRS Accounting Standards as well as general taxonomy im­prove­ments.

      For more in­for­ma­tion, see the press release and the 2024 IFRS Accounting Taxonomy page on the IFRS Foun­da­tion website.

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      IASB publishes "Investor Perspectives" article on acquisitions reporting

      27 Mar 2024

      The IASB has issued the latest issue of 'Investor Perspectives'. In this edition, IASB Board member Zach Gast discusses proposed enhancements to acquisitions reporting and the revisions in Exposure Draft (ED) ‘Business Combinations — Disclosures, Goodwill and Impairment’ that aim to equip investors with better tools for evaluating companies’ acquisitions.

      The IASB is presently soliciting feedback on proposed amendments to IFRS 3 Business Combinations. These amendments would necessitate companies to divulge the objective and associated performance targets of their most significant acquisitions, along with whether these targets are achieved in subsequent years. Further, companies would be mandated to furnish details regarding anticipated synergies for all substantial acquisitions. Nevertheless, the proposals ensure that companies need not disclose information that could jeopardize their acquisition objectives. Additionally, the IASB suggests complementary adjustments to IAS 36 Impairment of Assets to refine the impairment test. Interested parties have until 15 July 2024 to provide their comments on the ED.

      For more in­for­ma­tion, see the press release and Investor Per­spec­tives article on the IFRS Foun­da­tion’s website.

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      ESMA publishes report on the activities of corporate reporting enforcers and their findings within the EU in 2023

      27 Mar 2024

      The report provides an overview of the activities of the European Securities and Markets Authority (ESMA) and the corporate reporting enforcers in the European Union (EU) when examining compliance of financial and non-financial information provided by issuers listed on regulated markets with the applicable financial reporting framework in 2023.

      European enforcers examined the financial statements of 703 issuers representing an average examination rate of 17% of all IFRS issuers with securities listed on regulated markets. These examinations resulted in 250 actions taken to address material departures from IFRS. As in the past, most infringements were identified in the areas of accounting for financial instruments, impairment of non-financial assets, presentation of financial statements and revenue recognition.

      Enforcers also assessed the non-financial information for 389 issuers, covering approximately 17% of the total estimated number of issuers required to publish a non-financial statement, resulting in 91 enforcement measures.

      The report also looks at ESEF reporting as for financial years beginning on or after 1 January 2021, issuers must prepare their annual financial reports according to XHTML requirements and mark-up those IFRS consolidated financial statements contained therein according to iXBRL requirements.

      Please click to access the full report on the ESMA website.

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      Hong Kong commits to aligning local sustainability disclosure requirements with the ISSB standards

      27 Mar 2024

      The Hong Kong Financial Services and Treasury Bureau (FSTB) has set out a vision and approach of the Government and financial regulators for developing a sustainability disclosure ecosystem in Hong Kong. In the statement, the FSTB commits to aligning the local sustainability disclosure requirements with the ISSB standards.

      The vision statement follows a public commitment from the Hong Kong Government in October 2023 to develop a roadmap for the adoption of the ISSB standards. In the vision statement, the FSTB proposes a holistic approach in developing the Hong Kong sustainability disclosure standards, including the following key features:

      • Coverage of all financial services sub-sectors
      • Phased implementation
      • Sustainability assurance to enable credible implementation
      • Capacity building to support the industry and companies
      • Use of technological solutions, including a Climate and environmental risk questionnaire for non-listed companies and small and medium enterprises and Greenhouse gas emissions calculation and estimation tools

      The roadmap is expected in 2024 and will be prepared by a dedicated working group. Assuming the role of the sustainability reporting standard-setter, the Hong Kong Institute of Certified Public Accountants (HKICPA) will develop the standards as well as complementary application and implementation guidance. In a statement on its website, the HKICPA welcomed the FSTB vision statement.

      The vision statement is available on the Hong Kong Government website.

       

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      IASB issues podcast on latest Board developments (March 2024)

      27 Mar 2024

      The IASB has released a podcast hosted by Executive Technical Director Nili Shah featuring IASB Chair Andreas Barckow and IASB Vice-Chair Linda Mezon-Hutter discussing the deliberations at the March 2024 IASB meeting.

      The podcast highlights some of the projects that were discussed during the meeting, including:

      • climate-related and other uncertainties in the financial statements;
      • management commentary; and
      • power purchase agreements.

          The podcast can be accessed here on the IFRS Foundation website.

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          March 2024 IASB meeting notes posted

          26 Mar 2024

          The IASB met in London on 18-21 March 2024. We have posted our comprehensive Deloitte observer notes for all projects discussed during the meeting.

          Board work plan update: The staff provided an overview of the work plan. In particular, the staff presented completed projects, new projects, expected consultation documents and expected project completions.

          Post-implementation review (PIR) of IFRS 9—Impairment: The IASB deliberated the feedback received in response to its request for information Post-implementation Review—IFRS 9 Financial Instruments—Impairment. The IASB decided not to take any further action on the matters raised by respondents regarding the use of forward-looking scenarios and post-model adjustments or management overlays in measuring expected credit losses.

          Power purchase agreements: The IASB decided to propose amendments to the own-use requirements and to the hedge accounting requirements in IFRS 9. The IASB also decided to propose a scope for the amendments, as well as disclosure and transition requirements. The IASB gave permission to the staff to begin the balloting process for the exposure draft, which will have a shortened comment period of 90 days.

          Second comprehensive review of the IFRS for SMEs standard: The IASB continued the redeliberations of its proposals in the exposure draft (ED) Third edition of the IFRS for SMEs Accounting Standard. In particular, the IASB decided to finalise the proposed amendments to Section 23 Revenue from Contracts with Customers and Section 2 Concepts and Pervasive Principles with some modifications. The IASB also made decisions with regard to other minor issues that were raised by respondents to the ED.

          Climate-related and other uncertainties in the financial statements: The staff explained the approach it has taken to develop examples illustrating how to apply requirements in IFRS Accounting Standards to report the effects of climate-related and other uncertainties in financial statements.

          Maintenance and consistent application: The IASB decided that some of the disclosure requirements in the forthcoming exposure draft (ED) Use of a Hyperinflationary Presentation Currency by a Non-hyperinflationary Entity should also apply to subsidiaries without public accountability. The IASB gave permission to ballot the ED.

          PIR of IFRS 15 Revenue from Contracts with Customers: The IASB decided that no further action should be taken with regard to determining the transaction price, determining when to recognise revenue and disclosure requirements of IFRS 15.

          Equity method: The IASB reconfirmed its tentative decisions regarding transitional requirements for the proposed amendments to IAS 28 and gave permission to start the balloting process for the exposure draft.

          Management commentary: The IASB discussed the direction of the management commentary project. The staff had identified the following four broad alternative directions that the IASB could take: finalise the project; retire the project; undertake a broader project; and keep the project on hold. IASB members had mixed views on the alternatives but were not asked to make a decision. The alternatives will be discussed at a future meeting.

          Catch-up exposure draft of the forthcoming IFRS 19 Subsidiaries without Public Accountability: Disclosures: The IASB decided which disclosure requirements from the forthcoming IFRS 18 Presentation and Disclosure in Financial Statements to propose in the “catch-up exposure draft” following the publication of IFRS 19.

          Rate-regulated activities: The IASB continued to redeliberate the proposals in the exposure draft Regulatory Assets and Regulatory Liabilities. In particular, the IASB made decisions on the discount rate and reduced disclosure requirements.

          Please click to access the detailed notes taken by Deloitte observers for the entire meeting.

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