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CDSB (Climate Disclosure Standards Board) Image

Ready or not: Are companies prepared for the TCFD recommendations?

Mar 19, 2018

On March 19, 2018, the Climate Disclosure Standards Board (CDSB) and the Carbon Disclosure Project (CDP) released a report on research into 1,681 companies across 14 countries and 11 sectors that shows that there is a gap between the way companies identify climate-related risks and opportunities and how they are preparing to tackle them.

The vast majority of companies acknowledge that climate change poses financial risks for their business with 83% of companies recognizing the physical risks, and 88% identifying policy changes/new regulations as the main risks of transitioning to a low-carbon economy.

But when it comes to turning awareness into action, there is still a disconnect in many sectors and countries. For instance, more than 8 in 10 companies oversee climate change at the board level, but only 1 in 10 provides incentives for the management of climate change issues.

Review the press release and the report on the CDP's website.


2018 IFRS XBRL taxonomy issued

Mar 16, 2018

On March 16, 2018, the IFRS Foundation issued its 2018 IFRS® Taxonomy. The IFRS Taxonomy is a translation of IFRS Standards into XBRL (eXtensible Business Reporting Language).

The IFRS Taxonomy 2018 is consistent with IFRS Standards as issued by the International Accounting Standards Board (the Board) at January 1, 2018 and incorporates amendments made to the IFRS Taxonomy 2017 such as:

  1. Applying IFRS 9 Financial Instruments with IFRS 4, Insurance Contracts (Amendments to IFRS 4), issued in September 2016,
  2. IFRS 17, Insurance Contracts, issued in May 2017, and
  3. Prepayment Features with Negative Compensation (Amendments to IFRS 9), issued in October 2017.

The IFRS Foundation has also published the IFRS Taxonomy Update — Annual Improvements and the IFRS Taxonomy Update — Prepayments Features with Negative Compensation (Amendments to IFRS 9). The IFRS Taxonomy 2018 incorporates the changes resulting from these two updates.

Review the press release and the IFRS Taxonomy 2018 page on the Board's website.


The International Accounting Standards Board updates March "Investor Update" newsletter

Mar 16, 2018

On March 16, 2018, the International Accounting Standards Board (the Board) re-issued the fifteenth edition of its newsletter "Investor Update", which had been originally published on March 2.

The issue now features:

  • Spotlight — Timing and amount of revenue recognition (IFRS 15)
  • In Profile — Interview with Zhenyi Tang, CMAC member
  • Project updates
  • Information on investor materials and current events

Review the updated Investor Update newsletter on the Board’s website.

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Non-GAAP Measures: A Roadmap for Audit Committees

Mar 16, 2018

On March 16, 2018, the Center for Audit Quality (CAQ) released a new publication designed to help audit committees enhance their oversight of non-GAAP measures used by company management.

Presenting themes that emerged at a series of multi-stakeholder roundtables, Non-GAAP Measures: A Roadmap for Audit Committees provides a set of key considerations for audit committees, including leading practices to assess whether a company’s non-GAAP metrics present a balanced representation of the company’s performance. GAAP information serves as a foundation for confidence in financial statements, but financial statement users also value non-GAAP financial measures, when presented appropriately.

In addition to the roadmap, the CAQ released a companion video featuring interviews with audit committee chairs that provides additional context and real-life examples of how audit committees are thinking about and overseeing non-GAAP measures.

Among other recommendations, the CAQ suggests that the audit committee:

  • Put itself in the shoes of investors when evaluating if the non-GAAP measures and related disclosures presented align with the company’s overall strategy and performance.
  • Ask management whether it has an internal policy that provides guidelines for determining how non-GAAP measures are generated, calculated, and presented.
  • Discuss with management how the company makes changes to the non-GAAP measures it presents and the rationale for why it would or would not make changes.
  • Ask the company to compare or benchmark its non-GAAP measures to its peers.
  • Leverage external auditors as a resource when evaluating non-GAAP measures.

Review the publication on the CAQ's website.


Webinar on the presentation of amalgamations in IPSAS 40

Mar 15, 2018

On March 15, 2018, the International Public Sector Accounting Standards Board (IPSASB) released a video intended to help users understand the requirements regarding amalgamations in IPSAS 40, "Public Sector Combinations", which IPSASB released in February 2017. The Standard applies from January 1, 2019 with earlier adoption encouraged.

IPSAS 40 uses the modified pooling of interests method of accounting for amalgamations. Because this approach does not require comparative figures to be restated, the presentation requirements may be different from other versions of the pooling of interests method that entities have used previously.

View the short video (11 minutes) on the IPSASB's website.

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IFRS Foundation Trustees and Due Process Oversight Committee hold January 2018 meeting

Mar 14, 2018

The IFRS Foundation Trustees and the Due Process Oversight Committee (DPOC) met in Hong Kong on 30 January – 1 February 2018.

Meeting ac­tiv­i­ties included the following:

  • Executive session — The Trustees discussed a number of important strategic issues:
    • Trustee Corporate Governance Issues — The Trustees discussed issues related to governance and procedures.
    • Report of the Directors — The Trustees received a report which discussed highlights of the IFRS Foundation in the past three months.
    • Asia-Oceania Office Plan — The Trustees approved the Asia-Oceania’s 2018 work plan.
    • Analysis of Organisation expenditure — The Trustees received a report on total expenditure for 2017.
    • Trustee Meeting Locations — The Trustees agreed that Brussels will host the first meeting in 2019.
    • Committee reports — The Trustees discussed reports from the Audit and Finance Committee, the Education and Content Services Committee, the Human Capital Committee, the Nom­i­nat­ing Committee, and the DPOC.

      The DPOC session included an update on the International Accounting Standards Board's (the Board) technical activities as well as its due process actions. The DPOC also announced Ann Tarca will become Vice-Chair of the IFRS Taxonomy Consultative group. In addition, the DPOC approved a staff paper which outline the scope and timetable for the review of the Due Process Handbook.
  • IASB® Chairman’s report — The Chair of the IASB provided the Trustees with an update on the Board’s technical ac­tiv­i­ties, support for the implementation of IFRS 17, and the conceptual framework project.
  • Meetings in Hong Kong  The Trustees received a presentation by the Advisory Council chair. In addition, the Trustees met with the Asian-Oceanian Standard-Setters Group and had a stakeholders event.

The full report on the IFRS Foun­da­tion trustees’ and DPOC meeting is available on the Board’s website.

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Key audit matters: unlocking the secrets of the audit

Mar 13, 2018

On March 13, 2018, the Association of Chartered Certified Accountants (ACCA), a global body for professional accountants, released an article on what a difference a year makes, since the global implementation of the IAASB's changes to auditor reporting standards about a year ago.

In the article, they explain that in one year, they have seen that KAMs can go beyond the initial justification of useful information for investors. There are additional benefits:

  1. KAMs encourage better conversations between the auditor and those charged with governance; this in turn contributes to better governance
  2. KAMs help the auditor to focus on the areas of the audit requiring the most careful judgement; this in turn contributes to higher audit quality
  3. KAMs give preparers incentives to revisit financial reporting and disclosures in areas related to those KAMs; this in turn contributes to higher quality financial reporting. 

Review the full article on the ACCA's website.

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Experts Appointed to IAASB Project Advisory Panel

Mar 13, 2018

On March 13, 2018, the International Auditing and Assurance Standards Board (IAASB) Emerging Forms of External Reporting (EER) Task Force announced the appointment of 23 individuals to the recently-established EER Assurance Project Advisory Panel.

Among the new appointments is Charlotte Drain, a Director with over ten years’ experience of providing advisory and assurance services in the field of sustainability and has a specific focus on Integrated Reporting.

The Advisory Panel appointees will make a significant contribution to further IAASB’s work on EER assurance. Their involvement will include:

  • advising the EER Task Force on the application of ISAE 3000 (Revised) to EER engagements, and other matters within the scope of the approved Project Proposal, and providing insights into current practice across different jurisdictions and contexts;
  • providing input to the development of the non-authoritative guidance that the IAASB plans to issue; and
  • providing occasional research input on matters relating to EER assurance engagements.

Review the announcement on the IAASB's website.

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Use of financial accounting standards to meet TCFD recommendations

Mar 12, 2018

On March 12, 2018, the Climate Disclosure Standards Board (CDSB) published "Uncharted waters: How can companies use financial accounting standards to deliver on the TCFD’s recommendations?". The publication explores how companies can use existing international accounting standards when implementing the Task Force on Climate-related Financial Disclosures (TCFD) recommendations and comes out as the European Commission calls for the review of current IFRS to assess their potential impact on sustainable investment.

The paper summarizes the Task Force’s final recommendations on future-oriented climate-related financial disclosures, identifies financial accounting standards and other mainstream reporting materials that could aid companies in responding to various aspects of the TCFD recommendations, and considers what more needs to be done and how to align the TCFD core elements and recommended disclosures with existing financial accounting standards and materials.

The paper focuses on IFRS 7, IFRS 9, IFRS 15, IFRS 17 and IAS 36 and IAS 37, exploring some of the main points applied to traditional financial instruments and how they could potentially help organisations disclose climate-related risks and opportunities within their mainstream reports.

Review the press release and the full report on the CDSB's website.

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Insights into integrated reporting 2.0: walking the talk

Mar 09, 2018

On March 9, 2018, the Association of Chartered Certified Accountants (ACCA) published this report providing its latest assessment of integrated reporting. The report is a follow up to the 2017 report Insights into Integrated Reporting – Challenges and best practice responses.

Striking progress has been made, particularly in relation to the quality of the data. Reports were found to be more consistent: this was one of the lowest-rated areas in last year's review project, but became one of the strongest this year.

There are also signs of a focus on conciseness. The length of reports has reduced: just under half (49%) of reports reviewed contain 100 pages or fewer (compared with 20% last year) excluding the financial statements.

Review the press release and report on the ACCA's website.

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