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IVSC releases sixth perspective paper on tangible assets

Jun 12, 2024

On June 12, 2024, the International Valuation Standards Council (IVSC) published its sixth perspective focusing on the inspection of tangible assets in the valuation process.

The paper explores valuation inspections and considers the benefits and challenges associated with various types of inspections, including traditional physical inspections and technology-based virtual assessments. It is intended to support the valuation community by offering insights and practical guidance on navigating the complexities of asset inspections, thereby ensuring the reliability and accuracy of valuations.

 The series on perspectives papers is now as follows:

  • Deciphering Technology (July 2023)
  • Data and Valuation (March 2024)
  • Inspection of Tangible Assets (June 2024)

Access the press release on the IVSC’s website.


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XBRL Releases Insights on Enhancing Narrative Disclosure Analysis with GPT-4

Jun 06, 2024

On June 6, 2024, XBRL released insights on how the integration of GPT-4 technology can revolutionize narrative disclosure analysis, providing deeper and more accessible insights into corporate financial communications.

The blog post discusses integrating GPT-4 with XBRL data to enhance narrative disclosure analysis, particularly in areas like sustainability disclosures and accounting policies. It highlights how machine learning and generative AI can simplify the interpretation of complex narrative data without requiring extensive coding knowledge.

The author provides examples of how GPT-4 can detect changes in accounting policies and calculate TF-IDF scores (Term Frequency-Inverse Document Frequency, a measure of importance of a word to a document) for thematic analysis in going concern disclosures. This capability allows analysts to derive insights more efficiently and with greater depth, making it easier to compare, spot patterns, and potentially uncover issues such as greenwashing in corporate reports.

Access the blog on the XBRL’s website.

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IMF Managing Director Delivers Speech on Future Financial Stability Challenges

Jun 06, 2024

On June 6, 2024, the International Monetary Fund (IMF) Managing Director, Kristalina Georgieva, addressed the 23rd annual conference on policy challenges for the financial sector, jointly organized by the IMF, the U.S. Federal Reserve, and the World Bank.

In her address, the Managing Director emphasized the crucial role of international regulatory and supervisory communities in maintaining economic stability and growth. She underscores the dynamic pace of change driven by technological advancements like blockchain, crypto, and AI, which challenge traditional financial systems and bring opportunities and risks.

The Managing Director highlighted AI's transformative potential in enhancing productivity and economic progress and pointed to significant risks, such as cybersecurity threats and the potential for systemic instabilities. She advocates for a vigilant approach to managing these emerging risks through improved diagnostics, strengthened regulation, and robust crisis management, stressing the importance of international cooperation in navigating the future financial landscape.

Access the speech on the IMF’s website.


EFRAG finalizes implementation guidance for ESRS

Jun 03, 2024

On June 3, 2024, the European Financial Reporting Advisory Group (EFRAG) published three final implementation guidance documents on European Sustainability Reporting Standards (ESRS): EFRAG IG 1 “Materiality Assessment,” EFRAG IG 2 “Value Chain” and EFRAG IG 3 “ESRS Datapoints.”

IG 1 Materiality Assessment Implementation Guidance provides an illustrative materiality assessment process for entities and develops the concept of impact and financial materiality on examples, including how these concepts interact. It also contains FAQs on the double materiality assessment to provide practical implementation guidance on disclosing material impacts, risks and opportunities.

IG 2 Value Chain Implementation Guidance outlines the reporting requirements for value chain information, including the materiality assessment, policies and actions, and metrics and targets. It illustrates the reporting boundary for a group for sustainability reporting, including operational control in environmental standards. The IG also includes FAQs for further information and a 'value chain map' summarising the implications for each disclosure requirement across all ESRS.

IG 3 List of ESRS Datapoints includes all requirements in the complete first set of ESRS in an Excel format. The file contains additional information, such as the requirement types (quantitative or qualitative) or whether these are subject to transitional provisions. IG 3 has been published together with an explanatory note.

The EFRAG Secretariat has also published feedback statements illustrating how the feedback received during the consultation has been reflected in the final documents.

Access the press release on EFRAG’s website.

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ACCA publishes sustainability reporting guide for SMEs based on ISSB standards

May 30, 2024

On May 30, 2024, the Association of Chartered Certified Accountants (ACCA) published a document titled 'Sustainability Reporting—SME Guide'. The guide is intended to support small- and medium-sized entities (SMEs) to disclose sustainability-related information that regulators and stakeholders increasingly demand.

The guide is a tailored version of Sustainability Reporting—The Guide To Preparation to help SMEs determine, collect, and communicate sustainability-related information. It is based on the requirements of the ISSB standards because the ACCA expects that many of the sustainability-related information requests to SMEs are based on those standards.

The guide sets out the following eight stages of sustainability reporting for SMEs:

  1. Allocating responsibility for sustainability reporting
  2. Establishing the reporting landscape
  3. Determining the material sustainability-related information to be reported
  4. Determining the data requirements
  5. Collecting the data
  6. Reporting on the collected data
  7. Implementing reporting
  8. Verifying what is reported, and continual improvement

Access the guide on the ACCA’s website.


IASB issues narrow-scope amendments to classification and measurement requirements for financial instruments

May 30, 2024

On May 30, 2024, The International Accounting Standard Board (IASB) issued amendments to the classification and measurement requirements in IFRS 9 Financial Instruments. The amendments will address diversity in accounting practice by making the requirements more understandable and consistent.

These amendments respond to feedback from the 2022 Post-implementation Review of the Accounting Standard and clarify the requirements in areas where stakeholders have raised concerns, or where new issues have emerged since IFRS 9 was issued.

These include:

  • Clarifying the classification of financial assets with environmental, social and corporate governance (ESG) and similar features— ESG-linked loan features can influence their measurement at amortized cost or fair value. Stakeholders queried the determination process based on cash flow characteristics. The amendments provide clarity on assessing contractual cash flows to avoid divergence in practices.
  • Settlement of liabilities through electronic payment systems— Stakeholders noted difficulties in applying IFRS 9 derecognition rules to settlements via electronic cash transfers. Amendments clarify the derecognition date for financial assets or liabilities. The IASB also plans to create an accounting policy allowing early derecognition of financial liabilities under certain criteria.

With these amendments, the IASB has also introduced additional disclosure requirements to enhance transparency for investors regarding investments in equity instruments designated at fair value through other comprehensive income and financial instruments with contingent features, for example features tied to ESG-linked targets.

The amendments are effective for annual reporting periods beginning on or after January 1, 2026.

Access the press release on the IASB’s website.



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SEC Identifies Incorrect Tagging for Earnings Per Share Data

May 30, 2024

On May 30, 2024, the Securities and Exchange Commission (SEC) identified incorrect tagging practices for earnings per share (EPS) data in 2024 filings.

Under U.S. GAAP, entities must display both basic and diluted EPS prominently on the income statement in their annual and interim reports, using the taxonomy elements us-gaap: EarningsPerShareBasic and us-gaap: EarningsPerShareDiluted. If both EPS values are identical and shown only once, the amount should be tagged with both elements.

Staff in the Commission’s Division of Economic and Risk Analysis has observed the following incorrect tagging practices by filers in certain Forms 10-Q or 10-K submitted during 2024:

  • Creating custom tags such as BasicAndDilutedEarningsPerShare to tag this amount;
  • Tagging this amount only once using one of the two standard tags and
  • Tagging this amount using a standard tag that was deprecated in 2022.

Incorrect tagging for EPS would negatively impact the data's usability (for example, tagging the amount only once will lose either basic or diluted EPS information). Filers are encouraged to review their tagging on EPS data and make necessary corrections.

Access the announcement on the SEC’s website.

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IMF First Deputy Managing Director Delivers Speech on “How to Prevent AI from Worsening the Next Economic Downturn” at AI for Good Global Summit

May 30, 2024

On May 30, 2024, the International Monetary Fund (IMF) First Deputy Managing Director, Gita Gopinath, delivered a speech at the AI for Good Global Summit held in Geneva, Switzerland where she described how AI could escalate economic downturns through disruptions to labour markets, financial systems, and supply chains, potentially leading to unprecedented job losses and financial instability.

In her speech at the AI for Good Global Summit, Gita balanced AI's benefits, such as potential boosts to productivity, with its significant risks. She suggested several preventive policy actions, including reconsidering tax systems that favour automation, enhancing investments in education and training to protect workers, and adopting measures to lower financial and supply-chain risks related to AI. She called for a shift in the international focus towards AI-proofing the economy, urging policymakers to closely monitor AI's development and prepare for its potential economic impact. Despite outlining these risks, Gopinath emphasized that they are not predictions and stressed the importance of proactive measures to harness AI's potential for good.

Access the speech on the IMF’s website.


IASB issues podcast on latest Board developments (May 2024)

May 29, 2024

On May 29, 2024, the IASB released a podcast hosted by Executive Technical Director Nili Shah featuring IASB Vice-Chair Linda Mezon-Hutter and IASB Member Nick Anderson discussing the deliberations held during the May 2024 IASB meeting.

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

  • Feedback related to exposure draft for financial instruments with characteristics of equity.
  • Developments in the post-implementation review of IFRS 9 impairment project

The podcast can be accessed here on the IFRS Foundation website

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Updated IASB and ISSB work plan — Analysis (May 2024)

May 28, 2024

Following the IASB's and ISSB's May 2024 meetings, we have analyzed the work plan on the IFRS Foundation website to see what changes have resulted from the meetings and other developments since the work plan was last revised in April 2024.

Below is an analysis of all changes made to the work plan since our last analysis on April 29, 2024

Standard-setting projects

Maintenance projects

Research projects

Research projects

The above is a faithful comparison of the IASB and ISSB work plan on April 29, 2024, and May 28, 2024, respectively.

For access to the current work plans at any time, please click here.

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