The IASB had issued IFRS 6 Exploration for and Evaluation of Mineral Resources in December 2004 because of a project taken over from the IASC.

Based on evidence collected, the IASB concluded at its September 2023 meeting that there is no compelling evidence that standard-setting would be necessary.

The IASB acknowledged that diverse accounting policies for exploration and evaluation expenditure would continue to be used in practice. However, feedback from investors and other users of financial statements suggested that those diverse accounting policies were not a significant concern.

Overall, the research findings suggested that any improvements to financial reporting that might result from amending or replacing the requirements in IFRS 6 or other IFRS Accounting Standards are likely to be outweighed by the costs of developing and implementing any such changes.

Review the press release and the project summary on the IFRS Foundation website.

• New item: IAS 37 Provisions, Contingent Liabilities and Contingent Assets — Climate-related Commitment
• New item: IFRS 8 Operating Segments — Disclosure of Revenues and Expenses for Reportable Segments
• Finalization of agenda decision: IAS 27 Separate Financial Statements — Merger between a Parent and Its Subsidiary in the Separate Financial Statements
• Input to IASB project: Climate-related and Other Uncertainties in the Financial Statements
• Input to IASB project: Provisions —Targeted Improvements
• Input to IASB project: Power Purchase Agreements

Review the meeting highlights on the IFRS website.

IAS 32 Financial Instruments: Presentation sets out how a company that issues financial instruments should distinguish debt instruments from equity instruments. The distinction is important because the classification of the instruments affects the depiction of a company’s financial position and performance.

IAS 32 works well for most financial instruments. However, the instruments have evolved since this IFRS Accounting Standard was initially issued—they are more complex and present new reporting challenges for companies. Companies’ solutions to the reporting challenges differ, resulting in diverse accounting practices that make it difficult for investors to assess and compare companies’ financial position and performance. Investors are calling for better information, particularly about equity instruments.

To address these challenges, the proposals in the Exposure Draft would amend IAS 32, IFRS 7 Financial Instruments: Disclosures, and IAS 1 Presentation of Financial Statements.

The IASB proposes:

• to clarify the underlying classification principles of IAS 32 to help companies distinguish between debt and equity;
• to require companies to disclose information to further explain the complexities of instruments that have both debt and equity features; and
• to issue new presentation requirements for amounts—including profit and total comprehensive income—attributable to ordinary shareholders separate to the amounts attributable to other holders of equity instruments.

Comments on the proposed changes are requested by March 29, 2024.

Access the press release and the exposure draft on the IFRS Foundation website.

Specifically, the podcast discusses:

• ISSB’s first meeting at its Beijing office and the first Beijing International Sustainability Conference.
• GRI’s Sustainability Innovation Lab.
• Foundational work keeping technical staff busy.
• Technical discussions at November board week.

Access the podcast on Youtube.

Below is an analysis of all changes made to the work plan since our last analysis on October 30, 2023

Standard-setting projects

• Management Commentary — A decision on the project direction is expected in Q2 2024 (previously H1 2024)
• Primary Financial Statements — An IFRS Accounting Standard is expected in Q2 2024 (previously H1 2024)

Strategy and Governance

• ISSB Consultation on Agenda Priorities — The feedback on the request for information is now expected in January 2024 (previously December 2023)

Maintenance projects

• Addendum to the Exposure Draft Third edition of the IFRS for SMEs Accounting Standard— The project has been added to the work plan to reflect amendments issued by the IASB in 2023 with an exposure draft expected in H1 2024
• Annual Improvements to IFRS Accounting Standards — The following projects will have feedback discussions on their exposure draft in January 2024 (previously Q1 2024):
  • Cost Method (Amendments to IAS 7)
  • Derecognition of Lease Liabilities (Amendments to IFRS 9)
  • Determination of a ‘De Facto Agent’ (Amendments to IFRS 10)
  • Disclosure of Deferred Difference between Fair Value and Transaction Price (Amendments to Guidance on implementing IFRS 7)
  • Gain or Loss on Derecognition (Amendments to IFRS 7)
  • Hedge Accounting by a First-time Adopter (Amendments to IFRS 1)
  • Introduction and Credit Risk Disclosures (Amendments to Guidance on implementing IFRS 7)
  • Transaction Price (Amendments to IFRS 9)

Research projects

• Business Combinations under Common Control — At its November 2023 meeting, the IASB decided to discontinue this project; a project summary is expected in Q2 2024
• Post-implementation Review of IFRS 15 — Request for information feedback is expected for January 2024 (previously Q1 2024)
• Post-implementation Review of IFRS 9 — After discussing the feedback received at its November 2023 meeting, the IASB will now publish a project summary (expected in H2 2024)

Other projects

• IFRS Accounting Taxonomy Update — Amendments to IAS 12, IAS 21, IAS 7 and IFRS 7 — Feedback received will be discussed in January 2024 (previously Q1 2024)
• IFRS Accounting Taxonomy Update — Common Practice (Financial Instruments) and General Improvements — Feedback discussions on the proposed IFRS Taxonomy Update published in November 2023 are expected in Q1 2024
• IFRS Sustainability Disclosure Taxonomy — Discussion of the proposed taxonomy feedback is now expected in December 2023 (previously November 2023)

The above is a faithful comparison of the IASB and ISSB work plan on October 30, 2023 and November 20, 2023.

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

The proposed Guideline would address the accounting for life insurance contracts that contain a cash surrender component, from the policy owner’s point of view. The proposed Guideline includes guidance on recognition and measurement of cash surrender value of a life insurance policy, presentation of policy premiums and changes in cash surrender value, and disclosures.

The proposed Guideline:

• requires recognition of cash surrender value as an asset measured at the amount that would be immediately realized by the policy holder if the policy were terminated prior to the death of the insured
• requires presentation of policy premiums and change in cash surrender value on a net basis, where a net debit is reported as expense and a net credit is reported as income; and
• establishes disclosure requirements, including disclosure of cash surrender value in aggregate for all life insurance policies with cash surrender value and the amounts of acquisitions and terminations of life insurance policies during the period

The response deadline is January 31, 2024.

Access the exposure draft on the FRAS Canada website.

While the FRC identified examples of good practice, there is scope for improvement under IFRS 17 in the following key areas:

• Providing quantitative and qualitative disclosures, that are company-specific, enabling users to understand how insurance contracts are measured and presented in the financial statements.
• Ensuring that accounting policies are sufficiently granular and provide clear, consistent explanations of accounting policy choices, key judgements and methodologies, particularly where IFRS 17 is not prescriptive.
• Avoiding any boiler plate wording - narrative should always reflect the company’s particular circumstances.

The full review is available on the FRC website.

On November 6, 2023, the IFRS Foundation issued a proposed IFRS Taxonomy Update, 'IFRS Accounting Taxonomy 2023 — Proposed Update 2 'Common Practice for Financial Instruments, General Improvements and Technology Update''.

The proposed changes reflect:

• common reporting practice relating to the presentation of financial instruments in digital financial statements prepared by banking institutions using IFRS Accounting Standards; 
• general improvements; and
• updates to the IFRS Accounting Taxonomy’s technology

Comments are requested by January 5, 2024.

Refer the proposed changes in the press release on the IFRS Foundation website.

The proposed amendment to IAS 21 (a) defines exchangeability and thus a lack of exchangeability; and (b) specifies how an entity determines the spot exchange rate when a currency lacks exchangeability. 

The AcSB’s due process included:

• ensuring that Canadian entities’ financial reporting needs were considered by the IASB; and
• issuing the AcSB’s own exposure draft on the IASB proposal.

The IASB’s proposals were deemed appropriate for application in Canada and accordingly the amendments have been incorporated into Canadian GAAP in accordance with the AcSB’s strategy of adopting IFRS Standards for publicly accountable enterprises.

The amendments are now in Part I of the CPA Canada Handbook – Accounting, effective for annual reporting periods beginning on or after January 1, 2025. The amendments require entities to apply a consistent approach in assessing whether a currency can be exchanged into another currency and, when it cannot, in determining the exchange rate to use and the disclosures to provide.

Access the effective dates here.

The consultation provides an opportunity for constituents to comment on the IPSASB’s proposed Strategic Objective, and the two main activities to deliver on the Strategic Objective.

In addition to the proposed new maintenance activities and the priorities for these, constituents are also asked to comment on potential future Financial Reporting Work Program priorities, and what the key public sector sustainability reporting issues the IPSASB should consider adding to its Work Program.

The consultation is open for public comment until February 15, 2024.

Review the consultation on the IPSASB website.