January 2020

IASB publishes overview of consultation documents to be expected in 2020

Jan 07, 2020

On January 7, 2020, the International Accounting Standards Board (the Board) released a list of consultation documents that it plans to publish in 2020, including a discussion paper on goodwill and impairment, an exposure draft in its management commentary (wider corporate reporting) project, and a request for information regarding the 2020 Agenda consultation.

The full list of consultations to be expected and the currently expected timing is given below:

Project Type of consultation document When to be expected?
Goodwill and impairment Discussion paper Q1 2020
Comprehensive review of the IFRS for SMEs Request for information Q1 2020
Business combinations under common control Discussion paper Q2 2020
IBOR reform and its effects on financial reporting — Phase 2 Exposure draft Q2 2020
Rate-regulated activities Exposure draft Q2 2020
Post-implementation review of IFRS 10, IFRS 11, and IFRS 12 Request for information Q2 2020
Disclosure initiative — Targeted standards-level review of disclosures Exposure draft H2 2020
Management commentary (wider corporate reporting) Exposure draft H2 2020
2020 Agenda consultation Request for information H2 2020

Review the press release on the Board's website.

IBC discusses Big4 report on reporting sustainability information at WEF

Jan 24, 2020

In January 2020, at the World Economic Forum (WEF), the chief executive officers of many of the world’s largest companies expressed support for aligning on a core set of metrics and disclosures in their annual reports on the non-financial aspects of business performance such as greenhouse gas emissions and strategies, diversity, employee health and well-being and other factors.

The International Business Council (IBC) of the WEF discussed a proposal prepared by the Forum in collaboration with the Big Four accounting firms – Deloitte, EY, KPMG and PwC – titled Toward Common Metrics and Consistent Reporting of Sustainable Value Creation. The proposal recommends a set of core metrics and recommended disclosures. The intent is for the metrics to be reflected in the mainstream annual reports of companies on a consistent basis across industry sectors and countries.

The proposed metrics and recommended disclosures have been organized into four pillars that are aligned with the UN Sustainable Development Goals (SDGs) and principal Environmental, Social, and Governance (ESG) domains. They are:

Principles of Governance Planet People Prosperity
aligned with SDGs 12, 16 and 17 aligned with SDGs 6, 7, 12, 13, 14 and 15 aligned with SDGs 1,3, 4, 5 and 10 aligned with SDGs 1, 8, 9 and 10
focuses on a company’s commitment to ethics and societal benefit looks at the themes of climate sustainability and environmental responsibility examines the roles human and social capital play in business focuses on business contributions to equitable, innovative growth

The metrics are drawn, wherever possible, from existing standards and disclosures such as GRI, SASB, TCFD, CDSB and others. Instead of reinventing the wheel by creating a new standard, they aim to amplify and elevate the rigorous work that has already been done by these initiatives, bringing their most material aspects into mainstream reports on a consistent basis.

Adoption of such recommended universal metrics and disclosures by IBC companies is intended to be a catalyst for greater alignment and synergy among existing ESG standards and ultimately a system-wide solution, such as a generally accepted international accounting or other reporting standard drawn from best practice.

Review the Consultation Draft Toward Common Metrics and Consistent Reporting of Sustainable Value Creation from the WEF's website.

ICAS report on fair value measurement of financial instruments

Jan 13, 2020

In 2019, the Institute of Chartered Accountants of Scotland (ICAS) released a report examining the preparation and evaluation of fair value measurements for financial instruments reported in the financial statements.

ICAS joined forces with the International Association of Accounting Education and Research (IAAER) and the International Audit and Assurance Standard Board (IAASB) to commission qualitative research on the valuation of financial instruments. Previous research had been done from the perspective of auditors, but this research focuses on the perspective of the valuation specialist.

While the report notes no distinct differences across geographical regions, it analyses pressure points and potential conflicts in the four phases of the production of fair value measurements reported in financial statements: 1) project acquisition and planning; 2) scoping, valuation approach, and methodology; 3) estimate preparation and relationship management; and 4) negotiations and final estimate reporting.

The report does include some policy recommendations for regulators, standard-setters, and other stakeholders:

  • Auditors and regulators should consider the relative advantages and disadvantages of adopting the independent estimate approach as best practice when evaluating clients’ fair value measurements;
  • Standard-setters should consider strengthening auditor awareness of the effects of budget and timeline pressures, and scope constraints, and encourage a more collaborative team-based approach between auditors and specialists;
  • Regulators should consider incorporating an evaluation of management’s competence related to fair value measurements as a component of the auditors’ risk assessment process; and
  • Standard-setters should consider enhancing corporate governance by promoting understanding of the subjectivity inherent in fair value measurements among the board and audit committees.

Review the full report on the ICAS' website.

SEC Proposes Amendments to Modernize MD&A and Certain Other Financial Disclosure Requirements and Issues Guidance on KPIs and Metrics

Jan 30, 2020

On January 30, 2020, the Securities and Exchange Commission (SEC) issued a proposed rule and guidance as part of its efforts to “modernize, simplify, and enhance certain financial disclosure requirements in Regulation S-K.”

The proposed rule’s amendments would reduce “duplicative disclosure and [focus] on material information in order to improve these disclosures for investors and simplify compliance efforts for registrants.”

The guidance addresses “key performance indicators and metrics in Management’s Discussion and Analysis of Financial Condition and Results of Operations (‘MD&A’).”

Comments on the proposed amendments are due 60 days after the date of their publication in the Federal Register. The guidance will become effective on the date of its publication in the Federal Register.

Review the press release on the SEC’s website.

SEC publishes document on cybersecurity and resiliency

Jan 27, 2020

On January 27, 2020, the Securities and Exchange Commission Commission's Office of Compliance Inspections and Examinations (OCIE) issued examination observations related to cybersecurity and operational resiliency practices taken by market participants.

The document discusses best practices for enhancing cybersecurity preparedness and operational resiliency. Topics addressed include the following:

  • Governance and risk management
  • Access rights and controls
  • Data loss prevention
  • Mobile security
  • Incident response and resiliency
  • Vendor management
  • Training and awareness

Review the press release and cybersecurity page on the SEC’s website.

Summary of the December 2019 MCCG meeting

Jan 13, 2020

On January 13, 2020, the International Accounting Standards Board (the Board) published a summary of the Management Commentary Consultative Group (MCCG) meeting held on December 13, 2019.

The meeting focused on topics for further input, an overview of the staff’s current proposals, and supporting the adoption of the Practice Statement.

The topics for further input were:

  • information on intangibles and ESG matters in management commentary;
  • the meaning of ‘management’s view’;
  • the entity’s purpose; and
  • guidance on narrative coherence.

Review the press release and summary on the Board's website.

Updated IASB work plan — Analysis (January 2020)

Jan 31, 2020

On January 31, 2020, the International Accounting Standards Board (the Board) updated its work plan following its January 2020 meeting.

Below is an analysis of all changes made to the work plan since our last analysis on December 14, 2019.

Standard-setting projects

  • Primary Financial Statements — After publishing an exposure draft in December 2019, the next milestone for this project is now exposure draft feedback. Comments are due by 30 June 2020.
  • Rate-regulated Activities —  An exposure draft is now expected in H2 2020 (formerly H1 2020).
  • Subsidiaries that are SMEs — After reviewing research at the January 2020 Board meeting, the Board decided to elevate this project to a standard-setting project. The next milestone is now  a decision on whether to proceed with a discussion paper or exposure draft. No date is listed.

Maintenance projects

Research projects

Other projects

The revised IASB work plan is available on the Board's website.

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