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November 2019

Article on IFRS Standards and climate-related disclosures

Nov 28, 2019

On November 28, 2019, the International Accounting Standards Board (the Board) released an article by IASB member Nick Anderson discussing how existing requirements within IFRS Standards relate to climate change risks and other emerging risks.

In the article In Brief: IFRS Standards and climate-related disclosures, Mr Anderson provides an overview intended to help investors understand what already exists in the current requirements and guidance on the application of materiality, and how it relates to climate and other emerging risks.

Aspects he considers are:

  • Board guidance on how to make materiality judgements
  • Applying IFRS Practice Statement 2 Making Materiality Judgements to climate-related and emerging risks
  • Financial reporting considerations when applying IFRS Standards
  • Disclosing climate-related and other emerging risks in the financial statements
  • Management commentary: providing context to the financial statements
  • Summary: materiality judgements should serve investors’ information needs

The article notes that Mr Anderson's thoughts have been inspired by work from the Australian Accounting Standards Board (AASB) and Audit and Assurance Board (AUASB).

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

FASB issues ASUs to defer effective dates of certain major standards

Nov 15, 2019

On November 15, 2019, the Financial Accounting Standards Board (FASB) issued Accounting Standards Updates (ASUs) 2019-09 and 2019-10, which delay certain effective dates of four major standards.

ASU 2019-09 gives all insurance entities that issue long-duration insurance contracts (e.g., life insurance and annuities) additional time to implement ASU 2018-12 (codified in ASC 944).

ASU 2019-10 gives private companies, not-for-profit entities, and certain small public companies additional time to implement the Board’s standards on current expected credit losses (ASC 326), derivatives and hedging (ASC 815), and leases (ASC 842).

Review the press release on the FASB’s website.

FRC publishes thematic review findings of IFRS 16 company disclosures

Nov 05, 2019

On November 5, 2019, the UK Financial Reporting Council (FRC) published the results of a thematic review looking at the interim disclosures made by companies in the first year of application of IFRS 16, "Leases".

The review identified that there are a number of areas where disclosure around IFRS 16 could be improved. Notwithstanding that half-yearly disclosures are less extensive than those of a full year, the FRC is of the opinion that “some companies did not sufficiently explain the impact of adopting IFRS 16”. The FRC expects that disclosures in full year reports will be more comprehensive.

Review the press release and IFRS 16 thematic review on the FRC's website.

IASB Chair discusses the future of financial reporting

Nov 05, 2019

On November 5, 2019, the International Accounting Standards Board (IASB) released a speech given at the Eumedion Annual Symposium, where IASB Chair Hans Hoogervorst discussed the Board’s projects on primary financial statements (PFS), management commentary and sustainability reporting.

Mr. Hooger­vorst began with an overview of the PFS project and provided comments related to new subtotals, such as operating profit and profit before financing and tax. He also discussed the need for greater transparency and discipline in the use of non-GAAP measures.

Next, Mr. Hooger­vorst commented on man­age­ment com­men­tary to provide broader financial in­for­ma­tion, such as the impact of in­tan­gi­ble assets. In addition, the project will revise the Practice Statement to accommodate the increase in interest in sustainability reporting.

Lastly, he agreed with the Eumedion’s green paper, Towards a global standard-setter for non-financial reporting, which called for the need for consolidation in non-financial reporting.

Review the tran­script of his speech on the IASB’s website.

IASB discusses redeliberation plan for proposed IFRS 17 amendments

Nov 20, 2019

On November 19-20, 2019, the International Accounting Standards Board (IASB) held its meeting in London and was given an overview of the feedback received on the exposure draft ED/2019/4 "Amendments to IFRS 17" and discussed a plan for redeliberating the proposed amendments.

There were four papers for the meeting (all links to the IASB website):

  • Agenda Paper 2A provided an overview of the comment letters and overall feedback on the exposure draft.
  • Agenda Paper 2B summarized the feedback from the comment letters on the ten questions in the exposure draft.
  • Agenda Paper 2C summarized comments on areas for which amendments to IFRS 17 were considered but not proposed and other comments.
  • Agenda Paper 2D set out the staff recommended plan for redeliberations and asked whether the Board agreed with that plan.

The proposed redeliberation plan summarized staff recommendations for each point for the Board to decide whether it could confirm the proposed amendment at a future meeting, should consider further the feedback from respondents on the topic, or did not intend to consider further the topic.

The Board did not discuss each of the topics individually. Rather, the staff grouped the topics together into three groups:

  1. Proposed amendments that could be confirmed without further discussion because of general support in the comment letters (listed in Agenda Paper 2D paragraph 7).
  2. Proposed amendments amendments that warranted further discussion as the feedback in the comment letters was constructive and provided at least a "little element" of new information (listed in Agenda Paper 2D paragraph 9).
  3. Topics that did not warrant further discussion as either there was support in the comment letters for the Board not picking them up or as the feedback in the comment letters did not provide any new information (listed in Agenda Paper 2D paragraph 10).

The Board's votes translate as follows into the staff's table of proposed further actions included as Appendix A in Agenda Paper 2D:

Question/Topic Detailed description in Agenda Paper, paragraphs Staff recommendation Board decision
Question 1(a) — Scope exclusion for credit cards 2B, 6‒9 Consider further the feedback from respondents 14 Yes
Question 1(b) — Scope exclusion for loans 2B, 10-14 Confirm the proposed amendment 14 Yes
Question 2 — Expected recovery of insurance acquisition cash flows 2B, 15-21 Consider further the feedback from respondents 14 Yes
Question 3(a) — Contractual service margin attributable to investment services | Coverage units for insurance contracts without direct participation features 2B, 22‒24 Consider further the feedback from respondents 14 Yes
Question 3(b) — Contractual service margin attributable to investment services | Coverage units for insurance contracts with direct participation features 2B, 25‒27 Confirm the proposed amendment 14 Yes
Question 3(c) — Contractual service margin attributable to investment services 2B, 28‒31 Consider further the feedback from respondents 14 Yes
Question 4 — Reinsurance contracts held — recovery of losses 2B, 32‒36 Consider further the feedback from respondents 14 Yes
Question 5 — Presentation in the statement of financial position 2B, 37‒41 Confirm the proposed amendment 14 Yes
Question 6 — Applicability of the risk mitigation option 2B, 42‒47 Confirm the proposed amendment for reinsurance contracts held and consider further the feedback from respondents on non-derivative financial instruments measured at fair value through profit or loss 14 Yes
Question 7(a) — Effective date of IFRS 17 2B, 48‒53 Consider further the feedback from respondents 14 Yes
Question 7(b) — IFRS 9 temporary exemption in IFRS 4 2B, 54‒59 Consider further the feedback from respondents 14 Yes
Question 8(a) — Transition reliefs for business combinations 2B, 60‒66 Confirm the proposed amendment and consider further the feedback from respondents on contracts acquired in their settlement period 14 Yes
Question 8(b)–(c) — Transition reliefs for the risk mitigation option 2B, 67‒72 Confirm the proposed amendment and consider further the feedback from respondents on the prohibition from applying the risk mitigation option retrospectively 14 Yes
Question 9 — Minor amendments 2B, 73‒77 Consider further the feedback from respondents 14 Yes
Question 10 — Terminology 2B, 78‒82 Consider further the feedback from respondents as part of the discussion of Question 3 14 Yes
Level of aggregation 2C, 7‒13 Consider further the feedback from respondents on some specific contracts 14 Yes
Cash flows in the boundary of a reinsurance contract held 2C, 14‒19 Do not plan to consider further the topic 13 Yes
Subjectivity in the determination of discount rates and the risk adjustment for non-financial risk 2C, 20‒24 Do not plan to consider further the topic 13 Yes
Risk adjustment for non-financial risk in a consolidated group of entities 2C, 25‒29 Do not plan to consider further the topic 13 Yes
Discount rate used to determine adjustments to the contractual service margin 2C, 30‒36 Do not plan to consider further the topic 13 Yes
Other comprehensive income option for insurance finance income or expenses 2C, 37‒41 Do not plan to consider further the topic 13 Yes
Business combinations| Contracts acquired in their settlement period 2C, 42‒48 Consider further the feedback from respondents 14 Yes
Business combinations| Classification of contracts acquired 2C, 49‒55 Do not plan to consider further the topic 13 Yes
Scope of the variable fee approach| Reinsurance contracts issued 2C, 56‒62 Do not plan to consider further the topic 13 Yes
Interim financial statements 2C, 63‒74 Consider further the feedback from respondents 14 Yes
Mutual entities issuing insurance contracts 2C, 75‒79 Do not plan to consider further the topic and confirm the addition of the proposed footnote to the Basis for Conclusions on IFRS 17 13 Yes
Additional transition modifications and reliefs 2C, 80‒81 Consider further the feedback from respondents on additional specific transition modifications and reliefs 14 Yes
New concerns and implementation questions 2C, 82‒85 Consider further the feedback from respondents 14 Yes

The staff plan to present papers on the above topics to the Board at future meetings in the period from December 2019 to February 2020. The staff expect that there will sufficient time for the Board to consider the detailed feedback and finalize any resulting amendments by mid-2020.

IASB releases podcast on IFRS 17

Nov 21, 2019

On November 21, 2019, the International Accounting Standards Board (IASB) released a podcast featuring IASB members Darrel Scott and Nick Anderson, as well as technical staff member Roberta Ravelli, as they discuss the developments at the November 2019 Board meeting related to the amendment IFRS 17, "Insurance Contracts".

In particular, Mr. Anderson discusses the investors’ view on the implementation of IFRS 17 and the discussions at the CMAC meeting on this topic.

View the podcast on the IASB's website and review our earlier news item summarizing the results of the IASB's votes.

IFRS Foundation issues guide on accounting policies

Nov 21, 2019

On November 21, 2019, the IFRS Foundation issued, "Guide to Selecting and Applying Accounting Policies — IAS 8".

This guide explains how to apply the three-step process to developing accounting policies by using material and examples that have been discussed by the IASB or IFRS Interpretations Committee.

Review the press release on the IASB’s Web site.

Recordings from the sixth IASB Research Forum

Nov 04, 2019

On November 4, 2019, The International Accounting Standards Board (IASB) hosted its sixth Research Forum on October 28–29, 2019 in Short Hills, New Jersey, with the Journal of International Accounting Research (JIAR). On November 4, 2019, The IASB released audio recordings and slides from the presentations given at the forum.

The meeting saw the pre­sen­ta­tion on four academic papers, responses by academics and stan­dard-set­ters as well as a general dis­cus­sion with the audience. In addition, two case studies were discussed during breakout sessions.

Review the press release and access the slides and audio recordings on the IASB’s website.

Summary of the October 2019 CMAC meeting

Nov 06, 2019

On November 6, 2019, the International Accounting Standards Board (IASB) released a summary of the Capital Markets Advisory Committee (CMAC) meeting, which was held in London on October 10, 2019.

The topics discussed at the meeting included:

  • Rate regulated activities.
  • Post-implementation review of IFRS 10, IFRS 11, and IFRS 12.
  • Agenda consultation.

The next meeting will be held on March 26, 2020.

Review the press releasemeeting page and meeting summary on the IASB's website.

Summary of the October 2019 GPF meeting

Nov 19, 2019

On November 19, 2019, the International Accounting Standards Board (IASB) released a summary of its meeting with the Global Preparers Forum (GPF) in London on October 8, 2019.

The topics discussed at the meeting included:

  • IASB update
  • IBOR — Phase 2 update
  • Primary financial statements — Project update
  • Accounting policies disclosure — Summary of exposure draft and gathering preliminary views from GPF members
  • Post-implementation reviews of IFRS 10, IFRS 11, and IFRS 12 — Gathering GPF’s views to be considered in the Request for Information.
  • Agenda consultation — Gathering GPF’s views on potential financial reporting priorities for a Request for Information related to the 2020 Agenda Consultation

The next GPF meeting will be held on March 5, 2020.

Review the press releasemeeting page and the meeting summary on the IASB's website.

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