The subject of discussion will be an accounting mismatch between financial assets and insurance contract liabilities that could arise at the beginning of the comparative period when financial assets have been derecognized during the comparative period. The mismatch arises because entities are not permitted to restate comparative information for those assets.

As explaining this mismatch to users of financial statements would be difficult and would not provide useful information because it does not represent an economic mismatch, the staff is asking the Board whether it wants to develop a narrow-scope amendment that would reduce the accounting mismatch, without having a wider effect and creating a risk of unintended consequences.

The amendment the staff is proposing would permit an entity, on initial application of IFRS 17, for the purpose of presenting comparative information, to elect to measure at fair value through profit or loss financial assets derecognized between the transition date and date of initial application of IFRS 17. The transition requirements in IFRS 9 would remain unchanged.

Review the paper for the session (scheduled for Monday May 24, 2021, 13:15-14:15) on the IASB's website.

As in the predecessor publication, IFAC continues to support a new standard-setting board under the IFRS Foundation that can lead to the coordination and harmonization of reporting and provide a baseline of requirements addressing sustainability information that is material to enterprise value. With the new publication, IFAC hopes to foster discussion on how the building blocks approach can deliver a global system for consistent, comparable, and assurable sustainability-related information that best meets the needs of investors and other stakeholders.

Review the press release and Enhancing Corporate Reporting: Sustainability Building Blocks on the IFAC's website.

In March 2021, the IASB issued the ED which contains proposed guidance for itself when developing and drafting disclosure requirements in IFRSs in future as well as proposed amendments to IFRS 13 Fair Value Measurement and IAS 19 Employee Benefits that result from applying the proposed guidance to those standards. The first webcast is scheduled for 19 May 2021 and will provide an overview of the Board’s proposals. For the con­ve­nience of par­tic­i­pants from different time zones, there will be two sessions of the webinar both dis­cussing the same topics:

• Wednesday 19 May 2021, 09:00–10:00 BST and
• Wednesday 19 May 2021, 15:00–16:00 BST.

Each session will last a maximum of 60 minutes and include a moderated ques­tion-and-an­swer session.

Review the press release on the IASB’s website.

Mr. Servais began his speech by explaining how financial markets and their regulators are a part of the solution to ensure the financial system is resilient in the face of climate-related risks and to support the transition to a sustainable economy. For the financial markets to play their role, the disclosure of comprehensive and comparable sustainability-related disclosure would be of paramount importance and since there are currently wide gaps in the disclosure requirements, the public authorities would need to step in.

He then discussed why and how IOSCO is involved:

1. IOSCO is involved because enterprise value reporting is part of its mandate to promote investor protection and IOSCO’s members can enforce sustainability reporting and help prevent greenwashing by market participants.
2. IOSCO is also involved because of its role in the oversight of the governance of the IFRS Foundation and will monitor the governance implications of the IFRS Trustees’ proposals on sustainability.
3. And IOSCO can play a critical role in adding momentum to the IFRS initiative and in fostering endorsement of the new standards around the world.

Mr. Servais stressed that IOSCO encourages a “building blocks” approach to establishing a global sustainability reporting system and limiting undue fragmentation as much as possible. By working with standard-setters from key jurisdictions, the new IFRS sustainability board’s standards would provide a globally consistent and comparable sustainability-reporting baseline. The building blocks approach would then allow jurisdictions to go further and faster if they wish, while retaining cross-border comparability. He added:

In this respect, I believe there is consistency between the IFRS/IOSCO approach and the EU’s thinking on international cooperation. The EU cannot achieve the green transition alone. It needs other countries to share its ambition and work in the same direction. Greater international alignment on ESG-related disclosures will increase global transparency. It will also reduce the due-diligence costs for global investors and the administrative costs of companies operating globally.

Mr. Servais then turned to the European Commission initiative and the proposal for a Corporate Sustainability Reporting Directive (CSRD). He welcomed that the Commission has clarified that-the EU standards should aim to incorporate the essential elements of globally accepted standards currently being developed and would build on and contribute to standardization initiatives at global level. He noted that he expected the first IFRS standard in mid-2022 and welcomed that the draft Directive clarified that EU standards "should take account of any sustainability reporting standards developed under the auspices of International Financial Reporting Standards Foundation”.

Review the full speech.

Participants of the roundtables emphasised the importance of continuing the pace and building on the existing momentum to deliver the urgent improvements needed in sustainability reporting and especially supported establishing an International Sustainability Standards Board (ISSB) under the IFRS Foundation. There was a clear willingness among participants to work collaboratively with IOSCO and the IFRS Foundation to deliver this vision. There was also broad-based agreement that, building on existing initiatives, the ISSB would be able to deliver high-quality international sustainability-related reporting standards in a timely manner. Roundtable participants also identified some important matters for IOSCO to consider before recommending to its members that ISSB standards be used for cross-border offerings or when setting sustainability reporting requirements at the domestic level.

Review the report of the key messages received during the roundtables on the IOSCO's website.

Below is an analysis of all changes made to the work plan since our last analysis on April 30, 2021.

Standard-setting projects

• Management commentary —  ED/2021/6 was published on 27 May 2021 with comments requested by 23 November 2021; feedback to the exposure draft is expected to be discussed in H1 2022
  
• Rate-regulated activities — feedback to the exposure draft is now expected to be discussed in Q4 2021 (previously H2 2021)

Maintenance projects

• Deferred tax related to assets and liabilities arising from a single transaction — This project has been removed from the work plan due to the issuance of the final amendments on May 7, 2021
• Lease Liability in a Sale and Leaseback — feedback on the exposure draft was discussed at the IASB's May meeting; a decision on the future project direction is expected in Q3 2021

Research projects

• Extractive Activities — a decision on the project direction is now expected in July 2021 (previously Q3 2021)
• Goodwill and Impairment — feedback on the discussion paper was discussed at the IASB's May meeting; a decision on the future project direction is expected in Q3 2021
• Post-implementation Review of IFRS 10-12 — feedback on the request for information is now expected to be discussed in July 2021 (previously Q3 2021)

Other projects

• no changes

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