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October 2021

AcSB Response – Initial Application of IFRS 17 and IFRS 9—Comparative Information

Oct 15, 2021

In October 2021, the International Accounting Standards Board (IASB) published the Accounting Standards Board (AcSB) response to the IASB’s Exposure Draft issued in July 2021.

The AcSB’s letter supports the proposed amendment and provides suggestions to further enhance the usefulness of the comparative information presented. The suggestions include broadening the scope of the classification overlay to cover all financial assets and considering additional disclosures.

Review the letter on the IASB's website.

AcSB Response – Third Agenda Consultation

Oct 26, 2021

On October 26, 2021, the International Accounting Standards Board (IASB) published the Accounting Standards Board (AcSB) response to the IASB’s Request for Information, "Third Agenda Consultation" issued in March 2021.

The AcSB’s letter comments on the IASB’s overall strategic direction and identifies and describes the financial reporting topics it thinks the IASB should prioritize over the next five years, including climate-related risks, cryptocurrencies, the statement of cash flows, and intangible assets.

Review the letter on the IASB's website.

IASB publishes webcast series on its management commentary ED

Oct 27, 2021

On October 27, 2021, the International Accounting Standards Board (IASB) released a series of five short webcasts on the IASB's exposure draft on management commentary to answer frequently asked questions about the project.

The aspects of the project addressed in the webcasts are:

  • Why and why now?
  • Value creation
  • Disclosure objectives
  • Key matters and materiality
  • Terminology

Each of the webcasts is about ten minutes long.

Listen to the webcasts on the IASB's website.

IASB video on proposed reduced disclosure IFRS

Oct 14, 2021

On October 14, 2021, the International Accounting Standards Board (IASB) posted a video hosted by IASB Board Member Jianqiao Lu which provides an overview of the exposure draft (ED), "Subsidiaries without Public Accountability: Disclosures".

On July 26, 2021, the IASB issued the ED that would permit eligible subsidiaries that are small and medium-sized entities (SMEs) to apply IFRSs but with reduced disclosure requirements. Comments on the ED are due by January 31, 2022.

Review the press release on the IASB’s website.

IFRS Foundation publishes webcast on the Technical Readiness Working Group

Oct 07, 2021

On October 7, 2021, the IFRS Foundation published a webcast which provides an introduction of the Technical Readiness Working Group (TRWG) members, summary of its work programme, and an expected timeline of the TRWG.

The TRWG provides technical observations and proposals for consideration which supports early standard-setting activities for the International Sustainability Standards Board.

Review the press release on the IASB’s website.

New TCFD status report, additional and updated guidance

Oct 14, 2021

On October 14, 2021, the Task Force on Climate-related Financial Disclosures (TCFD) set up by the Financial Stability Board (FSB) to develop voluntary, consistent climate-related financial risk disclosures for use by companies in providing information to lenders, insurers, investors and other stakeholders published a fourth status report providing an overview of the extent to which companies in their 2020 reports included information aligned with the core TCFD recommendations published in June 2017.

The TCFD found that:

  • Disclosure increased more between 2019 and 2020 than in any previous year assessed, consistent with global momentum around climate-related reporting. However, significant progress is still needed as an average of only one in three companies reviewed disclosed climate-related information aligned with the TCFD recommendations.
  • Companies remain more likely to disclose information on their climate-related risks and opportunities than on any other recommended disclosure, with over half of the companies reviewed including such information in their 2020 reports.
  • Disclosure of the resilience of companies’ strategies under different climate-related scenarios is still the least reported recommended disclosure, however, disclosure increased from 5% of companies in 2018 to 13% in 2020.
  • Although the TCFD recommends disclosure of governance regardless of materiality, the Governance recommendation remains the least disclosed recommendation with the two Governance recommended disclosures the second and third least disclosed.
  • Materials and buildings companies now lead on disclosure. The average level of disclosure across the 11 recommended disclosures for fiscal year 2020 was 38% for materials and buildings companies.
  • The insurance industry significantly increased its average level of disclosure by 11 percentage points between 2019 and 2020, and now leads all groups by at least 15 percentage points in disclosure of risk management processes.
  • Europe remains the leading region for disclosures, with average level of reporting across the 11 recommended disclosures from fiscal year 2020 now at half of European companies assessed. European companies have increased their average disclosure by 15 percentage points since 2019, and now disclose 16 percentage points more than the next closest region.

The TCFD has also published two additional documents: Guidance on Metrics, Targets, and Transition Plans to support preparers in disclosing decision-useful information and linking those disclosures with estimates of financial impacts and Implementing the Recommendations of the Task Force on Climate-related Financial Disclosures, which updates and replaces Implementing the Recommendations of the TCFD initially published in 2017.

Review the following additional information on the FSB's website:

 

SEC reopens comment period for listing standards for recovery of erroneously awarded compensation

Oct 31, 2021

In October 2021, the Securities and Exchange Commission today reopened the comment period on proposed rules for listing standards for the recovery of erroneously awarded compensation.

The reopened comment period permits interested parties to submit further comments and data on rule amendments the Commission first proposed in 2015 as well as comments in response to questions being raised by the Commission now in its reopening release.  In addition, interested parties may comment on developments since 2015 when the proposing release was issued, including trends in accounting practices and the potential economic and other effects of the proposal in light of any such developments.

The public comment period will remain open for 30 days following publication of the release in the Federal Register.

Review the press release on the SEC's website.

Three articles on business combinations under common control

Oct 12, 2021

The Australian Accounting Review published three articles relating to business combinations under common control (BCUCC), one of them by IASB Board member Ann Tarca.

The article by Ms. Tarca explains the Board’s preliminary views for accounting for business combinations under common control that aim to reduce diversity in practice and to improve the information provided to investors so they can understand the effects of these transactions and compare companies that undertake them.

The second article discusses the controlling entity’s perspective in a BCUCC and suggests some issues for the Board to consider in its redeliberations of its preliminary views.

The third article discusses the choice of the controlling party or transferred business book values, the principles and objectives of the IASB's discussion paper and the relationship with related party disclosures.

Review all three articles through the press release on the IASB's website.

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