Representatives from Financial Reporting & Assurance Standards Canada’s sustainability standards team and the Sustainability Standards Board of Japan (SSBJ) also attended the meeting. They shared updates on their activities and discussed the connectivity between sustainability and financial reporting.

Review the press release on the AcSB's website.

The AcSB Exposure Draft is similar to the Exposure Draft of the same name recently issued by the IASB, and reflects proposals made by the IASB that the AcSB intends to adopt, subject to deliberating comments received, as Canadian generally accepted accounting principles.

The AcSB encourages Canadian stakeholders to respond to the IASB on its Exposure Draft. Specific questions on which the IASB would like input are provided in the Invitation to Comment in its Exposure Draft. The AcSB requests that comment letters be sent directly to the IASB with a copy to the AcSB. Comments to the IASB are due by March 10, 2023. Responses to the AcSB on its Exposure Draft are due on the same date.

Re­view the Exposure Draft  on the AcSB's web­site.

The Staff’s action was prompted by the SEC’s adoption of a new electronic filing requirement for the glossy annual report that is required under Exchange Act Rules 14a-3 and 14c-3. As of Wednesday, January 11, 2023, it is now mandatory for glossy annual reports to be submitted to the SEC via EDGAR. Foreign private issuers that furnish their glossy annual report in response to the requirements of Form 6-K also have to submit those reports via EDGAR.

The annual report is filed under the EDGAR header submission type “ARS,” and, unlike your other EDGAR filings which must be filed in HTML format, the glossy annual report is submitted as a PDF file.

Review the following information:

• The Corporate Counsel article
• Withdrawn guidance
• SEC’s adoption of a new electronic filing requirement

Specifically, IASB member Rika Suzuki takes a look into (i) how companies could disclose better information about business combinations and (ii) whether to retain the impairment-only model to account for goodwill or to explore reintroducing amortization of goodwill.

For more information, see the press release and ‘In Brief’ article on the IFRS Foundation’s website.

Background

In March 2022, the OECD released technical guidance on its 15% global minimum tax agreed as the second ‘pillar’ of a project to address the tax challenges arising from digitalisation of the economy. This guidance elaborates on the application and operation of the Global Anti-Base Erosion (GloBE) Rules agreed and released in December 2021 which lay out a co-ordinated system to ensure that multinational enterprises with revenues above €750 million pay tax of at least 15% on the income arising in each of the jurisdictions in which they operate.

The IASB decided to respond to stakeholders’ concerns about the potential implications of the imminent implementation of these rules on the accounting for income taxes by jurisdictions. In particular, the IASB noted that the situation is very complicated as:

• jurisdictions may change statutory tax rates to avoid being considered a low-tax environment;
• companies might decide to move their business to jurisdictions with higher statutory tax rates; and
• companies might engage in business that comes with tax incentives that might bring down their statutory tax rate to below 15% although the jurisdiction they are doing business in is not generally considered a low-tax environment.

All of these and further considerations would entail most complicated calculations of deferred tax in a situation that is highly volatile due to the fact that jurisdictions implement the OECD rules at different speed and different points of time. Due to the many unknown variables involved, the IASB has decided to propose an exemption until the global tax system has settled and reestablished itself and the IASB can thoroughly assess the situation and provide a reliable solution.

Suggested changes

The proposed amendments in exposure draft IASB/ED/2023/1 International Tax Reform — Pillar Two Model Rules (Proposed amendments to IAS 12) are:

• The IASB proposes to provide an exception to the requirements in IAS 12 that an entity does not recognise and does not disclose information about deferred tax assets and liabilities related to the OECD pillar two income taxes. An entity would disclose that it has applied the exception.
• The IASB proposes that, in periods in which pillar two legislation is enacted or substantively enacted, but not yet in effect, an entity would disclose:
  • information about such legislation enacted or substantively enacted where the entity operates;
  • the jurisdictions in which the entity’s average effective tax rate is below 15%; and
  • whether there are jurisdictions where the entity expects either to pay pillar two income taxes although the 15% threshold does not apply or not to pay pillar two income taxes although the 15% threshold does apply.
• The IASB proposes that an entity applies the exception immediately upon issuance of the amendments and retrospectively in accordance with IAS 8 and the disclosure requirements for annual reporting periods beginning on or after January 1, 2023.

Comments on the proposed changes are requested by March 10, 2023 (the DPOC agreed to a shortened comment period in view of the urgency of the matter).

Additional information

• IASB press release
• IASB exposure draft
• Deloitte Global iGAAP in Focus newsletter

Review the article

Review the article

Review the press release and rulemaking list on the SEC's website.

As Chief Accountant, Mr. Munter will continue to lead the Office of the Chief Accountant (OCA) and serve as the principal advisor to the Commission on accounting and auditing matters. He also will be responsible for assisting the Commission in discharging its oversight of both the Financial Accounting Standards Board (FASB) and the Public Company Accounting Oversight Board (PCAOB).

Review the press release on the SEC’s website.

Below is an analysis of all changes made to the work plan since our last analysis on December 19, 2022.

Stan­dard-set­ting projects

• Dis­clo­sure Ini­tia­tive — Targeted Stan­dards-level Review of Dis­clo­sures  — The project summary is now expected in March 2023 (pre­vi­ously Q1 2023).
• Second com­pre­hen­sive review of the IFRS for SMEs Accounting Standard — Feedback on the exposure draft is expected in Q2 2023 (pre­vi­ously H1 2023).
  

Main­te­nance projects

• Amend­ments to the clas­si­fi­ca­tion and mea­sure­ment of financial in­stru­ments — This project exposure draft is now expected in March 2023 (pre­vi­ously Q1 2023).
• International Tax Reform — Pillar Two Model Rules— Feedback on the exposure draft is expected by April 2023.
• Lack of ex­change­abil­ity (amend­ments to IAS 21) — Final amend­ments to IAS 21 are expected in H2 2023 (pre­vi­ously H1 2023).

Research projects

• Equity Method— A decision on the project direction is expected in April 2023.
• Ex­trac­tive Ac­tiv­i­ties — A decision on the project direction is now expected in H2 2023 (pre­vi­ously Q2 2023).
• Post-im­ple­men­ta­tion Review of IFRS 15— Request for in­for­ma­tion is expected in Q2 2023 (pre­vi­ously H1 2023).
• Post-im­ple­men­ta­tion review — IFRS 9 (Clas­si­fi­ca­tion and mea­sure­ment) — Removed from the work plan since the release of the final project report and feedback statement concluded the project on December 21, 2022.

Strategy & gov­er­nance projects

• ISSB Con­sul­ta­tion on Agenda Pri­or­i­ties— Request for in­for­ma­tion is expected in Q2 2023 (pre­vi­ously H1 2023).

Other projects

• IFRS Sus­tain­abil­ity Dis­clo­sure Taxonomy — The proposed IFRS Sus­tain­abil­ity Dis­clo­sure Taxonomy is expected in H2 2023.

The above is a faithful com­par­i­son of the IASB and ISSB work plan at December 19, 2022 and January 30, 2023 respectively. For access to the current work plan at any time, please click here.