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July 2021

Canada offers to host the ISSB headquarters

Jul 26, 2021

On July 26, 2021, the Trustees of the IFRS Foundation held an additional meeting by video conference to review progress towards the proposed establishment of an International Sustainability Standards Board (ISSB) within the governance structure of the IFRS Foundation.

The Trustees discussed a letter jointly sent by the Government of Canada and a coalition of over 55 Canadian public and private institutions that invites the Trustees to locate the ISSB headquarters in Canada. The letter also notes that a broad coalition of Canadian public and private institutions would provide a "significant 'Welcome Fund'" to fully support the initial period of the ISSB's operations. This financial support would be broad based with no controlling interest and sources fully disclosed and the offer is designed to ensure that there is no condition that would infringe on the IFRS Foundation's independence in the setting of standards.

The Trustees welcomed the support as outlined in the letter and also confirmed they would welcome by the end of August 2021 expressions of interest from other jurisdictions or organizations in providing seed capital for the ISSB and in widening the IFRS Foundation’s global footprint.

Review the following additional information on the IASB's website and on the website of the Government of Canada:

 

Canadian Standard-setting – Readying for the Future

Jul 06, 2021

On July 6, 2021, the Chairs of the AcSB, AASB and PSAB issued a joint press release entitled “Readying for the Future”. As Canada moves through the third wave of COVID-19 with the hope that comes with vaccinations and economic re-opening, these Boards have also been progressing new areas and initiatives in standard setting.

These initiatives include:

  • monitoring progress and engaging in discussions on sustainability reporting standards;
  • a review of standard setting in Canada initiated by their Oversight Councils; and
  • strategic planning.

 Re­view the press release to learn more.  

IASB announces webinar regarding its Third Agenda Consultation

Jul 02, 2021

On July 2, 2021, the IASB announced that it will be holding a webinar on July 14, 2021 in respect of its Third Agenda Consultation. This webinar will provide an overview of the agenda consultation and give participants an opportunity to ask questions.

For the convenience of stakeholders in different time zones, there will be two sessions of the webinar. The morning session will feature Board Member Rika Suzuki and the afternoon session will feature Board Member Nick Anderson, along with technical staff. The same topics will be discussed at both sessions.

For more in­for­ma­tion, see the press release on the IASB’s web­site.

IASB proposes narrow-scope amendment to IFRS 17

Jul 28, 2021

On July 28, 2021, the International Accounting Standards Board (IASB) has published the exposure draft "Initial Application of IFRS 17 and IFRS 9 — Comparative Information (Proposed amendment to IFRS 17)" that would enable companies to improve the usefulness of the comparative information presented on initial application of IFRS 17 and IFRS 9. The deadline for submitting comments is September 27, 2021.

 

Background

Many insurance companies have not yet applied IFRS 9, Financial Instruments and will first apply it at the same time they apply IFRS 17, Insurance Contracts. However, the two standards have different requirements for the comparative information that will be presented on initial application. IFRS 17 requires companies to present one restated comparative period. IFRS 9 permits but does not require restatement of comparative periods, and prohibits companies from applying IFRS 9 to financial assets derecognized in the comparative period.

Some insurers have since raised concerns about the usefulness of the information that would be presented for financial assets in the comparative period on initial application of IFRS 17. They are of the view that such information would be misleading because it would include accounting mismatches that would essentially arise from the continued application of IAS 39 (i.e. would not represent economic mismatches), which would be very difficult to explain. These insurers asked the Board to allow them to present significantly improved information about financial instruments that would result from applying the classification requirements of IFRS 9 at the transition date of IFRS 17.

 

Key proposal

The main proposal in ED/2021/8 Initial Application of IFRS 17 and IFRS 9 — Comparative Information (Proposed amendment to IFRS 17) is a proposed narrow-scope amendment to the transition requirements of IFRS 17 for entities that first apply IFRS 17 and IFRS 9 at the same time. The amendment regards financial assets for which comparative information is presented on initial application of IFRS 17 and IFRS 9, but where this information has not been restated for IFRS 9. Under the proposed amendment, an entity would be permitted to present comparative information about a financial asset as if the classification and measurement requirements of IFRS 9 had been applied to that financial asset before. There are no proposed changes to the transition requirements in IFRS 9.

The deadline for submitting comments on these proposals is September 27, 2021.

 

Effective date

The exposure draft proposes that an entity that elects to apply the amendment shall apply it when it applies IFRS 17.

 

Additional information

 

IASB proposes reduced disclosure requirements for subsidiaries

Jul 26, 2021

On July 26, 2021, the International Accounting Standards Board (IASB) published the exposure draft "Subsidiaries without Public Accountability: Disclosures" that would permit eligible subsidiaries that are small and medium-sized entities (SMEs) to apply IFRS but with reduced disclosure requirements. The deadline for submitting comments is January 31, 2022.

 

Background

As part of the feedback on the 2015 Agenda consultation, some respondents had noted that subsidiaries that are SMEs report to their parent, for consolidation purposes, numbers that apply the recognition and measurement requirements of IFRSs. Using the IFRS for SMEs is not attractive to them as it would mean that they would have to maintain two sets of accounting information. Instead, they would welcome less onerous disclosure requirements as that would reduce costs without removing information needed by the users of their financial statements. They, therefore, suggested that the Board consider developing a reduced disclosure IFRS.

The Board acknowledged these concerns and decided to pursue a project that would analyze adaptations required to the disclosure requirements of the IFRS for SMEs and possibly develop a reduced disclosure IFRS that would allow eligible subsidiaries to apply, in principle, the recognition and measurement requirements of full IFRSs and the disclosure requirements of the IFRS for SMEs with minimal tailoring of those disclosure requirements. A draft of this possible new standard has been published today.

 

Key proposals

The proposals in ED/2021/7 Subsidiaries without Public Accountability: Disclosures aim at entities that

  • (a) do not have public accountability; and
  • (b) are subsidiaries of an ultimate or intermediate parent that produces consolidated financial statements available for public use that comply with IFRSs.

The application of the new proposed IFRS would be optional for subsidiaries that are eligible to apply it (i.e., those that fulfil the preceding two conditions).

Proposed new disclosure requirements

The proposed new standard contains about 200 paragraphs of disclosure requirements listed by standard. For developing these, the Board started with the disclosure requirements in the IFRS for SMEs and tailored those where they differed from those in full IFRSs by adding disclosure requirements for topics or accounting policy options that are addressed in full IFRSs but omitted from the IFRS for SMEs and by deleting disclosure requirements relating to accounting policies available in the IFRS for SMEs but not in full IFRSs.

There are exception to this approach explained in the Basis for in Conclusions of the new standard. They especially relate to:

  • disclosure objectives;
  • investment entities;
  • changes in liabilities from financing activities,
  • exploration for and evaluation of mineral resources; and
  • defined benefit obligations.

An appendix to the proposed new standard lists the disclosure requirements in full IFRSs that would be replaced by the disclosure requirements in the exposure draft.

The proposed new standard does not contain reduced disclosure requirements for IFRS 17, Insurance Contracts. The Board argues that while it found that some entities applying IFRS 17 would be entitled to apply the new standard, IFRS 17 introduces a model for accounting for insurance contracts that is supported by its disclosure requirements. If there were possible reductions, these would be limited in extent. Also, in the early years of applying IFRS 17, the interests of users of the financial statements may be best served by full IFRS 17 disclosures. Hence, a subsidiary that applies the proposed new standard and applies IFRS 17 is required to apply the full disclosure requirements of IFRS 17.

The exposure draft does include reduced disclosure requirements that apply to a subsidiary that is preparing its first IFRS financial statements and has elected to apply the new proposed standard. The exposure draft expressly asks respondents whether they agree with including reduced disclosure requirements for IFRS 1, First-time Adoption of International Financial Reporting Standards in the draft standard rather than leaving the disclosure requirements in IFRS 1 untouched.

The deadline for submitting comments on these proposals is January 31, 2022.

 

Effective date

The exposure draft proposes that an entity may elect to apply the new standard for reporting periods beginning on or after a certain date (approximately 18–24 months after publication) with earlier application permitted. An entity would apply the new standard in the current period but not in the immediately preceding period, however, the entity would provide comparative information for the preceding period for all amounts reported in the current period’s financial statements.

 

Additional information

Review the following additional information:

 

IASB to extend comment period for its proposed amendments to IFRS 13 and IAS 19 and draft guidance for developing and drafting disclosures

Jul 21, 2021

During its July 21, 2021 meeting, the IASB Board members decided to extend the comment period for its Exposure Draft (ED), "Disclosure Requirements in IFRS Standards — A Pilot Approach" to January 12, 2022.

The ED contains proposed guidance for when the IASB is developing and drafting disclosure requirements for future IFRS Standards 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.

Review the press release on the IASB’s website.

IASB virtual workshop recording: Targeted Standards-level Review of Disclosures — recording now available

Jul 12, 2021

On July 12, 2021, the International Accounting Standards Board (IASB) made available a recording of the virtual research workshop held on July 1, 2021 by the IASB Board, in conjunction with the European Accounting Association (EAA) and the European Financial Reporting Advisory Group (EFRAG).

The workshop provided an overview of the Board’s Exposure Draft Disclosure Requirements in IFRS Standards—A Pilot Approach that sets out a proposed new approach to developing and drafting disclosure requirements in IFRS Standards as well as new disclosure requirements for IFRS 13, Fair Value Measurement, and IAS 19, Employee Benefits.

The session was moderated by EAA President Thorsten Sellhorn and included a presentation by the Board’s technical staff and EFRAG; academic reflections from Vicky Kiosse (University of Exeter), Paul André (HEC Lausanne) and Andrei Filip (ESSEC Business School); and a Q&A session addressed by the presenters and Board Member Ann Tarca.

Watch the recording of the workshop. The slide deck is also available.

IASB Webinar: Business Combinations under Common Control, initial questions and comments — recording now available

Jul 12, 2021

On July 12, 2021, the International Accounting Standards Board (IASB) made available a recording of a live webinar on the Discussion Paper, Business Combinations under Common Control, held on June 30, 2021.

At the webinar, Board Member Bruce Mackenzie and technical staff discussed feedback received in the initial outreach activities and addressed some of the frequently asked questions from stakeholders.

Watch the recording of the webinar.

IASB Webinars: Third Agenda Consultation— recording now available

Jul 19, 2021

The International Accounting Standards Board (IASB) held two live webinars on July 14, 2021 to discuss the Board’s Third Agenda Consultation that would help create its next five-year plan. A recording of these webinars is now available

Both sessions of the webinar provided a similar overview of the agenda consultation and answered different audience questions.

Access a recording of the content covered in both webinars. The accompanying slide deck is available here.  

The deadline for comments on the Request for Information re the Third Agenda Consultation is September 27, 2021.

IFRS Foundation’s July 7, 2021 webinars on Trustees' sustainability-related work—recordings now available

Jul 07, 2021

On July 7, 2021, the International Accounting Standards Board (IASB) advised that recordings are now available of the live 7 July 2021 webinars discussing the IFRS Foundation Trustees’ work on creating a proposed new standard-setting board—International Sustainability Standards Board—that would develop sustainability-related disclosure requirements to meet investors' needs.

For fur­ther in­for­ma­tion, re­fer to the announcement on the IASB web­site.

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