September 2023

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IASB issues podcast on latest Board developments (September 2023)

Sep 27, 2023

On September 27, 2023, the IFRS Foundation released a podcast featuring IASB Vice-Chair Linda Mezon-Hutter and Executive Technical Director Nili Shah discussing deliberations at the September 2023 IASB meeting.

Highlights of the podcast include discussions on:

  • the project on climate-related risks in the financial statements that has been re-calibrated to also include "other uncertainties";
  • the conclusion of technical discussions in the project on goodwill and impairment;
  • the rate-regulated activities project;
  • key takeaways from the equity method project;
  • decisions made in the second comprehensive review of the IFRS for SMEs;
  • the direction of the project looking at business combinations under common control; and
  • decisions on the extractive activities project.

Access the podcast on IFRS Foundation website.

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IASB publishes proposals for amendments under its annual improvements project

Oct 16, 2023

On September 12, 2023, the International Accounting Standards Board (IASB) published an exposure draft IASB/AI/ED/2023/1 'Annual Improvements to IFRS Accounting Standards — Volume 11'. It contains proposed amendments to five standards as result of the IASB's annual improvements project. Comments are requested by December 11, 2023.

The IASB uses the annual improvements process to make necessary, but non-urgent, amendments to IFRSs that will not be included as part of another major project.

The exposure draft proposes the following amendments:

 Standard

Subject of proposed amendment

IFRS 1 First-time Adoption of International Financial Reporting Standards

Hedge accounting by a first-time adopter. The proposed amendment addresses a potential confusion arising from an inconsistency in wording between paragraph B6 of IFRS 1 and requirements for hedge accounting in IFRS 9 Financial Instruments.

IFRS 7 Financial Instruments: Disclosures

Gain or loss on derecognition. The proposed amendment addresses a potential confusion in paragraph B38 of IFRS 7 arising from an obsolete reference to a paragraph that was deleted from the standard when IFRS 13 Fair Value Measurement was issued.

IFRS 7 Financial Instruments: Disclosures (implementation guidance only)

Disclosure of deferred difference between fair value and transaction price. The proposed amendment addresses an inconsistency between paragraph 28 of IFRS 7 and its accompanying implementation guidance that arose when a consequential amendment resulting from the issuance of IFRS 13 was made to paragraph 28, but not to the corresponding paragraph in the implementation guidance.

IFRS 7 Financial Instruments: Disclosures (implementation guidance only)

Introduction and credit risk disclosures. The proposed amendment addresses a potential confusion in paragraph IG20C in the implementation guidance accompanying IFRS 7 because that paragraph fails to state that the example does not illustrate all the requirements in paragraph 35M of IFRS 7.

IFRS 9 Financial Instruments

Lessee derecognition of lease liabilities. The proposed amendment addresses a potential lack of clarity in the application of the requirements in IFRS 9 to account for an extinguishment of a lessee’s lease liability that arises because paragraph 2.1(b)(ii) of IFRS 9 includes a cross-reference to paragraph 3.3.1, but not also to paragraph 3.3.3 of IFRS 9.

IFRS 9 Financial Instruments

Transaction price. The proposed amendment addresses a potential confusion arising from a reference in Appendix A to IFRS 9 to the definition of ‘transaction price’ in IFRS 15 Revenue from Contracts with Customers while term ‘transaction price’ is used in paragraphs of IFRS 9 with a meaning that is not necessarily consistent with the definition of that term in IFRS 15.

IFRS 10 Consolidated Financial Statements

Determination of a ‘de facto agent’. The proposed amendment addresses a potential confusion arising from an inconsistency between paragraphs B73 and B74 of IFRS 10 related to an investor determining whether another party is acting on its behalf by aligning the language in both paragraphs.

IAS 7 Statement of Cash Flows

Cost method. The proposed amendment addresses a potential confusion in applying paragraph 37 of IAS 7 that arises from the use of the term ‘cost method’ that is no longer defined in IFRS Accounting Standards.

The exposure draft does not contain proposed effective dates for the proposed amendments as the intention is to decide on these after the exposure period. However, early application of the amendments is proposed to be permitted.

Review the press release and the exposure draft on the IFRS Foundation website.

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IASB to move forward with project on climate-related risks

Sep 21, 2023

On September 21, 2023, the International Accounting Standards Board (IASB) decided to explore ways to improve reporting of climate-related and other uncertainties in the financial statements.

The IASB heard in recent years that climate-related risks are often perceived as remote, long-term risks and may not be appropriately considered in the financial statements and that users need better qualitative and quantitative information about the effect of climate-related risks on the carrying amounts of assets and liabilities reported in the financial statements.

In March 2023, the IASB added a project "Climate-related Risks in the Financial Statements" to its agenda with the first discussions of the project taking place this week. The IASB determined that possible actions resulting from the project would include development of educational materials, illustrative examples and targeted amendments to IFRS Accounting Standards to improve application of existing requirements. The staff will work closely with the ISSB staff to facilitate connections in the Boards’ work. The IASB will also continue to monitor developments to determine whether to take further action.

Finally, the IASB has also decided to rename the project to "Climate-related and Other Uncertainties in the Financial Statements" to stress that the principles-based IASB standards apply to any risk an entity incurs.

Review the news release on the IFRS Foundation website.

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New Zealand External Reporting Board introduces research on intangibles at IFASS meeting

Sep 27, 2023

On September 27, 2023, the International Forum of Accounting Standard Setters (IFASS) held its fall meeting in London. During one presentation, the New Zealand External Reporting Board (XRB) provided insights into research on the disclosure of recognised and unrecognised intangibles. The research, which was conducted in response to an XRB call for research on intangibles, examines the reporting of and disclosures on intangible assets by listed companies and public benefit entities in New Zealand as a mid-sized market.

The research concludes with some observations and suggestions based on the findings:

  • Regarding the large range of terminology in intangible asset reporting one solution could be the use of digital reporting such as Core & More reporting
  • An expense disclosure approach would require mandating specified categories to ensure disclosure
  • Capitalizing currently expensed intangible-related activities would reduce but not eliminate the information gap
  • Aligning intangible asset fair value criteria to IFRS 13 might be a relatively low-cost solution to reduce the information gap
  • Disclosure of unrecognized intangibles would also provide a better understanding of capitalized intangible assets

As a solution to the current unsatisfying reporting of intangibles two measures were suggested for intangibles with partial markets: Allowing the revaluation model as an accounting policy choice and allowing estimation of fair value under IFRS 13 along with appropriate disclosures of judgments and estimates. To achieve this, the IASB could amend IAS 38 to provide alternative criteria to “active market” such as “freely transferable” and “commonly traded”. The IASB could develop indicators to assist entities in determining whether the revaluation model policy choice was available. A longer-term project could be to consider measurement for “unique” intangibles referred to in IAS 38

Access the research on the SSRN website. 

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Updated IASB and ISSB work plan — Analysis (September 2023)

Sep 26, 2023

Following the IASB's and ISSB's September 2023 meetings, we have analysed the work plan on the IFRS Foundation website to see what changes have resulted from the meetings and other developments since the work plan was last revised in July 2023.

Below is an analysis of all changes made to the work plan since our last analysis on July 28, 2023.

Standard-setting projects

Maintenance projects

  • Amendments to the classification and measurement of financial instruments — The next project step is now the publication of final amendments in H1 2024
  • Amendments to the IFRS for SMEs — International tax reform — The next project step is now the publication of final amendments in September 2023
  • Annual Improvements to IFRS Accounting Standards — After the publication of the exposure draft in September 2023, feedback will be discussed in Q1 2024; the following projects are included:
  • Cost Method (Amendments to IAS 7)
  • Credit Risk Disclosures (Amendments to Illustrative Examples accompanying IFRS 7)
  • Determination of a ‘De Facto Agent’ (Amendments to IFRS 10)
  • Disclosure of Deferred Difference Between Fair Value and Transaction Price (Amendments to Illustrative Guidance accompanying IFRS 7)
  • Gain or Loss on Derecognition (Amendments to IFRS 7)
  • Hedge Accounting by a First-time Adopter (Amendments to IFRS 1
  • Lessee Derecognition of Lease Liabilities (Amendments to IFRS 9)
  • Transaction Price (Amendments to IFRS 9)
  • Climate-related and other uncertainties in the financial statements — The project has been renamed; the next project step is now a decision on the project direction expected in H1 2024
  • Lack of exchangeability — The project has been removed from the work plan as final amendments were published in August 2023
  • Power purchase agreements — A project newly added to the work plan; a decision on the project direction is expected in H1 2024

Research projects

Other projects

The above is a faithful comparison of the IASB and ISSB work plan on July 28, 2023 and September 26, 2023.

For access to the current work plan at any time, please click here

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