Review the report on the CSA's website.

The 2021 U.S. GAAP taxonomy reflects updates as a result of accounting standards and other improvements. The 2021 SEC taxonomy contains improvements based on two SEC final rules. The 2021 XBRL DQC taxonomy includes three new DQCRs.

The taxonomies are subject to final SEC approval, which is expected to be granted in early 2021. For more information, see the press release on the FASB’s Web site.

Please click to access the review through the press release on the FRC website.

The review analyzed a sample of March 2020 interim and annual reports and accounts and found that although companies provided suf­fi­cient in­for­ma­tion to enable a user to un­der­stand the impact COVID-19 had on their per­for­mance, position and future prospects, some - par­tic­u­larly interim reports - would have benefited from more extensive dis­clo­sure.

The FRC reminds companies that they should: 
 

• explain the sig­nif­i­cant judge­ments and estimates made in preparing their accounts and provide mean­ing­ful sen­si­tiv­ity analysis or details of a range of possible outcomes to support any disclosed es­ti­ma­tion un­cer­tainty;
• describe any sig­nif­i­cant judge­ments made in de­ter­min­ing whether there is a material un­cer­tainty about their ability to continue as a going concern;
• ensure that as­sump­tions used in de­ter­min­ing whether the company is a going concern are com­pat­i­ble with as­sump­tions used in other areas of the financial state­ments;
• apply the re­quire­ments of IAS 1 to any ex­cep­tional or similar items, with income statement sub-to­tals com­pris­ing only items recog­nized and measured in ac­cor­dance with IFRS;
• apply existing accounting policies for ex­cep­tional and other similar items to COVID-19 related income and ex­pen­di­ture con­sis­tently and should not split income and expenses between COVID-19 and non-COVID-19 financial statement captions ar­bi­trar­ily; and
• prepare interim reports that provide suf­fi­cient in­for­ma­tion to explain the impact that COVID-19 has had on their per­for­mance, position and future prospects.

For further details, refer to the FRC press release and the Review Report.

Ms Tarca began her speech by talking about what XBRL is and who uses it. She explained about tagging financial statements, the different versions of XBRL, and gave examples of different uses in the US, in the EU, in the UK, in Japan, in Denmark and in Australia.

This led her to four questions: Why have we been slow to embrace digital financial reporting, when the benefits of technological innovation have been profound in other areas of accounting and finance? What does research tell us about the US experience from a company preparer/auditor perspective? Do investors want digital reporting? Are there benefits for capital markets?

On the first question, Ms Tarca explained that when lodging annual reports in XBRL format is not mandatory, listed companies need a compelling case to take on an activity that consumes resources as tagging financial statements will involve software, systems, expertise, staff and consultants.

On the second question, Ms Tarca mentioned experiences at the SEC pointing to some significant problems relating to the accuracy of tagging and excessive or erroneous use of extensions. However, later errors became less prevalent and some ‘learning’ took place.

Turning to the third question, Ms Tarca pointed at the fact that there seems to be low demand from investors for regulators to make tagged data mandatory as the financial data investors use is already digital in many cases as they get it from database providers. Tagging of data would, therefore, likely help the database providers, who could then focus more on ‘standardizing’ and ‘normalizing’ data and providing their various other value-adding activities for their clients.

Finally, in discussing the fourth question, Ms Tarca noted research that concluded that XBRL has the potential to decrease information risk and information asymmetry through greater transparency and leads to reduced information processing costs. However, she warned that because of limited use of XBRL data by financial statement users research in this area is still in its early stages.

Ms Tarca concluded her speech mentioning some opportunities for further research around comparability, quality, financial statement presentation, and disclosures.

Please click to access the transcript of her speech on the IASB website.

The IIF notes that:

• there is growing demand for better ESG disclosure across sectors;
• there are multiple frameworks and expectations, with more on the way. While a proliferation of reporting frameworks in past decades has stimulated innovation in disclosure practices, the rapid mainstreaming of ESG issues in financial markets creates a pressing imperative for consolidation;
• to ensure consistency and comparability across markets and avoid regulatory fragmentation, steps should be taken to develop a harmonized cross-sectoral framework for ESG disclosure across jurisdictions.

Accordingly, the IIF strongly encourages the relevant international standard setting bodies to take practical steps in the coming months towards a harmonized cross-sectoral ESG disclosure framework. While rapid consolidation at the global level is a pressing priority, the IIF believes that the harmonization of expectations should be an iterative, phased process rather than a ‘big bang’.

For further details, refer to the press release and the Report on the IIF's web­site.

Please click to access the publication through the press release on the IIRC website.

IOSCO sees an urgent need to improve the com­plete­ness, con­sis­tency and com­pa­ra­bil­ity of sus­tain­abil­ity reporting and notes that:

Together, the IFRS Foun­da­tion’s con­sul­ta­tion and a parallel col­lab­o­ra­tive ini­tia­tive of an alliance of sus­tain­abil­ity reporting or­ga­ni­za­tions can further efforts to fa­cil­i­tate com­pa­ra­ble high-qual­ity international standards that provide the content that capital markets need, within a trans­par­ent stan­dard-set­ting ar­chi­tec­ture with a robust and inclusive gov­er­nance structure.

IOSCO also believes that robust sus­tain­abil­ity reporting standards, in­ter­con­nected with financial reporting standards, would also support audit and assurance – enhancing the market’s trust in sus­tain­abil­ity dis­clo­sures, and laying the foun­da­tions for mandatory corporate reporting on sus­tain­abil­ity in­ter­na­tion­ally.

Please click to access the full comment letter on the IOSCO website.

If approved by the SEC, the new listing rules would require all companies listed on Nasdaq’s U.S. exchange to publicly disclose consistent, transparent diversity statistics regarding their board of directors. Additionally, the rules would require most Nasdaq-listed companies to have, or explain why they do not have, at least two diverse directors, including one who self-identifies as female and one who self-identifies as either an underrepresented minority1 or LGBTQ+. Foreign companies and smaller reporting companies would have additional flexibility in satisfying this requirement with two female directors.

Review the press release, FAQ and summary of what listed companies need to know about the rule proposal on Nasdaq's website.

The Interim Order, which takes effect in Ontario on July 30, 2020, provides registration and prospectus exemptions for start-up crowdfunding that are substantially similar to the local exemptions in British Columbia, Alberta, Saskatchewan, Manitoba, Quebec, New Brunswick and Nova Scotia.

On February 27, 2020, the CSA published for comment National Instrument 45-110 Start-Up Crowdfunding Registration and Prospectus Exemptions (the Proposed National Instrument), which will replace and harmonize the local start-up crowdfunding exemptions in British Columbia, Alberta, Saskatchewan, Manitoba, Québec, New Brunswick and Nova Scotia (as well as those in Ontario adopted through the Interim Order). The comment period on the Proposed National Instrument ended on July 13, 2020.

The Interim Order can be found on the OSC’s website and remains in effect until the Proposed National Instrument is adopted or until 18 months from the effective date of the order. Other jurisdictions will make corresponding updates to their local guidance documents to include Ontario.

Review the press release on the CSA's website and the interim order on the OSC's website.