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Update – IASB and AcSB extend comment period on Exposure Draft – Disclosure Requirements in IFRS Standards

Jul 30, 2021

On July 30, 2021, the Accounting Standards Board (AcSB) updated its Exposure Draft that corresponds to the IASB’s Exposure Draft to reflect the extended deadline. The IASB extended the comment period for its Exposure Draft to January 12, 2022. The extended comment period will allow more time for preparers to engage in fieldwork and provide feedback on the practical application of the proposals.

Review the exposure draft on the AcSB'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.



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



Exposure Draft – Employee Benefits, Proposed Section 3251

Jul 28, 2021

On July 28, 2021, the Public Sector Accounting Board (PSAB) issued Exposure Draft – “Employee Benefits, Proposed Section 3251,” which outlines principles for the first of several phases of the revised employee benefits standard. In this first phase, the Board focused on discount rate guidance and deferral provisions. Comments are requested by November 25, 2021.

The main features of the Exposure Draft are as follows:

  • Accounting guidance for short-term employee benefits, post-employment benefits, other long-term employee benefits and termination benefits have all been considered in this Exposure Draft.
  • Accounting for defined benefit plans results in a public sector entity recognizing the following amounts in surplus or deficit: current service cost, any past service cost and gain or loss on settlement, and net interest on the net defined benefit liability (asset).
  • Revaluations of the net defined benefit liability (asset) are recognized in net assets and are not reclassified to surplus or deficit in subsequent periods.
  • The discount rate used to discount post-employment benefit obligations is determined based on an assessment of the post-employment benefit plan’s funding status.
  • A simplified approach is used to account for other long-term employee benefits as they are not usually subject to the same degree of uncertainty as the measurement of post-employment benefits. This simplified method does not recognize revaluations in net assets.

Review the exposure draft and In Brief on the PSAB's website.


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.



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:


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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:


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CAQ Alert: Illegal Acts: The External Auditor’s Responsibilities

Jul 26, 2021

On July 26, 2021, the Center for Audit Quality (CAQ) released a resource, "Illegal Acts: The External Auditor’s Responsibilities", to educate users of financial statements on the auditor’s responsibilities in regards to illegal acts under PCAOB auditing standards and how they differ from the auditor’s responsibilities as it relates to fraud.

Recent global corporate fraud scandals such as those related to Wirecard in Germany and Carillion in the United Kingdom have driven a focus by capital market participants on the auditor’s role in identifying and detecting fraud. Certain audit regulators, including the International Auditing and Assurance Standards Board (IAASB) and the Public Company Accounting Oversight Board (PCAOB) have taken action with respect to fraud.

The publication provides an overview of the external auditor's responsibilities with respect to illegal acts and how they differ from fraud, outlining key differences and providing illustrative examples of each.

Review the publication on the CAQ's website.

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IAASB public consultation opens for proposed new standard for audits of financial statements of less complex entities

Jul 23, 2021

On July 23, 2021, the International Auditing and Assurance Standards Board (IAASB) published an exposure draft of its new, stand-alone standard for audits of financial statements of less complex entities. Comments are requested by January 31, 2022.

This landmark new draft standard responds to demands to have a set of high-quality requirements tailored for the needs of less complex entities (LCEs). The new standard for audits of financial statements of LCEs will provide a globally consistent approach at a time where several jurisdictional-specific LCE standards or related initiatives are arising. The release of the exposure draft is part of a broader effort to reduce complexity, improve understandability, and make International Standards on Auditing (ISAs) more scalable and proportionate to circumstances of audited entities.

The standard is relevant to users of financial statements, owners, management and those charged with governance of entities, preparers of financial statements, legislative or regulatory authorities, relevant local bodies with standard-setting authority, professional accountancy organizations, academics, regulators and audit oversight bodies, and auditors and audit firms, among others.

Review the press release and exposure draft on the IAASB's website.


Updated IASB work plan — Analysis (July 2021)

Jul 23, 2021

On July 23, 2021, the International Accounting Standards Board (IASB) updated its work plan following its July 2021 meeting.

Below is an analysis of all changes made to the work plan since our last analysis on June 28, 2021.

Standard-setting projects

Maintenance projects

Research projects

Other projects

The revised IASB work plan is available on the Board's website.


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.


Webinar: Proposals in Exposure Draft Management Commentary

Jul 21, 2021

On July 21, 2021, the International Accounting Standards Board (IASB) released a recording of the Exposure Draft Management Commentary webinar it held on July 13, 2021.

The webinar provides an overview of the Board’s proposals for a new comprehensive framework for preparing management commentary and includes questions from the audience.

Listen to the recording on the IASB's website.

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