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News

IFRS - IASB Image

Webinar series on disclosure requirements in IFRS Standards — recording of first webinar available

Jun 02, 2021

On June 2, 2021, the IFRS Foundation released a recording of a webinar on the IASB exposure draft "Disclosure Requirements in IFRS Standards — A Pilot Approach".

Listen to the recording of the first webinar providing an overview of the Board’s proposals on the IASB's website.

IAASB - Assurance Image

Newly published stakeholder feedback indicates broad support for IAASB auditor reporting standards

Jun 02, 2021

On June 2, 2021, the International Auditing and Assurance Standards Board (IAASB) published a feedback statement after a public consultation. Stakeholders expressed broad support for the standards, and the resulting auditor’s report, and indicated that the standards have met the IAASB’s objectives.

The stakeholder feedback statement summarizes key themes and views shared with the IAASB through the 2020 Auditor Reporting Post-Implementation Survey as well as a roundtable discussion held in September 2020. The survey, roundtable, and related outreach solicited perspectives on implementation and specific aspects of the revised auditor reporting standards. Three of the key areas of focus for stakeholders were key audit matters, going concern and other information in the auditor’s report. The IAASB’s Auditor Reporting Implementation Working Group is considering the feedback in developing its post-implementation review recommendations for the IAASB’s consideration in September 2021.

Review the press release on the IAASB's website.

PSAS - IPSASB Image

Updated IPSAS-IFRS alignment dashboard

Jun 01, 2021

On June 1, 2021, the International Public Sector Accounting Standards Board (IPSASB), which develops the International Public Sector Accounting Standards (IPSAS) for financial reporting by governments and other public sector entities, released an updated IPSAS-IFRS alignment dashboard showing how far individual IPSAS are aligned with corresponding IFRS Standards.

Access the updated alignment dashboard prepared for the June 2021 IPSASB meeting on the IPSASB website.

In this context, review our Global  2021 edition of IPSAS in your pocket published in February.

IFRS - AcSB Image

2020 changes to Part I

Jun 01, 2021

On June 1, 2021, the Accounting Standards Board (AcSB) released a document summarizing the endorsement activities carried out as part of its due process in support of the changes made to IFRS Standards in Part I of the CPA Canada Handbook – Accounting in 2020.

The 2020 changes made to Part I to incorporate new or amended IFRS Standards, as well as the Board’s endorsement activities for each change, is summarized in Appendix 1.

The 2020 changes to Part I include COVID-19-Related Rent Concessions, Interest Rate Benchmark Reform – Phase 2, amendments to IFRS 17 Insurance contacts, and more.

Review the press release and changes on the AcSB's website.

IESBA (International Ethics Standards Board for Accountants) (lt gray) Image

Deadline extended for IESBA’s long association post-implementation review stakeholder survey

May 28, 2021

On May 28, 2021, the International Ethics Standards Board for Accountants (IESBA) extended the closing date for stakeholders to submit responses to its Long Association Post-Implementation Review (LAPIR) questionnaire to June 30, 2021.

The questionnaire seeks stakeholder feedback on key matters relating to Phase 1 of the LAPIR. This feedback will help inform the IESBA’s review of the implementation of the five-year cooling-off requirement for engagement partners on audits of public interest entities in the International Independence Standards. This review is being undertaken before the “jurisdictional provision” in the Long Association standard expires for audits of financial statements for periods beginning on or after December 15, 2023. The jurisdictional provision permits jurisdictions to apply a cooling-off period less than five years subject to specified conditions.

Review the press release on the IESBA's website.

IFRS - IASB Image

Updated IASB work plan — Analysis (May 2021)

May 28, 2021

On May 28, 2021, the International Accounting Standards Board (IASB) updated its work plan following its May 2021 meeting.

Below is an analysis of all changes made to the work plan since our last analysis on April 30, 2021.

Standard-setting projects

  • Management commentary —  ED/2021/6 was published on 27 May 2021 with comments requested by 23 November 2021; feedback to the exposure draft is expected to be discussed in H1 2022
  • Rate-regulated activities — feedback to the exposure draft is now expected to be discussed in Q4 2021 (previously H2 2021)

Maintenance projects

Research projects

  • Extractive Activities — a decision on the project direction is now expected in July 2021 (previously Q3 2021)
  • Goodwill and Impairment — feedback on the discussion paper was discussed at the IASB's May meeting; a decision on the future project direction is expected in Q3 2021
  • Post-implementation Review of IFRS 10-12 — feedback on the request for information is now expected to be discussed in July 2021 (previously Q3 2021)

Other projects

  • no changes

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

IFRS - IASB Image

IASB supports narrow-scope amendment to IFRS 17

May 27, 2021

At its meeting on May 27, 2021, the IASB discussed the presentation of comparative information on initial application of IFRS 17 and IFRS 9. Insurers raised concerns about an accounting mismatch between financial assets and insurance contract liabilities that could arise from the continued application of IAS 39. The staff suggested the Board could consider adding a specific transition requirement to IFRS 17 to enable insurers to present comparative information on a basis that is consistent with how IFRS 9 would be applied going forward, without unnecessarily disturbing the transition requirements in IFRS 9.

The majority of Board members and all Board members who participated in the discussion agreed that something should be done. When discussing the staff's analysis, they stressed that

  • communication about this possible narrow-scope amendment is very important,
  • they had been aware of the problem, but not of its magnitude,
  • evidence provided by the insurers has become much more well-founded because implementation is progressing,
  • the amendment would be very specific and narrow-scope, so this is not "opening IFRS 17 up again",
  • the stable platform for IFRS 17 is very important, however, this possible amendment is smoothing implementation, rather than disrupting it,
  • while the optionality of the amendment would mean a decrease of comparability between companies, comparability within the financial statements of the individual companies increases.

The staff will bring back detailed proposals for the possible narrow-scope amendment at a future meeting.

IFRS - IASB Image

IASB publishes exposure draft of revised Practice Statement on Management Commentary

May 27, 2021

On May 27, 2021, the International Accounting Standards Board (IASB) published the exposure draft "Management Commentary" in an effort to update the 2010 IFRS Practice Statement 1 "Management Commentary". Comments are requested by November 23, 2021.

 

Background

At its meeting in March 2017, the IASB generally agreed that they should be playing a more active role in wider corporate reporting. At the meeting in November 2017, the Board members decided preliminarily that being the specialists in financial reporting they are best placed to provide the link between financial and non-financial information and the best way forward would be to revise the Management Commentary Practice Statement so that it could serve as an anchoring point for other frameworks. One of the key points to address would be to promote alignment between financial and ‘other’ information disclosed by an entity.

Since the IASB's decision to revise the Practice Statement, reporting on sustainability and ESG aspects has gained a lot of traction and the information needs of investors and creditors have evolved. Independently of the IASB’s work on management commentary, the Trustees of the IFRS Foundation have taken up an initiative on sustainability reporting and are currently considering setting up a board for setting IFRS sustainability standards. The IASB's project on management commentary and the initiative of the IFRS Foundation are connected in that entities would be able to use the standards issued by the new sustainability standards Board to to help them identify some of the information needed to comply with the revised Practice Statement

 

Key proposals

The proposals in ED/2021/6 Management Commentary are divided into three parts, each of which has several subsections:

  • Part A — General requirements. This part specifies requirements for identifying management commentary and the related financial statements, for authorizing management commentary and for including a statement of compliance. It also sets out the objective of management commentary. Key proposals are:
    • Management commentary identifies the financial statements to which it relates. If the related financial statements are not prepared in accordance with IFRSs, the management commentary would disclose the basis on which the financial statements are prepared.
    • Management commentary that complies with all requirements of the Practice Statement includes an explicit and unqualified statement of compliance.
    • Management commentary that complies with some, but not all, of the requirements of the Practice Statement may include a qualified statement of compliance that identifies the departures from the requirements of the Practice Statement and gives the reasons for those departures.
    • The objective of management commentary is to provide information that enhances investors' and creditors’ understanding of the entity’s financial performance and financial position reported in its financial statements and provides insight into factors that could affect the entity’s ability to create value and generate cash flows across all time horizons, including in the long term.
  • Part B — Areas of content. This part specifies six areas of content for management commentary, and requires management commentary to provide information that meets disclosure objectives for each of those areas of content. It also includes the requirement that management commentary should focus on key matters. Key proposals are:
    • The proposed six areas of content are:
      • the entity’s business model,
      • management’s strategy for sustaining and developing the entity’s business model,
      • the entity’s resources and relationships,
      • risks to which the entity is exposed,
      • the entity’s external environment, and
      • the entity’s financial performance and financial position.
    • The proposed disclosure objectives for the areas of content are:
      • a headline objective describing the overall information needs of investors and creditors for the area of content,
      • assessment objectives describing the assessments that rely on information provided for the area of content, and
      • specific objectives describing the detailed information needs of investors and creditors for the area of content.
    • Key matters that management commentary should focus on are:
      • key features of the entity’s business model,
      • key aspects of management’s strategy,
      • key resources and relationships,
      • key risks,
      • key factors and trends in the external environment, and
      • key aspects of financial performance and financial position.
    • Generally, an entity would report on matters that could affect the entity’s long-term prospects, on intangible resources and relationships, and on environmental and social matters.
  • Part C — Selection and presentation of information. This part contains guidance on the selection of information to include in management commentary and the presentation of that information. Key proposals are:
    • In the context of management commentary, information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that investors and creditors make on the basis of the management commentary and of the related financial statements.
    • Identifying material information requires management to apply judgement.
    • Information about a matter may be material because of the nature or magnitude of that matter, or a combination of both.
    • Information about possible future events that have not yet affected the entity’s financial performance or financial position may be material depending on the potential effects of the events on the amount and timing of the entity’s future cash flows.
    • Materiality judgements need to be reassessed each reporting period.
    • Information provided in management commentary must be complete, balanced, accurate as well as clear and concise.
    • Information in management commentary is more useful if it is comparable, verifiable, and coherent.
    • Metrics used to describe material information in management commentary should be derived from metrics that management uses to monitor key matters and to measure progress in managing those matters.

The deadline for submitting comments on these proposals is November 23,  2021.

 

Effective date and status of the Practice Statement

The exposure draft proposes that the Practice Statement would supersede IFRS Practice Statement 1 Management Commentary for annual reporting periods beginning on or after the date of its issue. The Practice Statement is not an IFRS and its application is not mandatory. Financial statements can comply with IFRSs even if they are not accompanied by management commentary or if they are accompanied by management commentary that does not comply with the Practice Statement.

 

Additional information

Review the following additional information on the IASB's website:

 

Securities - CSA Image

Canadian securities regulators publish final rule for non-GAAP and other financial measures

May 27, 2021

On May 27, 2021, the Canadian Securities Administrators (CSA) published disclosure requirements for issuers that disclose non-GAAP (generally accepted accounting principles) and other financial measures on a voluntary basis. The rule improves the quality of information provided to investors for various financial measures that commonly lack standardized meaning.

National Instrument 52-112 Non-GAAP and Other Financial Measures Disclosure will:

  • Apply to all reporting issuers, except investment funds and certain foreign issuers;
  • Apply to non-reporting issuers for certain offering documents and transactions;
  • Require specified disclosure for certain financial measures presented outside the financial statements, such as non-GAAP financial measures and supplementary financial measures, (as defined in the final rule); and
  • Apply to disclosures for a financial year ending on or after October 15, 2021 (for reporting issuers) and for certain offering documents or transactions filed after December 31, 2021 (for non-reporting issuers). 

The final rule incorporates feedback to clarify and streamline the application and disclosure requirements. Prior to adopting the final rule, issuers should continue to refer to Staff Notice 52-306 (Revised) Non-GAAP Financial Measures, which will be withdrawn when transition to the final rule is complete. The final rule will come into effect on August 25, 2021.

Review the press release on the CSA's website and National Instrument 52-112 on the OSC's website.

All - Deloitte Image

House panel approves proposal to require country-by-country financial reporting

May 26, 2021

The House Financial Services Committee has approved legislation that would direct the Securities and Exchange Commission to require publicly traded corporations with annual revenue of USD 850 million or more to disclose certain tax and nontax information on a country-by-country basis.

These reports would include basic information from a corporation on each of its subsidiaries, and country-by-country financial information that aggregates all of its subsidiaries in each country—including profits, taxes, employees, and tangible assets.

Review the full article.

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