These amendments are intended to strengthen and modernize the requirements for the confirmation process by describing principles-based requirements for all methods of confirmation, including paper-based and electronic means of communications.

According to PCAOB’s Chair Erica Williams’s, “the new standard, which replaces a standard that had not been significantly updated in twenty years, is also a big step forward as the Board continues to execute its strategic goal of modernizing PCAOB standards.”

Access the order on SEC’s website.

Earlier this year, the ISSB Standards were endorsed by the global body for international securities regulators—IOSCO—and since then companies, jurisdictions, and other market players from around the world have been paving the way towards adopting or using the ISSB Standards.

Corporate membership groups representing thousands of companies globally have signed the statement, joined by more than 140 companies preparing public disclosures who also chose to demonstrate support directly. Companies have been calling for standards that enable them to communicate to investors comprehensive information about their climate resilience strategy.

The ISSB’s key partners in the sustainability disclosure landscape including the Global Reporting Initiative (GRI), CDP and the Taskforce on Nature-related Financial Disclosures (TNFD) also reaffirmed their support for the work of the ISSB. The ISSB continues to work closely with these partners to reduce market fragmentation in the sustainability disclosure landscape. 

Review the press release on the IFRS website.

ISO 14000 Environmental management and greenhouse gas emission standards aid companies in fulfilling sustainability and climate commitments, facilitating alignment with IFRS S2 disclosures. Firms with these management system standards are well-positioned to engage with investors using ISSB Standards.

As ISO Standards support consistent approaches internationally in the internal management of sustainability-related matters, ISO supports the work of the ISSB to establish a truly global baseline of sustainability-related financial disclosures.

Furthermore, ISO and the IFRS Foundation are committed to advancing capacity building initiatives that focus on supporting organisations to build internal expertise and understanding that advance practices and reporting.

Access the press release on the IFRS website.

IAS 32 Financial Instruments: Presentation sets out how a company that issues financial instruments should distinguish debt instruments from equity instruments. The distinction is important because the classification of the instruments affects the depiction of a company’s financial position and performance.

IAS 32 works well for most financial instruments. However, the instruments have evolved since this IFRS Accounting Standard was initially issued—they are more complex and present new reporting challenges for companies. Companies’ solutions to the reporting challenges differ, resulting in diverse accounting practices that make it difficult for investors to assess and compare companies’ financial position and performance. Investors are calling for better information, particularly about equity instruments.

To address these challenges, the proposals in the Exposure Draft would amend IAS 32, IFRS 7 Financial Instruments: Disclosures, and IAS 1 Presentation of Financial Statements.

The IASB proposes:

• to clarify the underlying classification principles of IAS 32 to help companies distinguish between debt and equity;
• to require companies to disclose information to further explain the complexities of instruments that have both debt and equity features; and
• to issue new presentation requirements for amounts—including profit and total comprehensive income—attributable to ordinary shareholders separate to the amounts attributable to other holders of equity instruments.

Comments on the proposed changes are requested by March 29, 2024.

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

The introduction to the guidance notes:

“With the introduction of mandatory climate-related disclosures climate reporting entities will need to help users understand whether, how, and to what extent, climate-related matters are reflected in an entity's financial statements. Financial statements and climate-related disclosures supplement and complement each other and together should present a coherent picture”

The publication analyses the coherence between financial statements and climate-related disclosures in three broad chapters:

1. Impact of climate-related matters in financial statements
2. Coherence between financial statements and climate-related disclosures
3. Differences between financial statements and climate-related disclosures

It also offers an appendix on the coherence principle.

Access the XRB guide here

Specifically, the podcast discusses:

• ISSB’s first meeting at its Beijing office and the first Beijing International Sustainability Conference.
• GRI’s Sustainability Innovation Lab.
• Foundational work keeping technical staff busy.
• Technical discussions at November board week.

Access the podcast on Youtube.

Below is an analysis of all changes made to the work plan since our last analysis on October 30, 2023

Standard-setting projects

• Management Commentary — A decision on the project direction is expected in Q2 2024 (previously H1 2024)
• Primary Financial Statements — An IFRS Accounting Standard is expected in Q2 2024 (previously H1 2024)

Strategy and Governance

• ISSB Consultation on Agenda Priorities — The feedback on the request for information is now expected in January 2024 (previously December 2023)

Maintenance projects

• Addendum to the Exposure Draft Third edition of the IFRS for SMEs Accounting Standard— The project has been added to the work plan to reflect amendments issued by the IASB in 2023 with an exposure draft expected in H1 2024
• Annual Improvements to IFRS Accounting Standards — The following projects will have feedback discussions on their exposure draft in January 2024 (previously Q1 2024):
  • Cost Method (Amendments to IAS 7)
  • Derecognition of Lease Liabilities (Amendments to IFRS 9)
  • Determination of a ‘De Facto Agent’ (Amendments to IFRS 10)
  • Disclosure of Deferred Difference between Fair Value and Transaction Price (Amendments to Guidance on implementing IFRS 7)
  • Gain or Loss on Derecognition (Amendments to IFRS 7)
  • Hedge Accounting by a First-time Adopter (Amendments to IFRS 1)
  • Introduction and Credit Risk Disclosures (Amendments to Guidance on implementing IFRS 7)
  • Transaction Price (Amendments to IFRS 9)

Research projects

• Business Combinations under Common Control — At its November 2023 meeting, the IASB decided to discontinue this project; a project summary is expected in Q2 2024
• Post-implementation Review of IFRS 15 — Request for information feedback is expected for January 2024 (previously Q1 2024)
• Post-implementation Review of IFRS 9 — After discussing the feedback received at its November 2023 meeting, the IASB will now publish a project summary (expected in H2 2024)

Other projects

• IFRS Accounting Taxonomy Update — Amendments to IAS 12, IAS 21, IAS 7 and IFRS 7 — Feedback received will be discussed in January 2024 (previously Q1 2024)
• IFRS Accounting Taxonomy Update — Common Practice (Financial Instruments) and General Improvements — Feedback discussions on the proposed IFRS Taxonomy Update published in November 2023 are expected in Q1 2024
• IFRS Sustainability Disclosure Taxonomy — Discussion of the proposed taxonomy feedback is now expected in December 2023 (previously November 2023)

The above is a faithful comparison of the IASB and ISSB work plan on October 30, 2023 and November 20, 2023.

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

The proposed Guideline would address the accounting for life insurance contracts that contain a cash surrender component, from the policy owner’s point of view. The proposed Guideline includes guidance on recognition and measurement of cash surrender value of a life insurance policy, presentation of policy premiums and changes in cash surrender value, and disclosures.

The proposed Guideline:

• requires recognition of cash surrender value as an asset measured at the amount that would be immediately realized by the policy holder if the policy were terminated prior to the death of the insured
• requires presentation of policy premiums and change in cash surrender value on a net basis, where a net debit is reported as expense and a net credit is reported as income; and
• establishes disclosure requirements, including disclosure of cash surrender value in aggregate for all life insurance policies with cash surrender value and the amounts of acquisitions and terminations of life insurance policies during the period

The response deadline is January 31, 2024.

Access the exposure draft on the FRAS Canada website.

While the FRC identified examples of good practice, there is scope for improvement under IFRS 17 in the following key areas:

• Providing quantitative and qualitative disclosures, that are company-specific, enabling users to understand how insurance contracts are measured and presented in the financial statements.
• Ensuring that accounting policies are sufficiently granular and provide clear, consistent explanations of accounting policy choices, key judgements and methodologies, particularly where IFRS 17 is not prescriptive.
• Avoiding any boiler plate wording - narrative should always reflect the company’s particular circumstances.

The full review is available on the FRC website.

On November 6, 2023, the IFRS Foundation issued a proposed IFRS Taxonomy Update, 'IFRS Accounting Taxonomy 2023 — Proposed Update 2 'Common Practice for Financial Instruments, General Improvements and Technology Update''.

The proposed changes reflect:

• common reporting practice relating to the presentation of financial instruments in digital financial statements prepared by banking institutions using IFRS Accounting Standards; 
• general improvements; and
• updates to the IFRS Accounting Taxonomy’s technology

Comments are requested by January 5, 2024.

Refer the proposed changes in the press release on the IFRS Foundation website.