The evidence the Board is looking for includes:

• responses to consultative documents;
• fieldwork such as assessing systems changes or the hypothetical application of a proposed new financial reporting requirement;
• empirical analysis from studies of reported accounting data, share price relationships and analysts’ forecasts;
• the results of experimental studies;
• analytical modelling; and
• collecting and analyzing views from surveys.

Review the press release on the Board's website.

During its October meeting, the Board discussed the criteria the IASB^® staff have developed for the Board to apply in assessing whether the concerns/issues identified by the staff warrants considering an amendment to IFRS 17. In a podcast, IASB member Darrel Scott noted that a decision is expected in 1-2 months. This is not reflected in the updated work plan yet.

Below is an analysis of all changes that were made to the work plan since our last analysis on September 25, 2018.

Maintenance projects

• Accounting Policies and Accounting Estimates (Amendments to IAS 8) — A decision on the project direction is now expected in December 2018 (was: October 2018)
• Definition of a business (Amendments to IFRS 3) — As the amendments were published on October 22, 2018, this has been removed from the work plan

Research projects

• Disclosure initiative — Principles of disclosure — A project summary is now expected in the first quarter of 2019 (no date given before)

Other projects

• IFRS Taxonomy update — 2018 general improvements — A proposed update is expected in December 2018 (was: fourth quarter of 2018)

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

In the podcast, IASB^® technical manager Roberta Ravelli interviews IASB Board member Darrel Scott. The interview is not so much about the details discussed by the Board, but more of a general and balanced assessment where the Board currently stands. During the meeting, the Board first discussed the criteria the IASB staff have developed for the Board to apply in assessing whether a concern warrants considering an amendment and then used these criteria in a kind of a test run against the 25 concerns/issues identified by the staff. However, no decisions were made.

By way of an outlook, Darrel Scott mentions in the interview that the IASB expects to make a decision in 1-2 months (the November meeting is rather early in the month and the deadline for the staff to submit papers would be at the end of next week). He also mentions that the Board would need to think about the effective date soon, as well as the implications changing the effective date would have.

Review the press release and listen to the podcast on the Board's website.

The IFRS convergence amendments reflect the following International Accounting Standards Board (IASB) amendments:

• Annual Improvements to IFRSs 2011 – 2013 Cycle (issued December 2013)
• Disclosure Initiative (Amendments to IAS 7) (issued January 2016)
• Transfers of Investment Property (Amendments to IAS 40) (issued December 2016)
• Annual Improvements to IFRSs 2014 – 2016 Cycle (issued December 2016)
• IFRIC 22 Foreign Currency Transactions and Advance Consideration (issued December 2016)
• Annual Improvements to IFRS Standards 2015 – 2017 Cycle (issued December 2017)
• Plan Amendment, Curtailment or Settlement (Amendments to IAS 19) (issued February 2018)

Review the final amendments Improvements to IPSAS, 2018 on the IPSASB's website.

The two days will see the presentation of six academic papers, followed either by a response of an academic and an IASB/AASB representative or by a panel discussion. In both cases, the audience will be invited to participate in the discussion. The papers include the following:

• Non-GAAP Earnings and the Earnings Quality Trade-off
• Disclosure Overload? An Empirical Analysis of IFRS Disclosure Requirements
• Equity Financial Assets: A Tool for Earnings Management – A Case Study of Youngor Group
• Accounting for Intangibles: Can Capitalization of R&D Reduce Real Effects and Improve Investment Efficiency?
• Extractive Industries Reporting: A Research Review
• Independently-certified Industry-specific Disclosures to the Capital Market: The JORC Code in the Australian Mining Industry

Review the press release on the Board's website.

The objective of the research project is to consider how to address the following three areas of focus identified in the Post-implementation Review ("the PIR") of IFRS 3 Business Combinations:

1. whether changes should be made to the existing impairment test for goodwill and other non-current, non-financial assets;
2. subsequent accounting for goodwill (including the relative merits of an impairment-only approach and an amortization and impairment approach); and
3. the extent to which other intangible assets should be separated from goodwill.

At its meeting on October 25, 2018, the Board discussed the additional work to be performed in respect of its Goodwill and Impairment project before drafting a discussion paper, and the timing of that work. The Board did not make any decisions.

Previously at its meeting on July 18, 2018, the Board set three research objectives for the research project. One objective is to explore ways to improve disclosure requirements to enable investors to assess whether a business combination was a good investment decision and whether, after the acquisition, the acquired business is performing as was expected at the time of the acquisition. The Board also tentatively decided that the staff should not perform a complete review of all the disclosure requirements in IFRS 3, Business Combinations and IAS 36, Impairment of Assets. Feedback will be obtained from the Board’s consultative groups in November and December and the staff will report back to the Board at a future meeting.

For further details of these and other developments, refer to the project on the IASB’s website.

For details of the staff’s request for the Board to confirm the further work to be performed to achieve the research objective of identifying better disclosures that would enable investors to assess whether a business combination is a good investment decision and whether the acquired business is performing after the business combination as expected – see the  October 2018 Board Paper.

Since IFRS 17 was issued in May 2017, the Board has been monitoring the implementation and has learned about concerns and implementation challenges. There were four papers discussed at the meeting.

The discussion focused on agenda paper 2C, which revealed the criteria the IASB^® staff developed for the Board to use in assessing whether the concerns warrant considering an amendment:

1. the amendment would not result in significant loss of useful information relative to that which would be provided by IFRS 17 for users of financial statements and
2. the amendment would not unduly disrupt the implementation processes that are already under way or risk undue delays in the effective date of a standard that is needed to address many inadequacies in the existing wide range of insurance accounting practices.

In the paper, the staff also noted that even if the Board agrees that any potential amendment to IFRS 17 meets the criteria, it does not mean that all amendments meeting these criteria are justified. The staff also stressed that any changes would affect the effective date.

Here are some of the comments made by the Board:

• amendments need to be necessary, not just to fulfill the criteria;
• what's missing in the criteria is that changes should not compromise the criteria of IFRS 17;
• the Board should deal with implementation issues only, not just anything that is connected with IFRS 17;
• changes should be narrow in scope and should be able to be dealt with efficiently;
• changes to IFRS 17, a final standard, would impact those who have already begun implementing it;
• the Board needs to consider the interaction with IFRS 9;
• do the issues identified relate to material new information or are they issues the Board has considered before?
• investors are waiting for the new standard, there needs to be a high hurdle for changing it;
• benefits of changes need to exceed the costs;
• a lot of work went into the standard;
• a lot of people are waiting for the standard to become effective.

Chairman Hans Hoogervorst concluded the discussion by stating that he had read the papers for the discussion with a heavy heart. He just hoped that the standard would get into place before the next financial crisis - as the markets are very nervous and there is too much debt in the market. He therefore concluded that changes to IFRS 17 should be fine-tuning only and legitimized by decreasing costs. He also added that the whole package of issues should be looked at and that 25 issues were too many.

Review the press release and meeting papers meeting papers on the Board's website and a more detailed summary on our Global IAS Plus website.

The letter draws on findings from the FRC’s work on corporate governance and corporate reporting in Annual Review of Corporate Governance and Reporting 2017/18. It also refers to topical areas of reporting, including the UK’s exit from the EU.

Review the press release and the letter on the FRC's website.

This year’s report aims to show how companies are linking reporting and decision-making through three topic-specific addendum reports focused on climate change, water and human rights.

Key findings from Reporting matters 2018

The main Reporting matters publication continues to provide good-practice examples as well as general trends and benchmarks over the past five years. This is particularly useful to business because insights can be shared across sectors for collective improvement.

Highlights include:

Reporting is improving

• 82% of member companies in our benchmark have improved their overall scores since baseline year 2014; 37% have improved their materiality score in this timespan.

The state of SDG reporting

• 89% of reports reviewed acknowledge the Sustainable Development Goals (SDGs) in some way; 53% map their sustainability strategy to relevant SDGs and provide some evidence of activities.

The state of integrated reporting

• 33% of reports reviewed combine financial and non-financial information, up from 22% in 2014; 18% are self-declared integrated reports.

The state of GRI reporting

• 83% of reports reviewed reference the Global Reporting Initiative (GRI); 54% have already transitioned to the GRI Standards launched in October 2016.

Governance is improving

• 39% of the 115 companies in our sample with ESG data on Bloomberg Terminals have links between sustainability performance and executive remuneration.

The future is digital

• Only 20% of reports reviewed provide a digital-first experience; but 53% of member companies include the bulk of their report content online to complement their PDF report (2017: 44%).

Review the press release and report on the WBCSD's website.

Background

The post-implementation review of IFRS 3, Business Combinations revealed that entities have difficulties when determining whether they have acquired a business or a group of assets. As the accounting requirements for goodwill, acquisition costs and deferred tax differ on the acquisition of a business and on the acquisition of a group of assets, the IASB decided to issue narrow scope amendments aimed at resolving the difficulties that arise when an entity is determining whether it has acquired a business or a group of assets.

Changes

The amendments in Definition of a Business (Amendments to IFRS 3) are changes to the implementation guidance of IFRS 3 only. They:

• clarify that to be considered a business, an acquired set of activities and assets must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs;
• narrow the definitions of a business and of outputs by focusing on goods and services provided to customers and by removing the reference to an ability to reduce costs;
• add guidance and illustrative examples to help entities assess whether a substantive process has been acquired;
• remove the assessment of whether market participants are capable of replacing any missing inputs or processes and continuing to produce outputs; and
• add an optional concentration test that permits a simplified assessment of whether an acquired set of activities and assets is not a business.

Interaction with the FASB

The amendments note that IFRS 3 is the result of a joint project between the IASB and the Financial Accounting Standards Board (FASB) and the business combinations requirements under IFRS^® Standards and US GAAP are substantially converged. However, even though the FASB (that had received similar feedback) and the IASB have worked together to respond to problems with the definition of a business, the IASB amendments to the application guidance of IFRS 3 are different from the amendments issued by the FASB in 2017. Nevertheless, the IASB expects that the amendments in conjunction with the FASB amendments will lead to more consistency in applying the definition of a business between entities applying IFRS Standards and entities applying US GAAP.

Effective date and transition requirements

The amendments are effective for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after January 1, 2020 and to asset acquisitions that occur on or after the beginning of that period. Earlier application is permitted.

Review the press release on the IASB's website.