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News

IFRS - IASB Image

IASB pushes publication of management commentary ED to May

Apr 07, 2021

On April 7, 2021, the International Accounting Standards Board (IASB) released a statement that the exposure draft (ED) for a revised Practice Statement 1 "Management Commentary" is now expected to be published in May 2021.

Since the IASB's deliberations in the project have already been completed, the shift in publication date must be attributed to an attempt to balance out comment letter periods on different consultations.

During the March 2021 IASB meeting, which discussed the comment letter period for the management commentary ED, the IASB noted the difficult balance and the constraints on respondents' capacities:

  • The IASB has several consultation documents outstanding and plans to publish several more.
  • The COVID-19 pandemic has placed constraints on stakeholder resources.
  • Respondents to the ED may also develop responses to forthcoming proposals by the Trustees to change the Foundation’s Constitution to form an international sustainability reporting standards board within the existing governance structure of the IFRS Foundation and may find it difficult to respond to both documents at the same time.

Review the press release on the IASB's website.

IAASB - Assurance Image

New IAASB guidance helps advance assurance for non-financial reporting

Apr 06, 2021

On April 6, 2021, the International Auditing and Assurance Standards Board (IAASB) published "Non-Authoritative Guidance on Applying ISAE 3000 (Revised) to Extended External Reporting (EER) Assurance Engagements". This marks a significant step forward in supporting assurance for non-financial reporting.

The Guidance responds to ten key stakeholder-identified challenges commonly encountered in applying International Standard on Assurance Engagements 3000 (Revised), Assurance Engagements Other than Audits or Reviews of Historical Financial Information. The guidance promotes consistent high-quality application of ISAE 3000 (Revised) in extended external reporting assurance engagements to:

  • strengthen the influence of such engagements on the quality of extended external reporting;
  • enhance trust in the resulting assurance reports; and
  • increase the credibility of extended external reports so that they can be trusted and relied upon by their intended users.

The Guidance addresses a number of overarching matters, including applying appropriate competence and capabilities, exercising professional skepticism and professional judgement, and the preconditions for an assurance engagement, as well as more specific technical matters. The Guidance also provides further explanation and examples to better understand the distinction between limited assurance and reasonable assurance engagements.

Review the press release and publication on the IAASB's website.

IFRS - AcSB Image

AcSB extends comment period on Exposure Draft, Regulatory Assets and Regulatory Liabilities

Apr 06, 2021

On April 6, 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 July 30, 2021.

Stakeholders who would like their feedback considered prior to the AcSB finalizing its comment letter are encouraged to submit comments to the AcSB by July 15, 2021.

Review the exposure draft on the AcSB's website.

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

IESBA initiates first phase of the post-implementation review of its long association international independence standard

Apr 01, 2021

On April 1, 2021, the International Ethics Standards Board for Accountants (IESBA) released an update on its Long Association Post-Implementation Review (LAPIR).

This update provides an overview of Phase 1 of the LAPIR which will review the implementation of a specific partner rotation provision for engagement partners around the world with respect to audits of public interest entities. Phase 1 commences with information gathering activities. Phase 2 is due to commence in Q2 2023.

Review the press release and update on the IESBA's website.

PSAS - PSAB Image

In Brief – Public Private Partnerships, Section PS 3160

Apr 01, 2021

On April 1, 2021, the Public Sector Accounting Board (PSAB) released an overview of PSAB’s new standard on Public Private Partnerships issued in April 2021, which addresses the accounting and reporting of infrastructure procured through public private partnership arrangements.

Review the In Brief on the PSAB's website.

IFRS - IASB Image

IASB extends practical relief regarding COVID-19-related rent concessions

Mar 31, 2021

On March 31, 2021, the International Accounting Standards Board (IASB) published "Covid-19-Related Rent Concessions beyond 30 June 2021 (Amendment to IFRS 16)" that extends, by one year, the May 2020 amendment that provides lessees with an exemption from assessing whether a COVID-19-related rent concession is a lease modification.

 

Background

In May 2020, the IASB issued Covid-19-Related Rent Concessions (Amendment to IFRS 16). The pronouncement amended IFRS 16, Leases to provide lessees with an exemption from assessing whether a COVID-19-related rent concession is a lease modification. On issuance, the practical expedient was limited to rent concessions for which any reduction in lease payments affects only payments originally due on or before June 30, 2021.

Since lessors continue to grant COVID-19-related rent concessions to lessees and since the effects of the COVID-19 pandemic are ongoing and significant, the IASB decided to extend the time period over which the practical expedient is available for use.

 

Changes

The Changes in Covid-19-Related Rent Concessions beyond 30 June 2021 (Amendment to IFRS 16) amend IFRS 16 to

  1. permit a lessee to apply the practical expedient regarding COVID-19-related rent concessions to rent concessions for which any reduction in lease payments affects only payments originally due on or before June 30, 2022 (rather than only payments originally due on or before June 30, 2021);
  2. require a lessee applying the amendment to do so for annual reporting periods beginning on or after April 1, 2021;
  3. require a lessee applying the amendment to do so retrospectively, recognizing the cumulative effect of initially applying the amendment as an adjustment to the opening balance of retained earnings (or other component of equity, as appropriate) at the beginning of the annual reporting period in which the lessee first applies the amendment; and
  4. specify that, in the reporting period in which a lessee first applies the amendment, a lessee is not required to disclose the information required by paragraph 28(f) of IAS 8.

 

Effective date

The amendment is effective for annual reporting periods beginning on or after April 1, 2021 (earlier application permitted, including in financial statements not yet authorized for issue at the date the amendment is issued).

 

Dissenting opinion

The final amendment includes a joint dissenting opinion by Board members Nick Anderson and Zachary Gast. They voted against publication of the final amendments noting that when the practical expedient was initially offered, its application was limited to a very specific timeframe. Extending the period during which the practical expedient is available does further impede comparability between lessees that apply the practical expedient and those that do not. They also note that support from users of financial statements for the original amendment was based on limiting the practical expedient to a specific time frame. In addition, they highlight that lessees are no longer applying IFRS 16 for the first time.

 

Additional information

 

IOSCO Image
Leaf - sustainability (green) Image

IOSCO sets up working group to support the IFRS Foundation sustainability initiative

Mar 31, 2021

On March 31, 2021, the International Organization of Securities Commissions (IOSCO) announced the establishment of a new Technical Expert Group (TEG) under its Sustainable Finance Task Force (STF) that will work closely with the IFRS Foundation’s working group on its sustainability project.

The new TEG will be tasked with reviewing and assessing technical recommendations focused on enterprise value creation that will be developed the working group recently set up by the IFRS Foundation to prepare for a potential international Sustainability Standards Board (SSB). The working group's tasks also include planned work to further refine the prototype climate-related disclosure standard, its content, and industry-specific metrics. IOSCO has been invited to join the IFRS Foundation working group as an observer.

Review the announcement of the new TEG on the IOSCO's website.

Securities - ASC Image

Alberta and Saskatchewan securities regulators adopt new self-certified investor prospectus exemption

Mar 31, 2021

On March 31, 2021, the Alberta Securities Commission (ASC) and the Financial and Consumer Affairs Authority of Saskatchewan (FCAA) adopted a new prospectus exemption designed to provide greater access to capital for Alberta and Saskatchewan businesses and broaden investment opportunities for Alberta and Saskatchewan investors.

The new prospectus exemption outlines that investors who certify to having certain financial and investment knowledge, and acknowledge that they understand certain investment considerations and risks, are permitted to invest alongside accredited investors. To mitigate the risks of investing, self-certified investors are limited, in a calendar year, to investments of $10,000 in any one issuer and $30,000 across multiple businesses. The investment limits won't apply to an investment in an issuer listed on a Canadian stock exchange that is complying with its ongoing reporting obligations, provided that the investor has received suitability advice with respect to the investment. The exemption is being implemented on a three-year pilot basis.

Review the press release and details of the new exemption Multilateral CSA Notice of Implementation Alberta and Saskatchewan Orders 45-538 Self-Certified Investor Prospectus Exemption on the ASC’s website.

US_SEC Image

Financial Reporting and Auditing Considerations of Companies Merging with SPACs

Mar 31, 2021

Acting SEC Chief Accountant Paul Munter issued this statement to emphasize the complex financial reporting & audit considerations that come into play with these transactions.

Review the statement on the SEC's website.

IFRS - IASB Image

IASB launches third agenda consultation on its future work programme

Mar 30, 2021

On March 30, 2021, the International Accounting Standards Board (IASB) launched its third public consultation to seek broad public input on the strategic direction and overall balance of its future work programme by publishing a request for information. Comments are requested by September 27, 2021.

 

Introduction

The request for information includes an introductory section that states the objective of the request for information and describes how responses will help the Board in determining its future work programme. The introduction also explains the difference between the IFRS Foundation's five-yearly review of structure and effectiveness that is currently underway and that includes a consultation on sustainability reporting and the IASB's agenda consultation. The IASB's agenda consultation seeks feedback on the priorities of activities within the current scope of the Board’s work, whereas the Trustees’ consultation seeks feedback on a potential expansion in the role of the IFRS Foundation. The IASB is currently working on its management commentary project and could do more on sustainability aspects, should stakeholders wish so, as long as this is connected to financial statements. While there is some connecting middle ground, respondents should not confuse the two initiatives. As the IFRS Foundation Trustees move forward quickly with their initiative, their decisions would be available before the Board makes decisions on its future agenda.

 

Request for information

The request for information consists of three parts: (1) strategic direction and balance of the Board's activities, (2) criteria for assessing the priority of projects that could be added to the work plan, and (3) financial reporting issues that could be added to the Board’s work plan.

Strategic direction and balance of the Board's activities

Part one of the request for information regarding the strategic direction and balance notes that the IASB's work is currently following six lines:

  • New IFRS Standards and major amendments to IFRS Standards
  • Maintenance and consistent application of IFRS Standards
  • The IFRS for SMEs Standard
  • Digital financial reporting and the IFRS Taxonomy
  • Understandability and accessibility
  • Stakeholder engagement

In this part of the request for views the IASB is seeking stakeholders’ views on whether the Board should increase, leave unchanged or decrease its current level of focus on each line of work. And while there is a little room for additional work, respondents are asked to assume that the Board’s overall level of resources will remain substantially unchanged during the 2022 to 2026 period.

Criteria for assessing the priority of projects that could be added to the work plan

Part two of the request for information regarding criteria for assessing the priority of projects that could be added to the work plan notes that the Board will use a specified list of seven criteria to assess the potential financial reporting issues that could be added to its work plan to develop new IFRS Standards and major amendments to IFRS Standards. They are:

  • The importance of the matter to investors
  • Whether there is any deficiency in the way companies report the type of transaction or activity in financial reports
  • The type of companies that the matter is likely to affect, including whether the matter is more prevalent in some jurisdictions than others
  • How pervasive or acute the matter is likely to be for companies
  • The potential project’s interaction with other projects on the work plan
  • The complexity and feasibility of the potential project and its solutions
  • The capacity of the Board and its stakeholders to make timely progress on the potential project

The criteria are derived from the Due Process Handbook and the 2015 Agenda Consultation. The relative importance of any specific criterion will vary depending on the particular circumstances. Generally, the Board will evaluate potential project for its work plan primarily on the basis of whether the project will meet investors’ needs, while also taking into account the costs of producing the information.

Financial reporting issues that could be added to the Board’s work plan

Finally, part three of the request for information regarding financial reporting issues that could be added to the Board’s work plan refers to 22 projects that have frequently been suggested to the Board for consideration. The request for information seeks stakeholders’ views on what priority they would give each of the potential projects — high, medium or low — and whether their prioritisation refers to all or only some aspects included in the project description. Respondents are also invited to suggest additional issues that they believe the Board should add to its work plan for 2022 to 2026.

 

Appendices

For reasons of readability, some of the information referred to in the request for information has been relegated to appendices:

  • Appendix A describes the active projects on the Board’s work plan as of March 2021
  • Appendix B describes the 22 financial reporting issues that were frequently suggested to the Board for potential potential inclusion in its work programme
  • Appendix C describes additional financial reporting issues that were suggested to the Board by only a small number of stakeholders

 

Comment deadline and next steps

Stakeholders are invited to provide feedback on the request for information by September 27, 2021. The Board expects to discuss the feedback in the second half of 2021 and to publish a feedback statement summarizing the feedback and announcing the work plan for 2022 to 2026 in the first quarter of 2022.

 

Additional information

Review the following information on the IASB's website:

 

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.