The IAASB also responded to a new environment sparked by the global pandemic by issuing guidance and engaging with a broad range of stakeholders in order to sustain trust in audit and assurance.

The Public Report showcases the IAASB’s efforts to be a responsive, agile and innovative standard setter, closely connected with its stakeholders. The report highlights completed and in progress standard-setting projects, other new initiatives to respond to stakeholder needs, and our efforts to improve the agility of the standard-setting process. The report also includes reflections from IAASB Chair Tom Seidenstein on his first 18 months in this role.

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

Background

The IFRS Interpretations Committee received a submission about the determination of the exchange rate when there is a long-term lack of exchangeability as IAS 21, The Effects of Changes in Foreign Exchange Rates does not include explicit requirements on the exchange rate an entity uses when the spot exchange rate is not observable. The Committee researched possible narrow-scope standard-setting and concluded that the best way forward was to recommend that the IASB propose narrow-scope amendments to IAS 21 to address the matter.

In November 2019, the IASB took the matter over and during its subsequent meetings discussed how to assess whether a currency is exchangeable and which exchange rate to use when it is not. The Board decided to propose to add requirements to IAS 21 that will help an entity determine whether a currency is exchangeable into another currency and requirements the entity would apply when it is not.

Suggested changes

The proposed amendments in exposure draft ED/2021/4 Lack of Exchangeability (Proposed amendments to IAS 21) would amend IAS 21 to:

• Specify when a currency is exchangeable into another currency and when it is not — a currency is exchangeable when an entity is able to exchange that currency for the other currency, even if indirectly through another currency, through markets or exchange mechanisms that create enforceable rights and obligations without undue delay; a currency is not exchangeable into the other currency if an entity can only obtain an insignificant amount of the other currency.
• Specify how an entity determines the exchange rate to apply when a currency is not exchangeable — when a currency is not exchangeable an entity estimates the spot exchange rate as a rate that the entity would have been able to access had the currency been exchangeable, would have applied to an orderly transaction between market participants, and would faithfully reflect the economic conditions prevailing; an entity would also be able to use an observable exchange rate as the estimated spot exchange rate if it meets the noted requirements or the first subsequent exchange rate after exchangeability is restored.
• Require the disclosure of additional information when a currency is not exchangeable — when a currency is not exchangeable an entity discloses information that would enable users of its financial statements to evaluate how a currency’s lack of exchangeability affects, or is expected to affect, its financial performance, financial position and cash flows.

Comments on the proposed changes are requested by September 1, 2021.

Effective date

The exposure draft does not contain a proposed effective date as the IASB intends to decide on this after exposure. Early application would be permitted. The amendments would apply prospectively from the date of initial application of the amendments.

Additional information

• IASB press release
• IASB exposure draft
• Introductory webcast to the exposure draft

This issue features:

• Spotlight — Improving the financial reporting of rate-regulated companies
• In profile — Jeremy Stuber, analyst and member of the Capital Markets Advisory Committee
• We need your views
• Stay up to date
• Resources for investors

Review the press release and Investor Update newsletter on the IASB’s website.

In March 2021, the IESBA reflected on the progress made to date on its technology Initiative, and considered next steps and timing, also recognizing the increased burdens stakeholders have shouldered as a result of the pandemic.

Review the update on the IESBA's website.

The workshop, held in conjunction with the European Accounting Association (EAA) and the European Financial Reporting Advisory Group (EFRAG), was moderated by EAA President Thorsten Sellhorn and included an overview of the Request for Information by the IASB technical staff; an academic reflection by Professor Niclas Hellman; EFRAG’s summary of the initial input gathered by European constituents by Robert Stojek; and a Q&A session with the presenters and Board Member Ann Tarca.

Listen to the recording on the IASB's website.

The questionnaire forms part of the Working Group’s information gathering and 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. This review is being undertaken before the “jurisdictional provision” in the 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 and questionnaire on the IESBA's website.

The alert highlights “observations from recent exams of investment advisers, registered investment companies, and private funds offering ESG products and services.”

Review the alert on the SEC's website.

Review the alert on the SEC's website.

The COVID-19 pandemic may impair the viability of some GBEs, and/or their financial self-sufficiency from revenue outside their controlling government’s reporting entity. “How to Evaluate a GBE’s Financial Self-Sufficiency” examines factors affecting a GBE’s current and future financial performance, which could include the COVID-19 pandemic. It also:  

• draws on and magnifies CPA Canada Public Sector Accounting Handbook guidance for meeting the financial self-sufficiency criteria in the GBE definition; 
• outlines factors, changes in factors, and questions for controlling governments to consider; and 
• represents an important new starting place for comprehensively evaluating a GBE’s financial self-sufficiency.

Review the press release and guidance on the PSAB's website.

Review the audit committee forum highlights on the CPAB's website.