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Basis for Conclusions – Compilation Engagements

Jan 31, 2020

On January 31, 2020, the Auditing and Assurance Standards Board (AASB) released this document, which summarizes the process the AASB followed in issuing CSRS 4200, Compilation Engagements, and the Board’s conclusions regarding significant comments received in response to its Exposure Draft.


Updated IASB work plan — Analysis (January 2020)

Jan 31, 2020

On January 31, 2020, the International Accounting Standards Board (the Board) updated its work plan following its January 2020 meeting.

Below is an analysis of all changes made to the work plan since our last analysis on December 14, 2019.

Standard-setting projects

  • Primary Financial Statements — After publishing an exposure draft in December 2019, the next milestone for this project is now exposure draft feedback. Comments are due by 30 June 2020.
  • Rate-regulated Activities —  An exposure draft is now expected in H2 2020 (formerly H1 2020).
  • Subsidiaries that are SMEs — After reviewing research at the January 2020 Board meeting, the Board decided to elevate this project to a standard-setting project. The next milestone is now  a decision on whether to proceed with a discussion paper or exposure draft. No date is listed.

Maintenance projects

Research projects

Other projects

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

All - Deloitte Image

Reflections from Davos: Encouraging action on several of the world’s most critical issues

Jan 31, 2020

In January 2020, Deloitte Canada published an article where Rob P. Galaski, Vice Chair, Global Managing Partner, who was present at Davos as part of our Deloitte delegation, where he shares a few key takeaways and how they relate to codifying organizational sustainability.

This year, the World Economic Forum’s Annual Meeting in Davos, Switzerland helped reinforce an interesting paradox. For 50 years, the meeting has been held in the cold and unchanging mountains of the Swiss Alps. Outside this small mountain town, however, the world is getting hotter and more unstable. From military disputes between the United States and Iran to protests in Hong Kong, from debates over the presidential impeachment south of the border and massive bushfires in Australia, the beginning of this new decade has been marked by heated tensions to match the ongoing warming of Earth itself.

Review the full article on our website.

US_SEC Image

SEC Proposes Amendments to Modernize MD&A and Certain Other Financial Disclosure Requirements and Issues Guidance on KPIs and Metrics

Jan 30, 2020

On January 30, 2020, the Securities and Exchange Commission (SEC) issued a proposed rule and guidance as part of its efforts to “modernize, simplify, and enhance certain financial disclosure requirements in Regulation S-K.”

The proposed rule’s amendments would reduce “duplicative disclosure and [focus] on material information in order to improve these disclosures for investors and simplify compliance efforts for registrants.”

The guidance addresses “key performance indicators and metrics in Management’s Discussion and Analysis of Financial Condition and Results of Operations (‘MD&A’).”

Comments on the proposed amendments are due 60 days after the date of their publication in the Federal Register. The guidance will become effective on the date of its publication in the Federal Register.

Review the press release on the SEC’s website.

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

IESBA proposes guidance to address the objectivity of engagement quality reviewers

Jan 30, 2020

On January 30, 2020, the International Ethics Standards Board for Accountants (IESBA) released for public comment the Exposure Draft, "Proposed Revision to the Code Addressing the Objectivity of Engagement Quality Reviewers". The proposed limited-scope revision to the International Code of Ethics for Professional Accountants (including International Independence Standards) (the Code) dovetails with the International Auditing and Assurance Standards Board’s (IAASB’s) development of proposed International Standard on Quality Management (ISQM) 2, Engagement Quality Reviews. Comments are requested by March 16, 2020.

The Exposure Draft includes proposed guidance on the application of the conceptual framework in the Code to address the topic of the objectivity of an engagement quality reviewer (EQR), thereby supporting proposed ISQM 2 in addressing the matter of the eligibility of an individual to serve in an EQR role. In particular, the proposed guidance:

  • Explains the different types of threat to compliance with the fundamental principle of objectivity that might be created in circumstances where an individual is being considered for appointment as an EQR for a given engagement;
  • Sets out factors to consider in evaluating the level of the identified threats; and
  • Suggests actions that might be safeguards to address the threats.

The development of the proposal benefited from cooperation with the IAASB within the established coordination framework of the two Boards. The IESBA is proceeding on an accelerated time frame to finalize the proposal in order to align closely with the anticipated finalization of ISQM 2 within 2020.

Review the press release and Exposure Draft on the IESBA's website.

European Union Image

Executive Vice President of the European Commission calls for European non-financial reporting standards

Jan 28, 2020

On January 28, 2020, at a conference on implementing the European Green Deal, Executive Vice President Valdis Dombrovskis announced that the European Commission will support a process to develop European non-financial reporting standards.

Mr Dombrovskis said that later this year he would present a renewed sustainable finance strategy, which would include a revision of the Non-Financial Reporting Directive. This would require companies to increase disclosure on their sustainable activities and give adequate reliable information on sustainability risks and opportunities. However, he said, not every detail can - or should - be fixed in law. There was also a need for clear reporting standards for companies to apply. Mr Dombrovskis went on to say:

So today, I can tell you that the European Commission will support a process to develop European non-financial reporting standards. I will soon invite the European Financial Reporting Advisory Group [EFRAG] to begin preparatory work for these standards as quickly as possible. The many overlapping international reporting standards and set-ups confuse companies and investors. They also find it expensive. The EU is well placed to address this situation – and show leadership in building consensus for a set of standards that can be widely accepted.

Mr Dombrovskis conceded that the European Commission cannot do this alone. Therefore, he stated, the best and most widely accepted elements of what exists today will be the starting point and expert assistance from those organisations and individuals who can best contribute to the process will be used. 

Review the Mr. Dombrovskis' speech on the European Commission's website.


IASB publishes "Request for Information: Comprehensive Review of the IFRS for SMEs Standard"

Jan 28, 2020

On January 28, 2020, the International Accounting Standards Board (IASB), in cooperation with the SME Implementation Group (SMEIG), has developed and issued a request for information seeking comments on strategic and general questions, specific sections of the IFRS for SMEs, as well as new topics and other matters related to the IFRS for SMEs. Responses are due by July 27, 2020.

IFRS for SMEs was first issued in July 2009. A first comprehensive review of the standard took place between 2012 and 2014. The IASB has now launched a second review with the objective of seeking views on whether and how to align the IFRS for SMEs with full IFRSs.

The Request for Information is divided into three parts:

  • Part A contains strategic and general questions.
  • Part B contains questions on specific sections of the IFRS for SMEs and their alignment with the full IFRSs; and
  • Part C contains questions on new topics and other matters related to the IFRS for SMEs.

A summary of the questions asked in each Part is set out in the table at the bottom of the article.

The SMEIG is expected to review comments on the request for information and make recommendations to the IASB on possible amendments.

Click for:


Summary of questions asked in the request for information

Part A - Strategic and general questions

  • Alignment approach
    • Should the IFRS for SMEs be aligned with full IFRSs?
    • What extent of alignment of the IFRS for SMEs with full IFRSs is most useful, and why?
  • Alignment principles
    • Do the Board's proposed principles provide a framework to assist in determining whether and how the IFRS for SMEs should be aligned with full IFRSs?
  • When to consider alignment
    • Of the three possible dates for when to consider alignment, which is preferable?

Part B - Specific issues

  • Should Section 2 of the IFRS for SMEs be aligned with the 2018 Conceptual Framework and how?
  • Should Section 9 of the IFRS for SMEs be aligned with IFRS 10 and how?
  • Should Section 11 of the IFRS for SMEs be aligned with IFRS 9 and how?
  • Should Section 15 of the IFRS for SMEs be aligned with IFRS 11 and how?
  • Should Section 19 of the IFRS for SMEs be aligned with IFRS 3 and how?
  • Should Section 20 of the IFRS for SMEs be aligned with IFRS 16 and how?
  • Should Section 23 of the IFRS for SMEs be aligned with IFRS 15 and how?
  • Should Section 28 of the IFRS for SMEs be aligned with IAS 19 and how?
  • Should the IFRS for SMEs be aligned with IFRS 13 and how?
  • Should multiple sections of the IFRS for SMEs for amendments to IFRSs and IFRIC Interpretations and how?

Part C - New topics and other matters

  • Should the IFRS for SMEs be aligned with IFRS 14 or not?
  • Should holdings of cryptocurrency be addressed in the IFRS for SMEs?
  • Are there difficulties in applying the simplifications allowed by paragraph 28.19 of the IFRS for SMEs?
  • Are there any topics the IFRS for SMEs does not address that should be the subject of specific requirements?
  • Are there additional issues that should be brought to the Board’s attention relating to the IFRS for SMEs?
CAQ Image

Hyperinflationary economies - updated IPTF watch list available

Jan 27, 2020

IAS 29 "Financial Reporting in Hyperinflationary Economies" defines and provides general guidance for assessing whether a particular jurisdiction's economy is hyperinflationary. But the IASB does not identify specific jurisdictions. The International Practices Task Force (IPTF) of the Centre for Audit Quality (CAQ) monitors the status of "highly inflationary" countries. The Task Force's criteria for identifying such countries are similar to those for identifying "hyperinflationary economies" under IAS 29.

The IPTF's discussion document for the November 19, 2019 meeting is now available and states the following view of the Task Force:

Countries with three-year cumulative inflation rates exceeding 100%:

  • Argentina
  • South Sudan
  • Sudan
  • Venezuela
  • Zimbabwe

Countries with projected three-year cumulative inflation rates exceeding 100%:

  • Islamic Republic of Iran

Countries where the three-year cumulative inflation rates had exceeded 100% in recent years:

There are no countries in this category for this period.

Countries with recent three-year cumulative inflation rates exceeding 100% after a spike in inflation in a discrete period:

  • Angola
  • Suriname

Countries with projected three-year cumulative inflation rates between 70% and 100% or with a significant (25% or more) increase in inflation during the current period

  • Democratic Republic of Congo
  • Liberia
  • Yemen

The IPTF also notes that there may be additional countries with three-year cumulative inflation rates exceeding 100% or that should be monitored which are not included in the analysis as the necessary data is not available. An example cited is Syria.

The full list, including exact numbers, detailed explanations of the calculation of the numbers, and observations of the Task Force is available on the CAQ website. We also offer the overview of the IPTF's assessment of hyperinflationary jurisdictions at the end of our summary of IAS 29.

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SEC publishes document on cybersecurity and resiliency

Jan 27, 2020

On January 27, 2020, the Securities and Exchange Commission Commission's Office of Compliance Inspections and Examinations (OCIE) issued examination observations related to cybersecurity and operational resiliency practices taken by market participants.

The document discusses best practices for enhancing cybersecurity preparedness and operational resiliency. Topics addressed include the following:

  • Governance and risk management
  • Access rights and controls
  • Data loss prevention
  • Mobile security
  • Incident response and resiliency
  • Vendor management
  • Training and awareness

Review the press release and cybersecurity page on the SEC’s website.

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IBC discusses Big4 report on reporting sustainability information at WEF

Jan 24, 2020

In January 2020, at the World Economic Forum (WEF), the chief executive officers of many of the world’s largest companies expressed support for aligning on a core set of metrics and disclosures in their annual reports on the non-financial aspects of business performance such as greenhouse gas emissions and strategies, diversity, employee health and well-being and other factors.

The International Business Council (IBC) of the WEF discussed a proposal prepared by the Forum in collaboration with the Big Four accounting firms – Deloitte, EY, KPMG and PwC – titled Toward Common Metrics and Consistent Reporting of Sustainable Value Creation. The proposal recommends a set of core metrics and recommended disclosures. The intent is for the metrics to be reflected in the mainstream annual reports of companies on a consistent basis across industry sectors and countries.

The proposed metrics and recommended disclosures have been organized into four pillars that are aligned with the UN Sustainable Development Goals (SDGs) and principal Environmental, Social, and Governance (ESG) domains. They are:

Principles of Governance Planet People Prosperity
aligned with SDGs 12, 16 and 17 aligned with SDGs 6, 7, 12, 13, 14 and 15 aligned with SDGs 1,3, 4, 5 and 10 aligned with SDGs 1, 8, 9 and 10
focuses on a company’s commitment to ethics and societal benefit looks at the themes of climate sustainability and environmental responsibility examines the roles human and social capital play in business focuses on business contributions to equitable, innovative growth

The metrics are drawn, wherever possible, from existing standards and disclosures such as GRI, SASB, TCFD, CDSB and others. Instead of reinventing the wheel by creating a new standard, they aim to amplify and elevate the rigorous work that has already been done by these initiatives, bringing their most material aspects into mainstream reports on a consistent basis.

Adoption of such recommended universal metrics and disclosures by IBC companies is intended to be a catalyst for greater alignment and synergy among existing ESG standards and ultimately a system-wide solution, such as a generally accepted international accounting or other reporting standard drawn from best practice.

Review the Consultation Draft Toward Common Metrics and Consistent Reporting of Sustainable Value Creation from the WEF's website.

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