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Updated IASB and ISSB work plan — Analysis (December 2023)

Dec 18, 2023

Following the IASB's and ISSB's December 2023 meetings, we have analysed the work plan on the IFRS Foundation website to see what changes have resulted from the meetings and other developments since the work plan was last revised in November 2023.

Below is an analysis of all changes made to the work plan since our last analysis on November 20, 2023

Standard-setting projects

Maintenance projects

  • Amendments to the Classification and Measurement of Financial Instruments — Final amendments are now expected in Q2 2024 (previously H1 2024)
  • Annual Improvements to IFRS Accounting Standards — The following projects will have feedback discussions on their exposure draft in Q1 2024 (previously January 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)
  • Climate-related and Other Uncertainties in the Financial Statements — A direction on the project is now expected in Q2 2024 (previously Q1 2024)
  • Power Purchase Agreements — An exposure draft is expected in Q2 2024
  • Provisions — Targeted Improvements — An exposure draft is expected in H2 2024.

Research projects

  • Extractive Activities — This project is no longer in the work plan.

Other projects

  • IFRS Accounting Taxonomy Update — Common Practice (Financial Instruments) and General Improvements — Feedback discussions on the proposed IFRS Taxonomy Update are expected in February 2024 (previously Q1 2024)
  • IFRS Accounting Taxonomy Update — Primary Financial Statements — A proposed IFRS Taxonomy update is now expected in Q2 2024 (previously H1 2024)
  • IFRS Accounting Taxonomy Update — Subsidiaries without Public Accountability: Disclosures and Amendments to IFRS 7 and IFRS 9 — This project is added to the work plan with a proposed IFRS Taxonomy update expected in H2 2024
  • IFRS Sustainability Disclosure Taxonomy — The issuance of an IFRS Sustainability Disclosure Taxonomy is expected in Q2 2024

The above is a faithful comparison of the IASB and ISSB work plan on November 20, 2023 and December 18, 2023.

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

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IFRS - FSB (Financial Stability Board) Image

Task Force on Climate-Related Financial Disclosures disbanded

Dec 15, 2023

On December 15, 2023, the Task Force on Climate-related Financial Disclosures (TCFD) disbanded following its final status report, published in October 2023. As of November 2023, the TCFD website is no longer updated or monitored but will remain a resource for materials developed by TCFD.

With the International Sustainability Standards Board’s (ISSB) inaugural standards having been released (IFRS S1 General Requirements for Disclosure of Sustainability-Related Financial Information and IFRS S2 Climate-related Disclosures), the TCFD’s work is complete.  Therefore, the Financial Stability Board (FSB) has requested that the ISSB assume responsibility for monitoring progress on climate-related financial disclosures by companies as of 2024.

This announcement does not change mandatory requirements in respect of TCFD disclosures.

Access the announcement on the TCFD’s website.

SEC (US Securities and Exchange Commission) Image

SEC Division of Corporation Finance Director Gives Speech on Cybersecurity Disclosure

Dec 15, 2023

On December 15, 2023, the Securities and Exchange Commission (SEC)’s Division of Corporation Finance director, Erik Gerding, discussed the SEC’s July 2023 final rule Cybersecurity Risk Management, Strategy, Governance, and Incident Disclosure.

Mr. Gerding addressed the SEC’s rationale behind releasing the final rule, including “investors’ need for improved disclosure” about cybersecurity considering the greater cybersecurity risks in an increasingly technology-reliant world. He also stressed that, although investors “need consistent and comparable disclosures” about cybersecurity, it would be a “misconception” to think that the Commission is “seeking to prescribe particular cybersecurity defenses, practices, technologies, risk management, governance, or strategy.” Rather, “public companies have the flexibility to decide how to address cybersecurity risks and threats based on their own particular facts and circumstances.”

Given the final rule’s imminent compliance date, Mr. Gerding addressed some of the actions public companies should consider taking, such as consulting with “chief information security officers, other company’s cybersecurity experts and technologists, the disclosure committee, and those responsible for advising them on securities law compliance.” He also stressed the Division’s own “open door policy” with respect to assisting companies with their interpretive questions regarding the final rule’s provisions. Mr. Gerding closed his remarks by reassuring companies that the Division does not “seek to make ‘gotcha’ comments or penalize foot faults.” Rather, he underscores that the SEC’s overarching goal with this rule, as with other rules, is to “elicit tailored disclosures that provide consistent, comparable, and decision-useful information to investors.”

Access the rule on SEC’s website

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CCGG publishes Best Practices for Proxy Circular Disclosure

Dec 14, 2023

On December 14, 2023, the Canadian Coalition for Good Governance (CCGG) published its annual review of public company information circular disclosure, describing what it considers to be best practices for corporate governance and executive compensation disclosure and providing examples from issuers across Canada.

While the publication remains relatively consistent with the one published last year, updates have been made on the topics of board skills matrices, director continuing education, human capital management and succession planning, board and management diversity and executive share ownership requirements.

In this year’s publication, CCGG has highlighted a share ownership policy where the requirements are expressed as a multiple of an executive officer’s long-term incentive plan (LTIP) target, as opposed to the common practice of using base salary. CCGG has stated that benchmarking ownership relative to total direct compensation or the annual LTIP target may be more meaningful than base salary if base salary is the smallest component of total direct compensation.

Access the annual review on CCGG’s website.

SEC (US Securities and Exchange Commission) Image

FBI and SEC Provide Guidance on How Companies Can Request Delays from Disclosing Material Cybersecurity Incidents

Dec 14, 2023

On December 14, 2023, the Federal Bureau of Investigation (FBI) posted guidance to its website on how companies that are victims of cyber incidents can request a delay from disclosing a material incident under the Securities and Exchange Commission (SEC)’s new cybersecurity rule (released on July 26, 2023), with which “all registrants other than smaller reporting companies must begin complying on December 18, 2023.” (For smaller reporting companies, the compliance date is June 15, 2024.)

The U.S. Attorney General’s determination of whether disclosure of a material cybersecurity incident qualifies for a delay will be based on whether such disclosure “poses a substantial risk to public safety and national security.” The SEC must be notified of the determination of the Department of Justice (DOJ) in writing. If a registrant’s request is approved, the DOJ will communicate its decision to the SEC in addition to informing the registrant so that it can delay its Form 8-K filing.

Form 6-K will be amended to require foreign private issuers to furnish information on material cybersecurity incidents that they make or are required to make public or otherwise disclose in a foreign jurisdiction to any stock exchange or to security holders. Form 20-F will be amended to require that foreign private issuers make periodic disclosure comparable to that required in new Regulation S-K Item 106.

The SEC also issued several new compliance and disclosure interpretations (C&DIs) that address additional considerations for registrants that are requesting a delay from disclosing a material incident.

Access the final rule on SEC’s website and the guide on FBI’s website

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TSX Venture Exchange announced new expedited listing process for advanced applicants

Dec 13, 2023

On December 13, 2023, the TSX Venture Exchange (the “TSXV”) launched the TSXV Passport Listing Process, which provides an expedited listing process for advanced applicants that meet specified criteria. Applicants that meet this standard will be able to fast-track their listing application.

The Passport Process comprises of three steps:

  • Step 1 – Pre-File Letter and Meeting
  • Step 2 – Passport Application
  • Step 3 – TSXV Review

The goal of the Passport Listing Process is to identify advanced new listing applicants, provide them with greater certainty, accelerate their listing and capital-raising timelines and reduce costs associated with the listing process. Applicants seeking to list on the TSXV pursuant to the Passport Listing Process benefit from greater access to TSXV staff and expedited reviews.

All application materials and due diligence must be substantially completed at an early stage. Following submission of the required documentation, the TSXV commences its review on an expedited basis and provides an initial comment letter within five to seven business days. Passport Listing Process applicants can expect regular meetings with the TSXV to discuss comments and the status of their application.

Review the process on the TSX website.

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IASB completes project on extractives by publishing project summary

Dec 07, 2023

On December 7, 2023, the International Accounting Standards Board (IASB) published a project summary regarding its project on extractive activities, which the IASB decided not to pursue any further.

The IASB had issued IFRS 6 Exploration for and Evaluation of Mineral Resources in December 2004 because of a project taken over from the IASC.

Based on evidence collected, the IASB concluded at its September 2023 meeting that there is no compelling evidence that standard-setting would be necessary.

The IASB acknowledged that diverse accounting policies for exploration and evaluation expenditure would continue to be used in practice. However, feedback from investors and other users of financial statements suggested that those diverse accounting policies were not a significant concern.

Overall, the research findings suggested that any improvements to financial reporting that might result from amending or replacing the requirements in IFRS 6 or other IFRS Accounting Standards are likely to be outweighed by the costs of developing and implementing any such changes.

Review the press release and the project summary on the IFRS Foundation website.

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IAASB issued new standard for Audits of Less Complex Entities

Dec 06, 2023

On December 6, 2023, the International Auditing and Assurance Standards Board (IAASB) published the International Standard on Auditing for Audits of Financial Statements of Less Complex Entities, known as the ISA for LCE.

The ISA for LCE is a standalone global auditing standard designed specifically for smaller and less complex businesses and organizations. Built on the foundation of the International Standards on Auditing (ISAs), audits performed using this standard provide the same level of assurance for eligible audits: reasonable assurance. The standard is effective for audits beginning on or after December 15, 2025, for jurisdictions that adopt or permit its use.

Released alongside the ISA for LCE are a Basis for Conclusions, which details feedback from the public consultation period, a high-level fact sheet, and a frequently asked questions document. Additional materials to help jurisdictions navigate adoption will be issued in 2024, including supplementary guidance, a fact sheet on adoption, and a first-time implementation guide.

In May 2023, in its comment letter to the IAASB, the Auditing and Assurance Standards Board (AASB) indicated that it will continue to monitor and provide input to the IAASB as it works towards providing solutions in this area.

Review the materials  and the comment letter on the IAASB website.

SEC (US Securities and Exchange Commission) Image

SEC Chair warns companies against “AI Washing”

Dec 06, 2023

On December 06, 2023, the Securities and Exchange Commission (SEC) Chair, Gary Gensler, highlighted concerns about companies potentially overstating their AI capabilities, drawing parallels with the concept of "greenwashing."

Gary’s recent warnings against "AI Washing" underscore the rapid evolution of AI and its potential implications on corporate behavior, particularly within the realms of corporate and securities litigation. In a speech before an AI industry group, Gensler emphasized the importance of accurate and fair descriptions of AI-related processes, cautioning against misleading investors.

He also discussed the challenges of assessing AI-related litigation risks and explores concerns regarding the financial services industry's adoption of AI tools and potential impacts on decision-making processes, highlighting the broader legal principles that apply in the context of emerging technologies like AI.

Access the article on The D&O Diary’s website

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IFRS Interpretations Committee holds November 2023 meeting

Dec 05, 2023

On December 5, 2023, the IFRS Interpretations Committee (IFRS IC) discussed two new items, the finalization of one agenda decision and gave input into three International Accounting Standards Board (IASB)’s projects, after the meeting in London on November 28-29, 2023.

  • New item: IAS 37 Provisions, Contingent Liabilities and Contingent Assets — Climate-related Commitment
  • New item: IFRS 8 Operating Segments — Disclosure of Revenues and Expenses for Reportable Segments
  • Finalization of agenda decision: IAS 27 Separate Financial Statements — Merger between a Parent and Its Subsidiary in the Separate Financial Statements
  • Input to IASB project: Climate-related and Other Uncertainties in the Financial Statements
  • Input to IASB project: Provisions —Targeted Improvements
  • Input to IASB project: Power Purchase Agreements

Review the meeting highlights on the IFRS website.

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