This staff Spotlight highlights important considerations and examples for auditors related to commercial real estate (CRE), as they plan and conduct audits and reviews of interim financial information in many industries with CRE exposure. For example, the report provides a specific set of questions that auditors may want to consider in the context of identifying and assessing risks, including the risk of fraud.

The Spotlight also provides reminders in the following key areas:

• Asset impairment and allowance for credit losses
• Going concern
• Interim review considerations

Access the Spotlight report on the PCAOB’s website.

The ISSB Taxonomy will enable investors to search, extract and compare sustainability-related financial disclosures provided under the ISSB standards. The ISSB Taxonomy reflects IFRS S1, IFRS S2 and guidance accompanying the standards.

The ISSB Taxonomy is consistent with the IFRS Accounting Taxonomy so that entities can provide a holistic digital financial reporting package to investors. However, the ISSB Taxonomy can also be used with other digital taxonomies.

Access the press release on the IFRS Foundation website.

The podcast highlights some of the projects that were discussed during the meeting, including:

• Start of a thorough review concerning intangible assets
• Developments within the climate-related and other uncertainties in the financial statements project
• Finalization of the agenda decision pertaining to net-zero commitments
• Insights into the ongoing post-implementation reviews of IFRS 15 and IFRS

The podcast can be accessed here on the IFRS Foundation website

The PCAOB strongly encourages firms to assess the underlying root causes of a deficiency so that the deficiency can be effectively addressed and ultimately remediated and eliminated. Root Cause Analysis (RCA) is used by many audit firms to evaluate the adequacy of and compliance with their quality control system.

The PCAOB staff believes that RCA is an effective practice for firms to drive audit quality. The Spotlight covers:

• General considerations related to RCA
• Other observations about RCA from PCAOB inspections
• Key questions for audit firms to consider

In addition to audit firms, audit committees and others charged with governance may find the firm’s root cause analysis informative as they discuss past inspection deficiencies, the cause of those deficiencies, what corrective actions were taken to address these deficiencies, and what preventive measures a firm has taken to improve their audit quality going forward.

Access the Spotlight report on the PCAOB’s website.

The podcast discusses the following:

• IFRS Advisory Council meeting
• International Forum of Accounting Standard Setters
• Commence research projects about risks and opportunities related to nature and human capital
• Launch of the IFRS Sustainability Disclosure Taxonomy
• Forthcoming joint educational material with EFRAG on interoperability.

Access the press release on the IFRS Foundation website.

Below is an analysis of all changes made to the work plan since our last analysis on March 23, 2024

Standard-setting projects

• Equity Method — An exposure draft is expected in Q3 2024 (previously H2 2024)
• Management Commentary — A decision on the project direction is now expected in June 2024 (previously Q2 2024)
• Primary Financial Statements — This project has been removed from the work plan since the issuance of IFRS 18 Presentation and Disclosures in Financial Statements on April 9

Maintenance projects

• Annual improvements to IFRS Accounting Standards — The following now have the final amendment to be issued in July 2024 (previously Q3 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 — The next project step will now be an exposure draft expected to be published in Q3 2024

Governance projects

• ISSB Consultation on Agenda Priorities — A feedback statement is now expected in June 2024 (previously Q2 2024)

Research projects

• Business Combinations under Common Control — This project has been removed from the work plan since the IASB completed it by publishing a project summary on April 17, 2024
• Intangible Assets — This project has been added to the work plan and a review of the research is expected in H2 2024
• Post-implementation Review of IFRS 15 — Revenue from Contracts with Customers — A feedback statement is now expected in Q3 2024 (previously H2 2024).

Other projects

• IFRS Accounting Taxonomy Update: The following projects were removed from work plan since the release of the update on March 27:
• Amendments to IAS 12, IAS 21, IAS 7 and IFRS 7
• Common Practice (Financial Instruments) and General Improvements
• IFRS Accounting Taxonomy Update — Primary Financial Statements — A proposed IFRS Taxonomy Update is expected in May 2024 (previously Q2 2024)
• IFRS Accounting Taxonomy Update — Subsidiaries without Public Accountability: Disclosure and Amendments to IFRS 7 and IFRS 9 — A proposed IFRS Taxonomy Update is expected in Q3 2024 (previously H2 2024)
• IFRS Sustainability Disclosure Taxonomy — This project has been removed from the work plan since the ISSB published the disclosure taxonomy in April 2024.

The above is a faithful comparison of the IASB and ISSB work plan on March 26, 2024 and April 29, 2024

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

The Core Principles are a set of global supervisory standards, setting a crucial basis for governments and regulators to draw on when establishing or revising their own rules and regulations. Their revision, which reflects an extensive consultation process, marks a significant development in banking supervision.

The Core Principles have explicitly included three new topics: operational resilience, business model sustainability, and climate-related financial risks. These additions underscore a global consensus on the significance of these risks and the need for supervisors to take proactive measures.

Recognizing the importance of sound business strategies, the revised Core Principles also include the assessment of business model sustainability, aiming to foster banks' long-term viability. The update also addresses the systemic risks posed by climate change. Recognizing the urgency of climate-related threats, supervisors now have explicit mandates to assess and mitigate these risks in their supervisory practices.

By integrating these three new pillars of action into the supervisory toolkit, regulators aim to build a more resilient and sustainable banking system capable of navigating the challenges of the 21^st century.

Access the press release on the BIS’s website.

The proposed amendments aim to improve financial reporting, particularly for business combinations, focusing significantly on disclosure enhancements and simplifying impairment tests.

It will also affect how entities perform goodwill impairment assessments, directing entities to do so at the lowest level monitored by management for the related business. This should prevent the automatic assignment of goodwill to operating segments, which may result in allocating goodwill to more cash-generating units (CGUs). This may lead to increased effort if additional impairment assessments are needed for multiple CGUs that have been allocated goodwill.

The objective of the IASB’s proposals is to:

• increase the qualitative information provided about business combinations.
• simplify and reduce the costs associated with performing the quantitative impairment test.
• improve the effectiveness of the impairment test.

Access the press release and the exposure draft on the AcSB’s website.

The project will assess whether the requirements of IAS 38 Intangible Assets remain relevant and continue to fairly reflect current business models or whether the IASB should improve the criteria. The initial research and planning phase aims to define the scope of issues to be explored in the project and explore the best approach to plan and organize the work.

During the third agenda consultation, stakeholders highlighted deficiencies in the reporting of intangible assets and raised matters relating to all aspects of IAS 38 Intangible Assets, including its scope, its recognition and measurement requirements (including the difference in the accounting for acquired and internally generated intangible assets), and the adequacy of the information companies are required to disclose about intangible assets.

Although the title of this project refers to intangible assets, the IASB will also consider whether the project should be limited to accounting for and disclosing information about financial statement elements or whether the project should aim to address intangible items more broadly.

Access the press release on the IASB’s website.

The research projects aim to determine the specific disclosures investors need to evaluate sustainability-related risks and opportunities in these sectors. As per the IFRS S1, entities are currently required to provide these disclosures with the help of sources of guidance (including the SASB standards).

As with the approach to the ISSB’s inaugural Standards, the ISSB will look at how it might build from relevant pre-existing initiatives. This includes those already under its purview—the SASB Standards and CDSB guidance—and, additionally, relevant aspects of the work of the Task Force on Nature-related Financial Disclosures (TNFD).

With the research projects, the ISSB will now undertake its standard-setting to provide more specific disclosure requirements and expand the global baseline of sustainability-related financial disclosures.

The ISSB has also decided not to begin a project related to integration in reporting at this time. However, the ISSB has agreed to monitor developments in this area closely and may consider including such a project in future agenda consultations. In the January 2024 joint IASB-ISSB meeting, the boards noted that they still support the Integrated Reporting Framework regardless of decisions made about their respective work plans.

Access the press release on the IFRS’s website.