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News

Leaf - sustainability (green) Image

Call to action in response to climate change

25 Feb 2020

14 accounting bodies have signed a call to action in response to climate change. The bodies, who are all members of A4S’s Accounting Bodies Network, represent over 2.5 million accountants and students globally.

The statement includes eight actions which accountants are called upon to take in response to the climate emergency. It also includes commitments from the bodies themselves in support of their members. The call to action highlights that climate change represents an economic, social and business risk – a risk that accountants from across the world must take action on.

Please click to access the call to action on the A4S website.

EFRAG (European Financial Reporting Advisory Group) (dk green) Image

EFRAG draft comment letter on the proposed new standard on general presentation and disclosures

24 Feb 2020

The European Financial Reporting Advisory Group (EFRAG) has issued a draft comment letter on the IASB exposure draft ED/2019/7 'General Presentation and Disclosures'.

The proposed new standard is intended to replace IAS 1 Presentation of Financial Statements.

In its draft comment letter, EFRAG

  • supports the IASB's proposals to present an operating, investing and financing category in the statement of profit or loss to improve comparability and reduce diversity in practice, but has reservations over some of the proposals in the ED;
  • expresses the view that separate presentation of integral and non-integral associates and joint ventures will result in relevant information for users of financial statements and enhance comparability, but will involve significant judgement and needs to be tested in practice;
  • welcomes the IASB's efforts to provide guidance on management performance measures but highlights a number of challenges in regard to the ED proposals and also mentions the possibility of an alternative narrower scope; and
  • welcomes the IASB's efforts to define unusual income and expenses and to require entities to disclose such items in the notes, but notes that the definition of unusual items seems to be rather narrow.

Comments on EFRAG's draft comment letter are requested by 19 June 2020. For more information, see the press release and the draft comment letter on the EFRAG's website.

SMEIG (SME Implementation Group) (mid blue) Image

IFRS Foundation seeks new SMEIG members

24 Feb 2020

The IFRS Foundation Trustees are currently seeking nominations for membership of the SME Implementation Group (SMEIG), which supports the international adoption of the 'International Financial Reporting Standards for Small and Medium-sized Entities' (IFRS for SMEs) and monitors its implementation.

The Trustees are seeking new SMEIG members from all geographical regions and are particularly interested in candidates who use the financial statements of small and medium-sized entities (investors and providers of finance). They will be appointed from 1 July 2020 and would serve three-year terms. Nominations for membership of the SMEIG close on 20 March 2020. Please click for the IASB press release (link to IASB website).

IPSASB (International Public Sector Accounting Standards Board) (mid gray) Image

IPSASB publishes three exposure drafts

24 Feb 2020

The International Public Sector Accounting Standards Board (IPSASB) has released three interconnected exposure drafts: ED 70 'Revenue with Performance Obligations', ED 71 'Revenue without Performance Obligations', and ED 72 'Transfer Expenses'.

The three exposure drafts are published together to highlight the linkages between the accounting for revenue and transfer expenses.

  • ED 70 is aligned with IFRS 15 Revenue from Contracts with Customers, while extending the income recognition approach in IFRS 15 to address common public sector transactions which include performance obligations, including those where the ultimate beneficiary is a third party.
  • ED 71 is an update of IPSAS 23 Revenue from Non-Exchange Transactions (Taxes and Transfers) that addresses some of the issues encountered in its application. ED 71 also provides public sector-specific guidance on capital transfers for the first time.
  • ED 72 proposes guidance for transfer expenses, where a transfer provider provides resources to another entity without receiving anything directly in return.

Comments on all EDs are requested by 15 September 2020.

Please click to access the following additional information on the IPSASB website:

 

IFRIC meeting (blue) Image

March 2020 IFRS Interpretations Committee meeting agenda posted

21 Feb 2020

The IFRS Interpretations Committee has posted the agenda for its next meeting, which will be held in London on 3 March 2020.

The Committee will discuss the following:

  • Administrative matters
  • IFRS 16 — Sale and leaseback with variable payments
  • IAS 12 — Deferred tax related to a subsidiary's undistributed profits
  • IAS 12/IAS 29 — Translation of hyperinflationary foreign operation
  • IFRS 15 — Training costs to fulfil a contract
  • Work in progress

The full agenda for the meeting can be found here. We will post any updates to the agenda, our com­pre­hen­sive pre-meet­ing summaries as well as observer notes from the meeting on this page as they become available.

FRC Image

FRC to review how companies and auditors assess and report on the impact of climate change

21 Feb 2020

The Financial Reporting Council (FRC) has announced a major review of how companies and auditors assess and report on the impact of climate change.

The FRC will review the extent to which UK companies and auditors are responding to the impact of climate change on their business to ensure reporting requirements are being met.

The review will consider how the quality of information can be improved to support informed decision-making by investors and other stakeholders. The FRC will monitor how companies and their advisers fulfil their responsibilities, and encourage better practice, by:  

  • reviewing a sample of company reports and accounts across industries to assess the quality of their compliance with reporting requirements in relation to climate change;
  • assessing a sample of audits to review how auditors are ensuring the impact of climate risk has been appropriately reflected in company reports and accounts, including the key areas of judgement and related disclosures;
  • assessing the resources available within audit firms to support audit teams in evaluating the impact of climate change on audited entities; 
  • evaluating the quality of disclosures under the new UK Corporate Governance Code regarding risk, emerging risk and long-term factors affecting their viability;
  • evaluating whether the Financial Reporting Lab’s recommendation for companies to report in line with the Task Force on Climate-related Financial Disclosures framework has been adopted, highlighting developing good practice.

Click here for the press release on the FRC website.

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Agenda for the March 2020 GPF meeting

21 Feb 2020

Representatives from the International Accounting Standards Board (IASB) will meet with the Global Preparers Forum (GPF) in London on 5 March 2020. The agenda for the meeting has been released.

The full agenda for the meeting is summarised below:

Thursday, 5 March 2020 (10:10-16:20)

  • Primary financial statements — Overview over the ED and preliminary views of the members
  • IASB update
  • Goodwill and impairment — Overview of the Board’s preliminary views that will be included in the discussion paper and GPF members’ views on the feedback process for the project and areas of focus during the comment and outreach period
  • Disclosure initiative: Targeted standards-level review of disclosures in IAS 19 and IFRS 13 — next steps in the project

Agenda papers for this meeting are available on the IASB's website.

European Union Image

EC publishes consultation on the revision of the NFRD

20 Feb 2020

Following the launch of the initiative 'Revision of the Non-Financial Reporting Directive', the European Commission (EC) has now opened the consultation itself for public comment.

As reported earlier, Executive Vice President Valdis Dombrovskis of the EC announced in January 2020 that later this year he would present a renewed sustainable finance strategy, which would include a revision of the Non-Financial Reporting Directive (NFRD). The initiative to update the NFRD was launched earlier this month. Today, the EC launched the consultation itself by publishing a consultation document. 

In the introduction to the consultation, the EC makes the following statement:

  1. There is inadequate publicly available information on non-financial issues as:
    • a) reported non-financial information is not sufficiently comparable or reliable;
    • b) companies do not report all non-financial information that users think is necessary, and many companies report information that users do not think is relevant;
    • c) some companies do not report such information; and
    • d) it is hard to find non-financial information even when it is reported.
  2. Companies incur unnecessary and avoidable costs related to reporting non-financial information.

The consultation document itself contains 45 questions in eight categories:

    1. Quality and scope of non-financial information to be disclosed
    2. Standardisation
    3. Application of the principle of materiality
    4. Assurance
    5. Digitisation
    6. Structure and location of non-financial information
    7. Personal scope (which companies should disclose)
    8. Simplification and reduction of administrative burdens for companies

"Standardisation" contains questions about whether there should be common standards for EU companies, what the relation between financial information and non-financial information should be and which bodies/groups should be involved in setting these standards (if that should be the case).

The consultation document is available on the EC website (login required). Feedback is requested by 14 May 2020.

IIRC (International Integrated Reporting Committee) (green) Image

IIRC calls for feedback in the context of the planned revision of its Framework

20 Feb 2020

The International Integrated Reporting Council (IIRC) has launched a revision of the International <IR> Framework and is calling for market feedback on specific themes that will inform the nature and direction of the revision.

The IIRC has identified key themes around which it invites feedback, outlined in three topic papers on a) business model considerations, b) responsibility for an integrated report, and c) charting a path forward. The first two topic papers relate to the current <IR> Framework revision process. The third topic paper forges ahead with themes shaping the future of corporate reporting, including extended assurance and the role of technology. Feedback on this paper will inform the IIRC’s longer-term strategy.

Each topic paper separately invites market feedback via an online survey. Responses are requested by 20 March 2020. Please see the following additional information on the IIRC website:

Proposed amendments to the Framework will receive 90-day public exposure via a consultation draft, launching in May 2020. The revised Framework is due for release at the end of 2020.

Accountancy Europe Image

Research into the local implementation of the EU Directive on disclosure of non-financial and diversity information

20 Feb 2020

Accountancy Europe has published 'Towards reliable non-financial information across Europe'.

The publication sets out how European countries have transposed the Directive on disclosure of non-financial and diversity information into national law and the impact on the role of the statutory auditor and independent assurance services provider. It also looks into the voluntary assurance practice beyond legal requirements across Europe.

Please click to access the publication on the Accountancy Europe website.

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