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covid1 Image

Educational material on going concern requirements

13 Jan 2021

The IFRS Foundation has issued educational material, 'Going concern — a focus on disclosure', which intends to supports companies in its implementation of the requirements related to the preparation of financial statements using IFRS Standards on a going concern basis.

IAS 1 requires management to make an assessment of an entity's ability to continue as a going concern. If management has significant concerns about the entity's ability to continue as a going concern, the uncertainties must be disclosed. In the current stressed economic environment arising from the covid-19 pandemic, deciding whether the financial statements should be prepared on a going concern basis may involve a greater degree of judgement than usual.

For more information, see the press release on the IASB’s website.

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Appointment to the IFRS Advisory Council

13 Jan 2021

The Trustees of the IFRS Foundation have announced an additional appointment to the IFRS Advisory Council effective 1 January 2021.

Xianzhong Li will represent the Chinese Ministry of Finance on the Council.

A press release announcing his appointment is available on the IASB website.

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Academics and the post-implementation reviews of IFRS 9, IFRS 15, and IFRS 16

12 Jan 2021

The IFRS Foundation is offering three webinars aimed at identifying how academics can contribute to the post-implementation reviews of IFRS 9 'Financial Instruments', IFRS 15 'Revenue from Contracts with Customers', and IFRS 16 'Leases'.

Each webinar will be offered once in the morning and once in the afternoon to accommodate stakeholders in different time zones. The webinars will last approximately 60 minutes and will consist of an overview of the standard’s objectives and related research opportunities, followed by questions and answers.

Please click for registration on the IASB website:

IFRS 9, Thursday 21 January 2021:

IFRS 16, Friday 22 January 2021:

IFRS 15, Monday 8 February 2021:

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Financial Reporting Lab Image

FRC releases podcast reflecting on the FInancial Reporting Lab's work in 2020

08 Jan 2021

The Financial Reporting Council (FRC) has released a podcast which reflects upon the work of the Financial Reporting Lab (the Lab) in 2020.

The podcast covers the Lab's work on reporting in times of uncertainty, including tips for section 172 statements and the use of video in corporate reporting. It also discusses the Lab’s ongoing projects which focus on stakeholder reporting and the reporting of risks, uncertainties and scenarios.

The podcast ia available on the FRC website.

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Podcast on IFRS Interpretations Committee developments

08 Jan 2021

The IASB has issued a podcast on the developments of the IFRS Interpretations Committee during the fourth quarter of 2020.

The podcast (30 minutes) is hosted by IFRS In­ter­pre­ta­tions Committee Chair and IASB Vice-Chair Sue Lloyd and Technical Staff member Patrina Buchanan and focuses on reverse factoring arrangements, cloud computing arrangements, classification of debt as current or non-current, defined benefit plans, and inflation cash flow hedge accounting.

For more in­for­ma­tion, see the press release on the IASB website.

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Response of Accountancy Europe to the ad personam mandate on non-financial reporting standard setting

08 Jan 2021

Accountancy Europe has responded to the consultation document on the ad personam mandate on potential need for changes to the governance and funding of EFRAG in the context of possible changes to non-financial reporting by companies.

In addition to proposals and comments on an advisory council, the proposed structure, due process matters, and the funding needed, the comment letter also discusses the cooperation with other standard setters and initiatives. Accountancy Europe notes, that it supports a “building block” approach to non-financial information (NFI) reporting standard setting: The base would be global standards for market transparency, achieved by the coordination, cooperation and consolidation of global NFI initiatives and additional “blocks” of EU NFI reporting standards could then be added to that, where necessary.

Under this scenario, Accountancy Europe notes, EFRAG’s role would be to endorse global NFI reporting standards in the EU and to develop the added “block” of EU NFI reporting standards important for the EU public policy objectives. The comment letter points out that international cooperation is the best way forward:

Therefore, we suggest EFRAG to collaborate with the IFRS Foundation, CDP, the Value Reporting Foundation, the Climate Disclosure Standards Board (CDSB) and the Global Reporting Initiative (GRI), to set the respective roles and task to avoid inefficiencies (e.g., output and funding) and to timely address the urgent issues at hand.

Please click to access the full comment letter on the Accountancy Europe website.

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UK adopts IFRS amendments for IBOR Phase 2 and amendments to IFRS 4

07 Jan 2021

After the end of the transition period on 31 December 2020, the UK ceased to apply EU law. IFRS Standards as adopted by the EU were brought into UK law, meaning that EU-IFRS for UK companies was effectively frozen at that point and a new mechanism for UK adoption of IFRS Standards came into effect.

The Secretary of State for Business, Energy and Industrial Strategy (BEIS), who has been given the power of endorsing and adopting international accounting standards while the UK Endorsement Board (UKEB) is still being established, has now adopted amendments to IFRS Standards for:

The endorsement criteria assessment and adoption statement for IBOR Phase 2 and the endorsement criteria assessment and adoption statement for amendments to IFRS 4 are available on the UK Endorsement Board (UKEB) website. 

The UKEB has also updated its adoption statement report which is available on its website here.

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UKEB website launched

07 Jan 2021

The UK Endorsement Board (UKEB) has launched its website. The UKEB is being set up as the body responsible for influencing the development and subsequently endorsing and adopting new or amended international accounting standards, issued by the International Accounting Standards Board (IASB), for use by UK companies, from 1 January 2021.

The website will provide access to all key developments in relation to the UKEB and its work, including:

  • UK-adopted international accounting standards;
  • UKEB adoption status report;
  • Other correspondance including UKEB appointments and meetings agendas and minutes; and
  • the UKEB work plan.

The website is available on the UKEB website here.

CAQ (US Center for Audit Quality) (light green) Image

Hyperinflationary economies - updated IPTF watch list available

06 Jan 2021

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 10 November 2020 meeting is now available and states the following view of the Task Force:

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

  • Argentina
  • Iran
  • Lebanon
  • South Sudan
  • Sudan
  • Venezuela
  • Zimbabwe

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

  • Suriname

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:

There are no countries in this category for this period.

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

  • Angola
  • Haiti
  • 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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HM Treasury issues new financial reporting manual (FReM)

05 Jan 2021

HM Treasury has issued a revised version of the government financial reporting manual (FReM) 2021-22.

The Government Financial Reporting Manual (FReM) is the technical accounting guide to the preparation of financial statements. It complements guidance on the handling of public funds published separately by the relevant authorities in England and Wales (HM Treasury and the Welsh Government respectively), Scotland (the Scottish Government) and Northern Ireland (the Executive Committee of the Northern Ireland Assembly). The FReM is prepared following consultation with the Financial Reporting Advisory Board (FRAB) and is issued by the relevant authorities.

The FReM applies directly to all entities, and to funds, flows of income and expenditure and any other accounts that are prepared on an accruals basis and consolidated within Whole of Government Accounts (with the exception of the accounts of any reportable activities that are not covered by an Accounts Direction). It does not apply to Local Government, those Public Corporations that are not Trading Funds, and NHS Trusts, NHS Foundation Trusts and Clinical Commissioning Groups.

The FReM is separated into four sections:

  • Part A: Purposes, principles and best practice
  • Part B: The form and content of government annual reports and accounts
  • Part C: Application of accounting standards for government annual reports and accounts
  • Part D: Further guidance for government annual reports and accounts

Application guidance on IFRS 16 Leases which will be effective in the public sector from 1 April 2022 has also been issued.

The latest version of the FReM and the IFRS 16 application guidance is available on the HM Treasury website.

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