The Board discussed the primary financial statements project, focusing on aggregation and disaggregation of line items in the financial statements, criteria to help entities determine whether to analyse expenses by function or by nature and some remaining issues in relation to management performance measures (MPMs) and earnings per share (adjusted EPS) from the April 2018 Board meeting.

The Board had an initial discussion of establishing guidance for it to use when developing and drafting disclosure objectives and requirements.

The Board considered the staff analysis of Business Combinations under Common Control and what they describe as the Full Fair Value and Ceiling approaches.

The Board supported the staff recommendation to measure rate-regulated assets on a basis that reflects estimates of the future cash flows arising from the assets, updated if necessary, and discounted if there is a significant financing component.

The Board was asked to decide the form of consultation document that should be issued as the next step in the project on goodwill and Impairment. The Board had asked the staff to provide it with some additional analysis when it considered this in April. However, the Board deferred that decision again and asked the staff to bring back the alternative solutions and a strategy.

The Board decided to propose an amendment (in the next Annual Improvements cycle) to an illustrative example in relation to lease incentives that is included in the material accompanying IFRS 16 Leases.

The Board was given a summary of the Insurance Contracts Transition Resource Group meeting held on 2 May and a report on implementation challenges.

Below is an analysis of all changes made to the work plan since our last analysis on 30 April 2018.

Maintenance project

• Lease incentives (amendments to IFRS 16 Illustrative Examples) — Added project to work plan; no milestone or expected date listed.

Research project

• Goodwill and impairment — The IASB removed the expected date for a DP or ED; the previous work plan had listed H1 2018.

The above is a faithful comparison of the IASB work plan at 30 April 2018 and at 25 May 2018. For access to the current IASB work plan at any time, please click here.

The World Business Council for Sustainable Development (WBCSD) has launched the Social and Human Capital Coalition, designed to help companies recognise, measure and value the importance of people and communities. As part of the launch, the Coalition is also opening the Social and Human Capital Protocol for public consultation until 16 June 2018. Please click for more information on the WBCSD website.

The Task Force on Climate-related Financial Disclosures (TCFD) and the Climate Disclosure Standards Board (CDSB) have launched the TCFD Knowledge Hub – a platform with relevant insights, tools and resources to help organisations implement the TCFD recommendations. The TCFD Knowledge Hub is the first online platform to provide useful information on quality climate-related disclosures in line with the recommendations of the Task Force. Please click to access the hub here.

The CDSB has also published an introduction to scenario analysis, tips, pitfalls and insights as scenario analysis presents one of the biggest challenges organisations are facing when reporting climate information following the TCFD recommendations. Please click to access the introduction to scenario analysis on the CDSB website.

The Institute of Chartered Accountants in England and Wales (ICAEW) has produced a practical guide Reporting on climate risks and opportunities. The guide is designed to help organisations considering how best to implement the TCFD recommendations which focus on communicating the financial impact of climate change on reporting organisations.

The United Nations Environment Programme Finance Initiative (UNEP FI) has published Connecting Finance and Natural Capital: A Supplement to the Natural Capital Protocol. The supplement is a tool for financial institutions to assess how their business is impacted by, and depends upon the natural world. Please click to access the supplement on the UNEP FI website.

The Global Reporting Initiative (GRI) has published an article sharing the process that the organisation underwent when writing its own sustainability report, the problems that came up along the way, and the solutions that were found. The article is available on the GRI website.

There have been repeated calls in the past for the IASB to consider how technological developments can be used to overcome problems or find solutions for issues with projects on its agenda. The principles of disclosure project and the perceived "disclosure overload" immediately spring to mind, as does the primary financial statements project. The more general field of wider corporate reporting, which the IASB is aiming to address through updating the Management Commentary Practice Statement, would also offer itself.

It seems that the IASB is set to actively explore opportunities arising from technological disruption as the job description includes research into the possible effects of new and emerging technology on the delivery and consumption of financial information including likely impact on standard-setting as well as the education of the Board on relevant new technologies. Threats the IASB might be facing from changes in technology are also included among the responsibilities.

The full job description is available on the IASB website.

The practical guidance is in the style of FAQs and covers benefits, implementation of the recommendations and next steps.

A press release and the full guidance, Reporting on climate risks and opportunities, are available on the ICAEW website.

There are seven topics on the agenda.

Tuesday 22 May

the Board will discuss the Primary Financial Statements project, focusing on aggregation and disaggregation of line items in the financial statements, criteria to help entities determine whether to analyse expenses by function or by nature and some remaining issues in relation to management performance measures (MPMs) and earnings per share (adjusted EPS) from the April 2018 Board meeting.

Wednesday 23 May

The Board will discuss disclosure initiative and an initial discussion of the development of guidance for the Board to use when developing and drafting disclosure objectives and requirements.

The staff will continue its analysis of Business Combinations under Common Control and what they describe as the Full Fair Value and Ceiling approaches.

For the project on Rate-regulated Activities the discussion moves on to consider how regulatory assets that are recognised in the model should be measured.

The Board will be asked to decide the form of consultation document that should be issued as the next step in the project on Goodwill and Impairment. The Board had asked the staff to provide it with some additional analysis when it considered this in April.

The Board will consider whether it needs to amend an illustrative example in relation to lease incentives that is included in the material accompanying IFRS 16 Leases.

For Insurance Contracts the Board will be given a summary of the Transition Resource Group held on 2 May and a report on implementation challenges.

More in­for­ma­tion

Our pre-meet­ing summaries are available on our May meeting note page and will be sup­ple­mented with our popular meeting notes after the meeting.

After a short introduction by EFRAG President Jean-Paul Gauzès who highlighted EFRAG's current efforts in connection with developing the draft endorsement advice (expected in September 2018, with a final endorsement advice expected in December 2018) and mentioned case studies, structured interviews, independent research, and briefing papers, the Parliamentarians raised a number of questions.

• Content of the standard. The standard itself was generally agreed to bring significant improvements to the accounting for insurance contracts; questions on the content were more related to detailed aspects. One question was for example on the level of aggregation and whether a high level of aggregation would lead to a loss of information, another one whether bank insurers have a problem with the compatibility of IFRS 9 and IFRS 17. The level of aggregation was acknowledged to be an issue where a trade-off has to be achieved; bank insurers were reported to be satisfied with deferring the application of IFRS 9 until 2021.
• Complexity and costs. There was also general agreement that the standard is complex (one Parliamentarian claimed that IFRS 17 is more complex for insurers than IFRS 9 was for banks) and that the costs for implementing it will be significant. In that context the question came up whether implementing the standard by 2021 was feasible. As regards the complexity and resulting costs, the EFRAG representatives shared the concern and stated that they would look in depth into the issue and the balance between the costs (mostly to the insurers) and the benefits (mostly to the investors). They warned that this might lead to having to compare quantitative information with qualitative information. The 2021 implementation date was acknowledged to become a topic of increasing discussion even though 3.5 years was considered to be generous and even though many insurers are signaling that they will be ready in time.
• Impact. It was asked whether the introduction of IFRS 17 would lead to changes in insurance products and prices. It was also noted that the United States do not apply IFRSs and would therefore not adopt IFRS 17 - would this pose a problem? The EFRAG representatives replied that insurers had so far signaled that products and prices would not change as a result of the application of IFRS 17. They also noted that while the United States are not on IFRSs they are working on an insurance project that "points in the same direction" regarding some important aspects. EFRAG would look closely into competition consequences.
• General. The EFRAG representatives were asked how many insurers had chosen to defer the application of IFRS 9 until 2021. The EFRAG President noted that he did not have any numbers yet but was expecting more information "in the coming weeks". It was also asked which jurisdictions saw the most resistance against IFRS 17. Again, the EFRAG President did not give a direct answer but treated the Parliamentarians to some private thoughts on national characteristics making out three groups of countries: those who are happy with general rules, those who are "word obsessed", and those who grumble first but then simply apply what has been decided.

A recording of the meeting is available on the ECON website. Please note that the recording covers the whole morning, which also saw the discussion of other topics. The exchange of views with EFRAG begins 1 hour and 50 minutes into the recording.

The CMAC is a group of professional financial analysts who meet three times a year with members of the IASB to provide the views of professional investors on financial reporting issues.

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

Participants will be asked to answer eight randomly selected questions from a pool of more than 50. The questions are based on the information in the revised Conceptual Framework published in March 2018.

The exposure draft proposes amendments to the Government Financial Reporting Manual (FReM) and is structured to illustrate the amendments proposed for each chapter for which an amendment is proposed. The consultation includes:

• An overview of IFRS 16.
• Applicability of IFRS 16 for public sector reporting entities.
• Proposed amendments to the FReM.

The effective date for the proposed amendments is 1 April 2019.

The press release and full consultation are available on the HM Treasury website.

Comments are invited until 31 July 2018.