Mr Hoogervorst began with an overview of the PFS project and provided comments related to subtotals (definition of operating profits and profit before financing and tax), labeling non-GAAP measurement as ‘management performance measures’, improvements to disaggregation, the disclosure of ‘unusual’ items of income or expenses, and the impact the PFS proposals will have to the quality and usefulness of the income statement.

Next, Mr Hoogervorst commented on the importance of management commentary (a topic he also covered in similar speech at the Climate-Related Financial Reporting Conference in April 2019) to provide broader financial information, such as the impact of intangibles. He mentioned the need to update the Management Commentary Practice Statement to accommodate new advances made in the environmental, sustainability and governance reporting space.

For more information, see the transcript of his speech on the IASB’s website.

The agenda for the DPOC meeting is summarised below.

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

The agenda for the meeting is sum­marised below:

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

In his more general remarks on the global economy, Mr Liikanen noted that the economic growth cycle is now maturing, with various factors that may impede its longevity. In fact, he noted, globalisation itself faces some challenges around the world.

Mr Liikanen then turned to the academic debate on whether digitalisation, the process of leveraging technology and digitisation to improve business performance can take up the slack in productivity. He described two schools of thought that have emerged and concluded that technology is an important enabler, but it needs to work itself through and the real benefits will only come once the procedures can be fully implemented.

Turning then to financial reporting, Mr Liikanen noted that investors seek diversification and investment opportunities. The digitisation of financial information can help them to achieve these goals if it facilitates cross-border transactions and supports transparent, accountable and efficient financial markets in a digital world.

At this point, Mr Liikanen pointed to the IFRS Taxonomy and and its increasing adoption around the world - most recently in Europe. He promised that the IFRS Foundation will continue to explore how technological developments affect the way financial information is consumed and what this means for the Foundation's Taxonomy strategy, as well as how technology-related innovations affect the standard-setting process.

Concluding, Mr Liikanen noted that the IFRS Foundation is about to embark on its own digital transformation. He pointed at a long-term plan for the IFRS Foundation to completely overhaul its technology systems that was signed off at the last meeting of the Trustees (the report from the meeting offers little detail but notes that plan will be discussed again at the next meeting of the Trustees, which will take place on 25-27 June 2019 in Munich).

Please click to access the full text of Mr Liikanen's speech on the IASB website.

The press release on the IASB website offers access to the files for the IFRS Taxonomy 2018, the IFRS Taxonomy Illustrated, and the IFRS Taxonomy versioning information in the Ukranian language.

The new guidelines on reporting climate-related information integrate the recommendations of the Taskforce on Climate-related Financial Disclosures (TCFD) of the Financial Stability Board (FSB).

In short, the new guidelines:

• accompany and are consistent with the EU Non-Financial Reporting Directive published in November 2014;
• supplement the general guidelines on non-financial reporting published in July 2017, which are still applicable;
• are based on proposals from Technical Expert Group (TEG) on Sustainable Finance published in January 2019;
• integrate the recommendations of the TCFD published in June 2017; and
• are not legally binding.

The new guidelines can be downloaded from the EC website, which also offers a press release, a short summary of the guidelines, and frequently asked questions.

For translations of the guidelines into all official languages of the European Union, please refer to the Official Journal of the European Union.

In addition, the Commission welcomes three important expert reports published by the TEG on sustainable finance (all links to the EC website):

• A taxonomy for environmentally-sustainable economic activities that provides practical guidance for policy makers, industry and investors on how best to support and invest in economic activities that contribute to achieving a climate neutral economy.
• A report on an EU Green Bond Standard recommending clear and comparable criteria for issuing green bonds.
• A report on EU climate benchmarks and benchmarks' ESG disclosures setting out the methodology and minimum technical requirements for indices that will enable investors to orient the choice of investors who wish to adopt a climate-conscious investment strategy, and address the risk of greenwashing.

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.

The consultation is being carried out at the request of the Department for Business, Energy and Industrial Strategy (BEIS) in response to its feedback statement on Insolvency and Corporate Governance. The review will assess the quality of independent board evaluation and identify ways in which board evaluation might be improved. In particular, the consultation seeks views on whether there is a need for:

• a code of practice for the providers of board evaluation services and formal arrangements for implementing and monitoring such a code;
• voluntary principles to be applied by listed companies when engaging external reviewers to undertake board evaluations; and
• guidance for listed companies on disclosure of the conduct and outcomes of their board evaluation, in accordance with the 2018 UK Corporate Governance Code.

Draft versions of these three resources are also included in the consultation.

The deadline for comments is 5 July 2019. The consultation can be accessed on the ICSA: The Governance Institute website.

The report makes several key recommendations on the future development of the Charities Statement of Recommended Practice (SORP):

• the SORP must be refocused to better address the needs of key users of charity reports and accounts (identified as trustees, donors and proxies who best represent the public and beneficiary interest)
• simpler reporting requirements for smaller charities should be introduced.  These were identified as the majority of users of the SORP;
• the SORP Committee should be retained but reformed in terms of size, composition and clarification of the respective roles of the SORP-making body and SORP Committee;
• it will be necessary to engage more broadly and with a wider variety of stakeholders if the SORP is to continue to be fit for purpose;
• the sector and charity regulators should collaborate to identify and codify best practice in non-statutory financial reporting; and
• the SORP-making body, supported by the Financial Reporting Council (or its successor), needs to ensure that the redesigned SORP development process takes effect and sufficient resources should be made available to implement the recommendations.

The SORP-making body will now consider the recommendations made in the report and a response and planned actions are expected to be published in autumn 2019.

A press release and the full report are available on the Charity Commission website.

We support the IASB’s response in proposing amendments to both IFRS 9 and IAS 39 that deal with the immediate need of addressing the effect of the uncertainty arising from changes in benchmark interest rates on the “highly probable” requirement for cash flow hedges and the designated risk for cash flow and fair value hedges and suggest the IASB work on finalizing these amendments and begin the work on its second phase of amendments concurrently.

In addition, we believe there is a lack of clarity in (1) the application to retrospective hedge effectiveness, (2) the measurement of hedge ineffectiveness, and (3) whether the amounts deferred in the cash flow hedge reserve should be reclassified to profit or loss when the entity ceases applying the amendment.

Please download the full comment letter here.