The IASB has also been discussing restoring amortisation of goodwill. In December 2017, the Board decided tentatively not to reintroduce amortisation and to focus on improving the impairment model instead. It confirmed this decision at its June 2019 meeting. However, the paper was the most heavily debated paper during the session as improving the impairment model has turned out to be very difficult, and the final decision was very close. The Board finally decided by a vote of 8 to 6 to confirm its preliminary view not to reintroduce amortisation and to retain an impairment-only model.

The FASB's invitation to comment offers a comprehensive analysis of the subsequent accounting for goodwill as well as a comparison with the IASB approach and the approach of the Japanese standard-setter ASBJ.

Comments on the the FASB's invitation to comment are due by 7 October 2019. For more information, please see the press release, a short explanatory video, and the invitation to comment on the FASB website.

The discussion paper Non-exchange transfers: A role for societal benefit? explored the accounting for transfers in which an entity received (or gives) value without directly giving (or receiving) approximately equal value in exchange.

The feedback statement describes the main comments received by EFRAG in response to its discussion paper.

Please click to access the feedback statement on the EFRAG website.

The Growth and Emerging Market Committee (GEMC) of the International Organization of Securities Commissions (IOSCO) has published a report Sustainable finance in emerging markets and the role of securities regulators, which provides 10 recommendations for emerging market member jurisdictions to consider when issuing regulations or guidance regarding sustainable financial instruments. Among other things, the recommendations include requirements for reporting and disclosure of material Environmental, Social and Governance (ESG) specific risks, aimed at enhancing transparency. Please plick to access the report on the IOSCO website.

The United Nations Conference on Trade and Development (UNCTAD) and the International Integrated Reporting Council (IIRC) have signed an updated Memorandum of Understanding to reaffirm their commitment to integrating the United Nation’s Sustainable Development Goals (SDGs) into the corporate reporting cycle. Please click to access the press release on the IIRC website.

The IIRC has announced that its Chief Executive Officer Richard Howitt has stepped down after nearly three years’ service. Charles Tilley OBE has been appointed interim CEO. For more information, please see the press release on the IIRC website.

The President of the French standard-setter Autorité des Normes Comptables (ANC), Mr Patrick de Cambourg, has released a report on corporate non-financial reporting, at the request of the French Minister of Economy and Finance. The report entitled Ensuring the relevance and reliability of non-financial corporate information: an ambition and a competitive advantage for a sustainable Europe analyses ways of consolidating the development of extra-financial reporting by companies, so that, in the long run, it gradually takes on a status comparable to that of financial information. The report aims to define the conditions for the development of high-quality extra-financial information. In addition, the report aims to encourage greater harmonisation and comparability of extra-financial information. After an overview of the various existing standards and initiatives, the report assesses the relevance of extra-financial information in terms of quality, reliability, presentation, implementation cost and verifiability, as well as its association with financial data. Please click to access the report on the ANC website.

The UK Government has launched its first Green Finance Strategy, outlining a wide range of actions to support financial system that supports and reaps the opportunities of a low-carbon and environmentally sustainable economy. In response, the Financial Reporting Council (FRC) has issued a joint statement with other financial regulators, including the Prudential Regulation Authority (PRA), Financial Conduct Authority (FCA) and The Pensions Regulator (TPR) welcoming the strategy.

The Japanese Ministry of Economy, Trade and Industry (METI) has announced the inauguration of a new body called the “TCFD Consortium” as an opportunity for holding discussions on effective corporate information disclosure and efforts for leading disclosed information to appropriate decision making on investment by financial institutes and other entities. The Meti itself, the Financial Services Agency (FSA) and the Ministry of the Environment (MOE) will participate in the consortium as observers. Please click for more information on the METI website.

The Japan Exchange Group (JPX) has published a Japanese translation of the SSE Model Guidance on reporting ESG information to investors and encourages listed companies to make use of this resource. Please click to access the press release and the translation on the SSE website.

The European Court of Auditors (ECA) has published a review taking stock of the status of reporting on the achievement of the SDGs and sustainability at EU level as well as reporting by individual EU institutions and agencies. There is no specific legal obligation for the Commission or other EU institutions to produce sustainability reports. However, since the EU has committed itself to the SDGs and to achieving sustainable development in general, sustainability reporting would be expected to be an integral part of reporting on performance and results. Please click to access the report on the ECA website.

The European Commission welcomes the latest step to drive forward sustainable finance in the EU, with the launch of a call for feedback on a classification system – or “taxonomy” – for environmentally-sustainable economic activities. The consultation is being launched by the Technical Expert Group (TEG) on Sustainable Finance.

The revisions reflect:

• revisions to UK auditing standards (ISAs (UK)), in particular ISA (UK) 540 (Revised December 2018), Auditing Accounting Estimates and Related Disclosures;
• guidance relevant to the audit of estimates for expected credit losses;
• changes in relevant legislation and regulation (at the time of publication, certain EU regulations, including binding technical standards, apply directly to UK banks and building societies. References to these are made in this revised Note. When the UK ceases to be a member of the EU (Brexit) the FRC indicates that these references will be updated accordingly); and
• the establishment of the Prudential Regulatory Authority (PRA) and Financial Conduct Authority (FCA) in place of the Financial Services Authority (FSA).

The press release, the revised Practice Note 19 and the feedback statement and impact assessment: the revision of practice note 19 are all available on the FRC websitare all available at FRC website. the FRC website.are all available on the FRC website.

In his speech, Dr Peter lauded the work of the IFRS Foundation/IASB and the German standard-setter DRSC, which he noted has become a strong voice in Europe in recent years.

He then went on to state that BMW decided in 2001 to follow IFRSs and that looking back that was "definitely the right decision" as uniform accounting standards are more valuable today than ever before.

He admitted that such a comprehensive set of rules also raises certain challenges for ongoing business operations and that BMW had to spend a substantial amount of money on personnel and IT costs. And he also noted that not all reported figures are truly comparable and that increasingly earnings are being adjusted permanently for one-time effects - which, as he said, BMW does not do.

Dr Peter also noted while companies are busy implementing new standards, stakeholders' interest in forecasts is increasing - as is the interest in non-financial information. However, he noted, he sees limited possibilities for standardisation in this area.

Concluding his speech, Dr Peter turned to Europe again and noted growing efforts by the European Commission to regulate European companies even more closely and even to discuss the possibility of “EU-IFRS” yet again. He stated:

We firmly believe in the benefits of a globally standardised body of rules — which has always been the core idea of IFRS. For that reason, we oppose the concept of special EU-IFRS. In the volatile global political environment in which we currently find ourselves, it is more important than ever to stress the importance of a common regulatory space. It is easy to forget how far the introduction of common standards has brought us. We now take many of these things for granted.

Please click to access the full transcript of the speech of Dr Peter on the IASB website.

The presentations were given by IASB Board member Ann Tarca and IASB Technical Staff Anne McGeachin. They covered the following topics (links to the slides on the IASB website):

• IASB technical update: IFRS amendments expected in 2019, Consultation documents, Maintenance projects — issued and upcoming exposure drafts, Work in progress 2019, Completed projects (76 slides)
• Guide to new standards — IFRS 9, IFRS 15, IFRS 16 and research opportunities (67 slides)
• Primary financial statements (19 slides)

The first podcast (25 minutes) focuses on the June 2019 meeting of the Interpretations Committee. Among the topics covered are questions about applying the new financial instruments, revenue recognition and leases Standards — IFRS 9, IFRS 15 and IFRS 16 — as well as the accounting for holdings of cryptocurrencies.

Please click to access the podcast through the press release on the IASB website.

The webinar is a recording that took place to provide national standard-setters with an overview of the proposed amendments to IFRS 17 right after the exposure draft was published.

Please click to access the 25 minute webinar through the press release on the IASB website.

The FRC has made its expectations of UK boards very clear stating:

The Boards of UK companies have a responsibility to consider their impact on the environment and the likely consequences of any business decisions in the long-term. They should therefore address, and where relevant report on, the effects of climate change (both direct and indirect).  Reporting should set out how the company has taken into account the resilience of the company’s business model and its risks, uncertainties and viability in both the immediate and longer-term in light of climate change. Companies should also reflect the current or future impacts of climate change on their financial position, for example in the valuation of their assets, assumptions used in impairment testing, depreciation rates, decommissioning, restoration and other similar liabilities and financial risk disclosures.

In its statement, the FRC highlights the following activities which it has undertaken (or is planning to undertake) to assists companies, their Boards and investors to fulfil their responsibilities:

• The updated UK Corporate Governance Code requires Boards to discuss how the matters (which include environmental matters) set out in section 172 of the Companies Act 2006 have been considered by the company and report on how opportunities and risk to the future success of the business have been considered and addressed.
• The Strategic Report requires companies to report on their principal risks and environmental matters when material. The FRC’s Guidance on the Strategic Report has been updated to encourage better reporting on non-financial matters and the requirement for companies to report on the responsibilities of directors under section 172, that includes how they have regard to the environment in their business operations.
• The new UK Stewardship Code will require investors to integrate stewardship and investment, taking into account material environmental, social and governance issues, including climate change.
• The FRC’s project on the Future of Corporate Reporting will also consider the need for improved non-financial/sustainability information from companies.

In order to monitor how companies and their advisors fulfil their responsibilities, the FRC will, as part of its Corporate Reporting Review, continue to review whether companies are complying with the statutory disclosure requirements of the strategic report (which includes reporting on principal risks and uncertainties) as well as any financial statement implications of climate change.  As part of its Audit Quality Review, the FRC will also include consideration of the adequacy of the auditors’ work on principal risk disclosures, including climate risk and the financial statement implications of climate change.

Later in the year, the Financial Reporting Lab will provide practical guidance on how companies can best consider and report on climate related risk and opportunities. 

Click for:

• Press release (link to FRC website)
• Green Finance Strategy (link to BEIS website)

The position paper sets out the seven key principles report preparers should follow for achieving such transparency and accountability: materiality, completeness, accuracy, balance, clarity, comparability and reliability. It notes that these common principles are a reminder that the CRD participants have similar expectations from companies in preparing and disclosing information but also states that transparency needs accountability in order to drive effective behaviour or performance: disclosing in itself is not enough if those holding to account do not have the power to influence the behaviour or performance.

The position paper follows an earlier paper on SDGs and the future of corporate reporting and a consultation better alignment through an online survey and a series of global roundtables held in Australia, Colombia, France, Germany, Italy, Japan, Malaysia, Poland, South Africa, US and UK from March until June 2019.

Please click for the following additional information on the CRD website:

• Press release
• Access to the position paper
• Announcement of consultation results
• Recording of a webinar on the consultation results