Global accountancy bodies call for improved SDG disclosures

20 Jan, 2020

The International Federation of Accountants (IFAC), the Association of Chartered Certified Accountants (ACCA), the Institute of Chartered Accountants of Scotland (ICAS), the Chartered Accountants Australia and New Zealand (CA ANZ), the International Integrated Reporting Council (IIRC) and the World Benchmarking Alliance have jointly published a report calling for improved UN Sustainable Development Goals (SDG) disclosures.

The report follows on the consultation paper Recommendations for SDG Disclosures and considers feedback from the consultation. The recommendations for SDG Disclosure are designed to be both used in conjunction with existing reporting frameworks and neutral with respect to them. The recommendations are also SDG specific, recognising the complexity and interconnectedness of the sustainable development issues that the SDGs address.

Please click for the following information on the IIRC website:

GPF seeks members

15 Jan, 2020

The Global Preparers Forum (GPF) is seeking new members with an emphasis for candidates from Africa, Asia-Oceania, and European regions with a background in technology and/or retail.

New members will start on 1 March 2020 for a term lasting between two-to-five years. For more in­for­ma­tion, see the press release on the IASB’s website.

Hyperinflationary economies - updated IPTF watch list available

27 Jan, 2020

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 19 November 2019 meeting is now available and states the following view of the Task Force:

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

  • Argentina
  • South Sudan
  • Sudan
  • Venezuela
  • Zimbabwe

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

  • Islamic Republic of Iran

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:

  • Angola
  • Suriname

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

  • Democratic Republic of Congo
  • 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.

IASB finalises amendments to IAS 1 to clarify the classification of liabilities

23 Jan, 2020

The International Accounting Standards Board (IASB) has issued 'Classification of Liabilities as Current or Non-current (Amendments to IAS 1)' providing a more general approach to the classification of liabilities under IAS 1 based on the contractual arrangements in place at the reporting date.



The issue was originally addressed as part of the annual improvements project 2010 -2012 cycle. Exposure Draft ED/2012/1 Annual Improvements to IFRSs (2010—2012 Cycle), published in May 2012, proposed amendments to IAS 1.73 to clarify that a liability is classified as non-current if an entity expects, and has the discretion, to refinance or roll over an obligation for at least twelve months after the reporting period under an existing loan facility with the same lender, on the same or similar terms. During 2013, however, the IASB decided not to finalise the amendment, but instead pursue a narrow-scope project to refine the existing guidance in IAS 1 on when liabilities should be classified as current.

In February 2015, the Board published its proposals in the Exposure Draft  ED/2015/1 Classification of Liabilities (Proposed amendments to IAS 1). The Board discussed feedback on the ED from December 2015 to September 2019, pausing the project between 2016 and 2018 while it finalised revisions to the definition of a liability in the Conceptual Framework. As a result of these discussions, the Board made no fundamental changes to the proposed amendments but decided to clarify some aspects of them.



The amendments in Classification of Liabilities as Current or Non-current (Amendments to IAS 1) affect only the presentation of liabilities in the statement of financial position — not the amount or timing of recognition of any asset, liability income or expenses, or the information that entities disclose about those items. They:

  • clarify that the classification of liabilities as current or non-current should be based on rights that are in existence at the end of the reporting period and align the wording in all affected paragraphs to refer to the "right" to defer settlement by at least twelve months and make explicit that only rights in place "at the end of the reporting period" should affect the classification of a liability;
  • clarify that classification is unaffected by expectations about whether an entity will exercise its right to defer settlement of a liability; and
  • make clear that settlement refers to the transfer to the counterparty of cash, equity instruments, other assets or services.



Effective date and transition

The amendments are effective for annual reporting periods beginning on or after 1 January 2022 and are to be applied retrospectively. Earlier application is permitted.


Additional information

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IASB publishes 'Request for Information: Comprehensive Review of the IFRS for SMEs Standard'

28 Jan, 2020

The IASB, in cooperation with the SME Implementation Group (SMEIG), has developed and issued a request for information seeking comments on strategic and general questions, specific sections of the IFRS for SMEs, as well as new topics and other matters related to the IFRS for SMEs. The deadline for submitting responses has been extended until 27 October 2020.

IFRS for SMEs was first issued in July 2009. A first comprehensive review of the standard took place between 2012 and 2014. The IASB has now launched a second review with the objective of seeking views on whether and how to align the IFRS for SMEs with full IFRSs.

The Request for Information is divided into three parts:

  • Part A contains strategic and general questions.
  • Part B contains questions on specific sections of the IFRS for SMEs and their alignment with the full IFRSs; and
  • Part C contains questions on new topics and other matters related to the IFRS for SMEs.

A summary of the questions asked in each Part is set out in the table at the bottom of the article.

The SMEIG is expected to review comments on the request for information and make recommendations to the IASB on possible amendments.

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Stakeholders can submit feedback by:

  • Comment letter process — For stakeholders that currently have this process in place
  • Optional response document — For stakeholders without an existing comment letter process, but with the time and resources to provide one
  • Online survey — For stakeholders with limited time and resources


Summary of questions asked in the request for information

Part A - Strategic and general questions

  • Alignment approach
    • Should the IFRS for SMEs be aligned with full IFRSs?
    • What extent of alignment of the IFRS for SMEs with full IFRSs is most useful, and why?
  • Alignment principles
    • Do the Board's proposed principles provide a framework to assist in determining whether and how the IFRS for SMEs should be aligned with full IFRSs?
  • When to consider alignment
    • Of the three possible dates for when to consider alignment, which is preferable?

Part B - Specific issues

  • Should Section 2 of the IFRS for SMEs be aligned with the 2018 Conceptual Framework and how?
  • Should Section 9 of the IFRS for SMEs be aligned with IFRS 10 and how?
  • Should Section 11 of the IFRS for SMEs be aligned with IFRS 9 and how?
  • Should Section 15 of the IFRS for SMEs be aligned with IFRS 11 and how?
  • Should Section 19 of the IFRS for SMEs be aligned with IFRS 3 and how?
  • Should Section 20 of the IFRS for SMEs be aligned with IFRS 16 and how?
  • Should Section 23 of the IFRS for SMEs be aligned with IFRS 15 and how?
  • Should Section 28 of the IFRS for SMEs be aligned with IAS 19 and how?
  • Should the IFRS for SMEs be aligned with IFRS 13 and how?
  • Should multiple sections of the IFRS for SMEs for amendments to IFRSs and IFRIC Interpretations and how?

Part C - New topics and other matters

  • Should the IFRS for SMEs be aligned with IFRS 14 or not?
  • Should holdings of cryptocurrency be addressed in the IFRS for SMEs?
  • Are there difficulties in applying the simplifications allowed by paragraph 28.19 of the IFRS for SMEs?
  • Are there any topics the IFRS for SMEs does not address that should be the subject of specific requirements?
  • Are there additional issues that should be brought to the Board’s attention relating to the IFRS for SMEs?

IASB publishes overview of consultation documents to be expected in 2020

08 Jan, 2020

In 2020, the IASB plans to publish a number of consultation documents, including a discussion paper on goodwill and impairment, an exposure draft in its management commentary (wider corporate reporting) project, and a request for information regarding the 2020 Agenda consultation.

The full list of consultations to be expected and the currently expected timing is given below:

Project Type of consultation document When to be expected?
Goodwill and impairment Discussion paper Q1 2020
Comprehensive review of the IFRS for SMEs Request for information Q1 2020
Business combinations under common control Discussion paper Q2 2020
IBOR reform and its effects on financial reporting — Phase 2 Exposure draft Q2 2020
Rate-regulated activities Exposure draft Q2 2020
Post-implementation review of IFRS 10, IFRS 11, and IFRS 12 Request for information Q2 2020
Disclosure initiative — Targeted standards-level review of disclosures Exposure draft H2 2020
Management commentary (wider corporate reporting) Exposure draft H2 2020
2020 Agenda consultation Request for information H2 2020

A corresponding press release is available on the IASB website.

IBC discusses Big4 report on reporting sustainability information at WEF

24 Jan, 2020

At the World Economic Forum (WEF), the chief executive officers of many of the world’s largest companies expressed support for aligning on a core set of metrics and disclosures in their annual reports on the non-financial aspects of business performance such as greenhouse gas emissions and strategies, diversity, employee health and well-being and other factors.

The International Business Council (IBC) of the WEF discussed a proposal prepared by the Forum in collaboration with the Big Four accounting firms – Deloitte, EY, KPMG and PwC – titled Toward Common Metrics and Consistent Reporting of Sustainable Value Creation. The proposal recommends a set of core metrics and recommended disclosures. The intent is for the metrics to be reflected in the mainstream annual reports of companies on a consistent basis across industry sectors and countries.

The proposed metrics and recommended disclosures have been organized into four pillars that are aligned with the UN Sustainable Development Goals (SDGs) and principal Environmental, Social, and Governance (ESG) domains. They are:

Principles of Governance Planet People Prosperity
aligned with SDGs 12, 16 and 17 aligned with SDGs 6, 7, 12, 13, 14 and 15 aligned with SDGs 1,3, 4, 5 and 10 aligned with SDGs 1, 8, 9 and 10
focuses on a company’s commitment to ethics and societal benefit looks at the themes of climate sustainability and environmental responsibility examines the roles human and social capital play in business focuses on business contributions to equitable, innovative growth

The metrics are drawn, wherever possible, from existing standards and disclosures such as GRI, SASB, TCFD, CDSB and others. Instead of reinventing the wheel by creating a new standard, they aim to amplify and elevate the rigorous work that has already been done by these initiatives, bringing their most material aspects into mainstream reports on a consistent basis.

Adoption of such recommended universal metrics and disclosures by IBC companies is intended to be a catalyst for greater alignment and synergy among existing ESG standards and ultimately a system-wide solution, such as a generally accepted international accounting or other reporting standard drawn from best practice.

Please click to download Toward Common Metrics and Consistent Reporting of Sustainable Value Creation from the WEF website.

ICAEW UK GAAP update webinar

22 Jan, 2020

The Institute of Chartered Accountants in England and Wales (ICAEW) will be hosting a webinar outlining latest developments and implementation issues in UK GAAP and also recent changes to reporting regulations.

Specific topics to be covered include:

Further details are available on the ICAEW website.

ICAEW webinar on the TCFD recommendations

22 Jan, 2020

The Institute of Chartered Accountants in England and Wales (ICAEW) will be hosting a webinar looking at the Task Force on Climate-related Financial Disclosures' recommendations in more detail.

Further details are available on the ICAEW website.

ICAS report on fair value measurement of financial instruments

13 Jan, 2020

The Institute of Chartered Accountants of Scotland (ICAS) has released a report examining the preparation and evaluation of fair value measurements for financial instruments reported in the financial statements.

ICAS joined forces with the International Association of Accounting Education and Research (IAAER) and the International Audit and Assurance Standard Board (IAASB) to commission qualitative research on the valuation of financial instruments. Previous research had been done from the perspective of auditors, but this research focuses on the perspective of the valuation specialist.

While the report notes no distinct differences across geographical regions, it analyses pressure points and potential conflicts in the four phases of the production of fair value measurements reported in financial statements: 1) project acquisition and planning; 2) scoping, valuation approach, and methodology; 3) estimate preparation and relationship management; and 4) negotiations and final estimate reporting.

The report does include some policy recommendations for regulators, standard-setters, and other stakeholders:

  • Auditors and regulators should consider the relative advantages and disadvantages of adopting the independent estimate approach as best practice when evaluating clients’ fair value measurements;
  • Standard-setters should consider strengthening auditor awareness of the effects of budget and timeline pressures, and scope constraints, and encourage a more collaborative team-based approach between auditors and specialists;
  • Regulators should consider incorporating an evaluation of management’s competence related to fair value measurements as a component of the auditors’ risk assessment process; and
  • Standard-setters should consider enhancing corporate governance by promoting understanding of the subjectivity inherent in fair value measurements among the board and audit committees.

Please click to access the full report on the ICAS website.


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