March

Consultation launched to assist trustees on aligning their pension scheme to the TCFD recommendations

17 Mar, 2020

A new consultation has been launched which sets out non-statutory guidance for the trustees of occupational pension schemes on assessing, managing and reporting climate-related risks in line with the Taskforce on Climate-Related Financial Disclosures (TCFD).

The draft guidance has been drawn up by the Pensions Climate Risk Industry Group (PCRIG), a group set up last summer by the Department of Work and Pensions, TPR and other pension representatives.

The draft guidance is split into three parts:

  • Part 1 - introduces climate risk as a financial risk to pension schemes, trustees’ legal requirements and the TCFD recommendations.
  • Part 2 - sets out a suggested approach for the integration and disclosure of climate risk within the typical governance and decision-making processes of pension trustee boards, including defining investment beliefs, setting investment strategy, manager selection, and monitoring.
  • Part 3 - contains technical details on recommended scenario analysis and metrics that trustees may wish to consider using to record and report their findings.

The consultation closes at 11.45pm on 7 May 2020. PCRIG intends to publish the final guidance in the autumn.

A press relese and the guidance are available here.ss release and the updated guidance is available on the FRC website. 

Coronavirus crisis: Implications on reporting and auditing and resources for accountants

23 Mar, 2020

Accountancy Europe has released an article exploring coronavirus’ effects. In addition, Accountancy Europe is collecting all resources relevant for European professional accountants.

Please click to access the following information on the Accountancy Europe website.

The article explores coronavirus’ effects on:

  • accounting and reporting for companies as of 31 December 2019,
  • accounting and reporting for companies with year-ends in 2020,
  • auditing financial statements on 31 December 2019 and beyond, and
  • practical matters for the audit of financial statements.

The list of resources relevant for European professional accountants will be updated regularly.

EFRAG publishes February 2020 issue of 'EFRAG Update'

06 Mar, 2020

The European Financial Reporting Advisory Group (EFRAG) has published an 'EFRAG Update' summarising public technical discussions held and decisions made during February 2020.

The update reports on the EFRAG Board meeting on 18 February, the EFRAG Technical Expert Group conference call on 5 February and the Project Task Force on Climate-Related Reporting meeting on 7 February.

The update also lists EFRAG publications issued in February: 

Please click to download the February EFRAG update from the EFRAG website. 

EFRAG publishes pre-consultation document on IBOR ED

31 Mar, 2020

The IASB expects to​​ issue an exposure draft on its project on the IBOR reform Phase 2 during April 2020 with a comment period of 45 days.​​ In order to maximise the period during which its constituents can comment on its draft comment, the European Financial Reporting Advisory Group (EFRAG) has now published pre-consultation document on the exposure draft.

The views in the document are based on the IASB tentative decisions available on 31 March 2020. They will form the basis for EFRAG’s draft comment letter that will be published as quickly as possible once the IASB has published its exposure draft.

In the document, EFRAG welcomes the tentative decisions taken by the IASB during its deliberations on the second phase of its project on the IBOR reform. In particular, EFRAG supports providing a practical expedient allowing an entity to apply paragraph B.5.4.5 of IFRS 9 Financial Instruments to account for mod​ifications related to IBOR reform; supports the tentative decisions taken on hedge accounting; and observes that the proposed disclosures will assist users of financial statements in understanding the effects of IBOR reform on an entity.​

Please click for more information on the EFRAG website:

EFRAG requests the IASB extend consultation period

27 Mar, 2020

The EFRAG have sent a letter to the IASB requesting an extension to the public consultation phase of recent or soon-to-be issued publications due to the affects of the coronavirus disease pandemic. In addition, the EFRAG suggests the amendment to IFRS 9 (IBOR Phase 2) should be published quickly after the publication of the exposure draft in April 2020 in order to avoid any potential complications.

For more information, see the press release and letter on the EFRAG’s Web site.

EFRAG sends letter to the IASB on IFRS 17 amendments

26 Mar, 2020

In September 2018, the European Financial Reporting Advisory Group (EFRAG) submitted a letter to the IASB regarding IFRS 17 'Insurance Contracts' noting a number of concerns of EFRAG's constituents.

EFRAG has now sent a second letter sincerely appreciating the IASB’s efforts to address issues associated with the implementation of IFRS 17 identified in the September 2018 letter. However, while EFRAG is appreciative of the changes made, this new letter expresses regret that some of the conclusions reached by the Board deviate from EFRAG’s recommendations. In particular, EFRAG refers to the annual cohort requirement. In February 2020, the IASB discussed the issue but came to the conclusion that it was not possible to specify an exemption without the use of ‘bright lines’ and without developing a particularly complex set of criteria.

Please click to access the letter on the EFRAG website.

EFRAG to conduct field-testing on IASB’s project on primary financial statements

06 Mar, 2020

The EFRAG, in coordination with European National Standard Setters and the IASB, will conduct field-testing on the IASB’s Exposure Draft ED/2019/7, ‘General Presentation and Disclosures’, and invites companies to participate in the field-testing.

The field-testing will help ‘identify potential implementation and application concerns, to determine whether there is a need for additional guidance, and to estimate the effort required to implement and apply the proposals’. The deadline to participate in the field-testing is 3 April 2020.

For more information, see the press release on the EFRAG’s website.  A summary report of the results of the field test is available on the EFRAG website here.

ESMA statement on the accounting implications of the COVID-19 economic support and relief measures

25 Mar, 2020

The European Securities and Markets Authority (ESMA) has issued a public statement on some accounting implications of the economic support and relief measures adopted by EU Member States in response to the COVID-19 outbreak. The measures include moratoria on repayment of loans and have an impact on the calculation of expected credit losses in accordance with IFRS 9.

ESMA has issued the statement in order to promote consistent application of IFRSs in the EU and avoid divergence in practice on the application of IFRS 9 Financial Instruments in the specific context of the COVID-19 outbreak, specifically as regards the calculation of expected credit losses and related disclosure requirements. In ESMA’s view, the principles-based nature of IFRS 9 includes sufficient flexibility to faithfully reflect the specific circumstances of the COVID-19 outbreak and the associated public policy measures.

Please click to access the statement on the ESMA website.

The European Banking Authority (EBA) has also issued a related statement regarding the prudential framework and accounting implications of COVID-19. The two statements are consistent as regards financial reporting. The statement can be accessed on the EBA website.  Further detailed guidelines on treatment of public and private moratoria in light of COVID-19 measures can be found on the EBA website.

European Lab seeks members for its second task force

13 Mar, 2020

The European Financial Reporting Advisory Group (EFRAG) has published a call for candidates for members of a new project task force on reporting of non-financial risks and opportunities and linkage to the business model.

The aim of the new project of the European Corporate Reporting Lab is to identify good practices on the reporting of non-financial risks and opportunities and their linkage to the business model from a sustainability perspective and addressing what is commonly known as ESG factors. The project is expected to consider the information needs and expectations of a wide range of users and other stakeholders, the extent to which they are addressed by current reporting practices, and the challenges faced by companies in providing that information.

The deadline for applications has been moved to 4 May 2020 (originally 10 April 2020).

Please click for more information in the press release on the EFRAG website.

FCA issues consultation paper proposing improvements to climate-related disclosures for listed companies

09 Mar, 2020

The Financial Conduct Authority (FCA) has published a consultation paper (CP20/3) which proposes to enhance climate-related disclosures by companies with a UK premium listing and clarify existing disclosure obligations.

The consultation paper, which follows on from the FCA's related Discussion Paper and Feedback Statement issued last year, proposes to introduce a new continuing obligation in the Listing Rules (LR) referencing the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) on a 'comply or explain' basis. In particular, LR 9.8 (the new climate-related disclosure rule) would require premium-listed companies to include a statement in the annual report setting out:

  • whether they have made disclosures consistent with the TCFD's recommendations and recommended disclosures in their annual financial report;
  • an explanation of 'why' where they have:
    • not made disclosures consistent with some or all of the TCFD's recommendations and/or recommended disclosures; or
    • included some or all of the disclosures in a document other than their annual report; and 
  • where in their annual report (or other relevant document) the various disclosures can be found.

The FCA is also seeking feedback on guidance it proposes to issue, via a Technical Note, on existing obligations set out in EU legislation and in its Handbook, that may already require issuers to disclose information on climate-related (and other environmental, social and governance matters) in certain circumstances.  The guidance will be relevant for a wider scope of entities, incluing all companies with listed securities, not just those in the premium segment.  The proposed Technical Note is included in draft as an appendix to the Consultation Paper. 

The new rule is proposed to take effect for accounting periods beginning on or after 1 January 2021.  This will mean that the first reports issued in compliance with the new rule would be published in 2022. Responses to the Consultation Paper are requested by 5 June 2020. 

The press release and Consultation Paper are available on the FCA website. 

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