Amendments to IFRS 17 Insurance Contracts: The amendments to IFRS 17 are being finalised by the staff. During this process the staff identified five (sweep) issues for which the Board decided to make additional changes to the Standard, along with two other matters that were identified after the staff paper had been distributed.

Maintenance and consistent application — Sale and leaseback with variable payments: At its April 2020 meeting, the Board decided to amend IFRS 16 for sale and leaseback transactions when the lease has variable payments. At this meeting the Board decided that the proposed amendment be applied retrospectively in accordance with IAS 8, except when hindsight is required, and that early application be permitted.  

Disclosure initiative — Accounting policies: The Board supported the staff recommendations towards finalising the proposal to require entities to disclose ‘material’ accounting policies instead of ‘significant’ accounting policies. However, given the importance of the wording, the staff have been asked to bring revised drafting back for the Board to consider. The finalisation should not be delayed to align with any changes arising from the ED General Presentation and Disclosures. However, the staff will consider whether to align the effective date of this amendment with the amendments to IAS 8 under the Accounting policies and accounting estimates project.

Management commentary: The Board supported the staff recommendations for the disclosure objectives and the type of information that would support those objectives in relation to risk and the external evironment.

Research programme update: The staff updated the Board on the research programme, including recent changes to the timetable and priorities.

There was also an oral update of IBOR Reform and the Effects on Financial Reporting: Based on informal discussions, the overall feedback of the ED is supportive and positive. The comment letter analysis and potential changes will be discussed in the June 2020 meeting.

Please click to access the detailed notes taken by Deloitte observers for the entire meeting.

The event was organised into a general introductory section and the discussion of five key topics (each again introduced by IASB and EFRAG) that where then opened to questions from the audience. The agenda below indicates where during the two-and-a-half hour recording the individual topics were discussed:

• Opening and welcome
• General introduction to the IASB exposure draft General Presentation and Disclosures (begins at about 5:00 minutes)
  
• EFRAG’s view on the topic (begins at about 12:00 minutes)
• Key Topic 1 – Defined lines and subtotals in the income statement – improved comparability or imposed uniformity? (begins at about 21:00 minutes)
• Key Topic 2 – Looking at the new subtotals – what is the impact and will they work for all industries? (begins at about 1:20:00 hours)
• Key Topic 3 – Management performance measures – definition, disclosure and unusual items: Will management still be able to explain the overall performance / generation of income in the context of the activities and business strategy? (begins at about 1:42:00 hours)
• Key Topic 4 – Principles of aggregation and disaggregation – new proposals expected compared to how companies disaggregate information today (begins at about 2:19:00 hours)
• Key Topic 5 – Statement of cash flows – change to the starting point, new disaggregation due to new line items introduced and removal of classification choice for interest and dividends (begins at about 2:27:00 hours, introduction by IASB and EFRAG only, no discussion due to reasons of time)

The recording of the outreach event is available here. You can also access the slides for the event on the EFRAG website.

The 20-minute podcast can be accessed through the press release on Accountancy Europe's website. It is the third in a series of podcasts focusing on different aspects of the crisis. The entire series is available on Accountancy Europe's podcast page.

IASB Supplementary Meeting

The IASB is holding a supplementary meeting on 15 May 2020 to consider feedback on its proposal to amend IFRS 16 in response to COVID-19.  

The staff recommend that the Board finalise the proposed amendments, but allow the expedient to be applied to COVID-19-related rent concessions to payments originally due on or before 30 June 2021; require disclosure of the amount recognised in profit or loss to reflect changes in lease payments that arise from COVID-19-related rent concessions; and specify that in the reporting period in which a lessee first applies the amendment, it is not required to disclose the amount of the adjustment for each line item affected or its effect on earnings per share.

The staff recommend that the Board take no further action in response to requests to provide similar relief to lessors.  If the Board agrees with its recommendations, the staff expect issuing a final amendment on or around 28 May 2020.

IASB Meeting

The IASB is meeting on Wednesday 20 and Thursday 21 May 2020.

Amendments to IFRS 17 Insurance Contracts: The amendments to IFRS 17 are being finalised by the staff. During this process the staff identified five (sweep) issues for which the staff are recommending that that make additional changes to the Standard.

Maintenance and Consistent Application: Sale and leaseback with variable payments: At its April 2020 meeting, the Board decided to amend IFRS 16 for sale and leaseback transactions when the lease has variable payments. At this meeting the staff are recommending that the proposed amendment be applied retrospectively in accordance with IAS 8, except when hindsight is required, and that early application be permitted.

Disclosure Initiative—Accounting policies: The staff recommend that the Board finalise the proposal to require entities to disclose ‘material’ accounting policies instead of ‘significant’ accounting policies, with minor changes. The finalisation should not be delayed to align with any changes arising from the ED General Presentation and Disclosures. However, the staff will consider whether to align the effective date of this amendment with the amendments to IAS 8 under the Accounting Policies and Accounting Estimates project.

Management Commentary: The discussion will continue to focus on disclosure objectives and the type of information that would support those objectives. There are two areas this month: risk and the external evironment.

Research Programme update: The staff will update the Board on the research programme, including recent the changes to the timetable and priorities.

There will also be an oral update of IBOR Reform and the Effects on Financial Reporting.

More information

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

Topics to be discussed include:

• Presentation of Financial Statements in the Public Sector
• Differential Reporting
• Contextual Factors and Imprudent Discount Rate Assumptions
• Disclosure of Tax Expenditures

Registration is now open until 15 May. Participants can attend free of charge, however, registration is required.

Please click for more information on the IPSASB website.

The topics covered during the meeting were the following (numbers in brackets are ref­er­ences to the cor­re­spond­ing para­graphs of the summary):

• IBOR reform and its effects on financial reporting — Phase 2 (1–12): The ASAF were provided with an overview of the IASB’s proposed amendments for the forthcoming Exposure Draft Interest Rate Benchmark Reform — Phase 2 and gave their initial views to the expected proposals, which they were in broad agreement. In addition, the ASAF members provided feedback on what constitutes a ‘modification’ of financial assets and financial liabilities, disclosures, and other topics.
• Update on agenda planning (13–17): The ASAF was given an update on the IASB’s work plan and the change of timelines of various projects due to the coronavirus pandemic. The ASAF expects its next meeting to be held in July 2020 and will likely be virtual.
• Goodwill and Impairment (18–25): The ASAF were provided with an overview of the IASB’s preliminary views on Discussion Paper Business Combinations — Disclosures, Goodwill and Impairment and provided recommendations on how to conduct outreach and fieldwork activities.
• Better Communication — Primary Financial Statements (26–46): The ASAF discussed topics related to the proposals in Exposure Draft General Presentation and Disclosures. Topics discussed include subtotals and categories in the statement of profit or loss, disaggregation, management performance measures, and statement of cash flows.

A full summary of the meeting is available on the IASB's website.

The topics discussed at the meeting included:

• Primary financial statements.
• Financial instruments with characteristics of equity.
• IBOR reform and its effects on financial reporting.
• Management commentary.

For more in­for­ma­tion, see the meeting page and the meeting summary on the IASB's website.

Below is an analysis of all changes made to the work plan since our last analysis on 24 April 2020.

Standard-setting projects

• no changes
  

Maintenance projects

• Annual improvements — 2018-2020 cycle — removed from the work plan as the IASB completed this cycle of annual improvements by issuing Annual Improvements to IFRS Standards 2018–2020 on 14 May 2020; projects that were part of this cycle included:
  
  • Fees in the ‘10 per cent’ Test for Derecognition of Financial Liabilities (Amendments to IFRS 9)
  • Lease Incentives (Amendment to Illustrative Example 13 accompanying IFRS 16)
  • Subsidiary as a First-time Adopter (Amendment to IFRS 1)
  • Taxation in Fair Value Measurements (Amendment to IAS 41)
• Classification of liabilities — Effective date — an exposure draft ED/2020/3 Classification of Liabilities as Current or Non-current — Deferral of Effective Date (Proposed amendment to IAS 1) was published on 4 May 2020 with comments requested by 3 June 2020; the feedback on the exposure draft will be discussed in June 2020
• IFRS 16 and COVID-19 — the IASB discussed the feedback on the exposure draft published on 24 April 2020 at its supplementary meeting on 15 May 2020 and expects to issue final amendments "on or around 28 May 2020"
• IAS 37 — Onerous contracts — removed from the work plan as the IASB issued Onerous Contracts — Cost of Fulfilling a Contract (Amendments to IAS 37) on 14 May 2020
• IAS 16 — Proceeds before intended use — removed from the work plan as the IASB issued Property, Plant and Equipment — Proceeds before Intended Use (Amendments to IAS 16) on 14 May 2020
• IFRS 3 — Updating a reference to the Conceptual Framework — removed from the work plan as the IASB issued Reference to the Conceptual Framework (Amendments to IFRS 3) on 14 May 2020

Research projects

• Dynamic risk management — core model outreach has been clarified to take place in fourth quarter of 2020 (previously second half of 2020)

Other projects

• IFRS Taxonomy update — Amendments to IFRS 17 and IAS 16 — a project newly added to the work plan; a proposed taxonomy update is expected in July 2020
• IFRS Taxonomy update — Covid-19-related rent concessions (Amendment to IFRS 16) — a project newly added to the work plan; a proposed taxonomy update is expected in May 2020

The above is a faithful comparison of the IASB work plan at 24 April 2020 and at 25 May 2020. For access to the current IASB work plan at any time, please click here.

Please click to access the updated alignment dashboard prepared for the June 2020 IPSASB meeting on the IPSASB website.

In this context, please also so our 2020 edition of IPSAS in your pocket published in January.

The ED contains proposed amendments that would address issues that might affect financial reporting after the reform of an interest rate benchmark, including its replacement with alternative benchmark rates.

We are largely supportive of the amendments. In particular, we support the key changes that ensure that entities that apply hedge accounting will continue to do so as they transition to new benchmark interest rates and that the accounting for the modification of hedged items, when those modifications arise directly from the reforms, are reflected on a prospective basis via the application of IFRS 9:B5.4.5. We consider these as being the two most important elements of the proposals.

Please click to download our full comment letter.

More in­for­ma­tion about the issues is set out below:

Click to access all our comment letters to the IASB, IFRS Foun­da­tion, and IFRS In­ter­pre­ta­tions Committee.