July

Podcast on the public sector and the coronacrisis (part 2)

21 Jul, 2020

Accountancy Europe has released a second podcast on the wider repercussions of COVID-19 for the public sector. The new podcasts discusses the long-term actions required to help overcome the effects of COVID-19.

The 15-minute podcast can be accessed through the press release on Accountancy Europe's website. It is the sixth in a series of podcasts focusing on different aspects of the crisis. The entire series is available on Accountancy Europe's podcast page.

In June 2020, Accountancy Europe released an analysis of short-term and long-term actions that could support the public sector in countering the pandemic's impact, among them many actions with regard to transparency and reporting.

Podcast on the public sector and the coronacrisis

06 Jul, 2020

Accountancy Europe has released a podcast exploring how the COVID-19 crisis differs from the 2008/09 financial crisis and the wider repercussions of the global lockdown across the economy for the public sector.

The 17-minute podcast can be accessed through the press release on Accountancy Europe's website. It is the fifth in a series of podcasts focusing on different aspects of the crisis. The entire series is available on Accountancy Europe's podcast page.

In June 2020, Accountancy Europe released an analysis of short-term and long-term actions that could support the public sector in countering the pandemic's impact, among them many actions with regard to transparency and reporting.

Position paper calling for a global standard-setter for non-financial reporting

07 Jul, 2020

The Eumedion Foundation based in the Netherlands has published a position paper 'Towards a global, investor focused standard setter for corporate non-financial reporting' calling on the IFRS Foundation to establish such a standard-setter.

Eumedion is a non-profit organisation that monitors listed companies in the Netherlands and in Europe on their ESG-performance and looks at risk management, remuneration, transparency and reporting. Eumedion operates as a representative of the interests of institutional investors in the field of corporate governance and sustainability.

The position paper published yesterday concludes the final views of Eumedion, following the publication of Eumedion’s Green paper in October 2019, the feedback received during the Eumedion Conference 2019, the formal and informal responses received and the insights shared during the round table that Eumedion organised together with Accountancy Europe on 9 March 2020.

Key messages of the position paper are:

  • Investors struggle to understand how a company creates long-term value and how a company lives up to the valid needs of society where non-financial performance matters.
  • There is a need for an International Non-financial reporting Standards Board (‘INSB’) to ensure that enforceable and consistent investor-relevant non-financial information is faithfully reported.
  • Eumedion calls on the IFRS Foundation to establish the INSB, as a second separate board next to the International Accounting Standards Board (IASB).
  • External auditors should provide at least limited assurance on the information reported; this would enhance the reliability of corporate non-financial reporting.

The position paper states that the EU needs to be credited for its important role in accelerating the adoption of IFRSs to the current near-global level and expresses the belief that the EU could play a similar role for international non-financial reporting standards. Eumedion also urges the EU to adhere to its leadership role in the field of non-financial reporting. However, the paper quotes ESMA Chair Steven Maijoor in warning that:

It would not only be short-sighted but also detrimental for investors – who typically operate in global financial markets – to build a set of corporate ESG disclosure standards that is only regional.

Please click to access the full position paper on the Eumedion website.

Pre-meeting summaries for the July 2020 IASB meeting

16 Jul, 2020

The IASB will meet via video conference on 22 and 23 July 2020 for its regular meeting. We have posted our pre-meeting summaries for the meetings that allow you to follow the IASB’s decision making more closely. For each topic to be discussed, we summarise the agenda papers made available by the IASB staff and point out the main issues to be discussed by the IASB and the staff recommendations.

Disclosure Initiative: Accounting Policies: In August 2019, the Board published the Exposure Draft (ED) Disclosure of Accounting Policies, which proposed amendments to IAS 1 and IFRS Practice Statement 2. At this meeting the staff recommend that the IASB amend the transition requirements to require entities to disclose material accounting policy information for the current period and disclose comparative accounting policy information if, applying IAS 1:38, it is relevant to understanding the current period’s financial statements. They also recommend that the amendments apply to annual reporting periods beginning on or after 1 January 2023 with early application permitted and that the effective date of the amendments to IAS 8 resulting from the Accounting Policies and Accounting Estimates project be changed to the same date.

Management Commentary: The Board will discuss potential guidance on reporting financial resources. The papers discuss requirements and possible supporting guidance on reporting progress in managing key matters, a disclosure objective for performance and position; and possible guidance supporting that objective, including on identifying key facets of performance and position that need to be addressed in management commentary. They also discuss measures and indicators.

Extractive activities: The staff papers summarise their assessment on how activities within the scope of IFRS 6 would be accounted for in the absence of that Standard, applying the requirements in IAS 16 and IAS 38.

The staff concluded that costs incurred during the exploration phases would not meet the requirements of IAS 16 or IAS 38 for recognition as an asset. The staff also assessed expenditure acquiring the legal rights from a third party and concluded that it could meet the definition of an intangible asset and the recognition criteria, but that application of IAS 36 without the specific requirements in IFRS 6:18-22 would generally lead to an immediate writeoff of exploration and evaluation assets. Applying the guidance in IAS 38:54-55, exploration and evaluation expenditure incurred subsequent to the acquisition of the legal right would be recognised as an expense as it is incurred.

Maintenance and Consistent Application - Lack of exchangeability: In April the IASB decided on how to amend IAS 21 to address the accounting when the spot exchange rate is not observable (because of a lack of exchangeability between two currencies). At this meeting the staff are recommending that the proposed changes be applied prospectively. They also recommend that the ED be open for comment for 120 days.

IBOR Reform and the Effects on Financial Reporting: The IASB will discuss feedback on the proposals for qualifying hedging relationships and groups of items. The staff recommend that the IASB permit, rather than require, entities to reset cumulative fair values to zero for the purpose of performing the retrospective effectiveness assessment as proposed in paragraph 102S of the ED and confirm the proposals in the ED related to the accounting for qualifying hedging relationships subject clarifications and drafting suggestions as explained in the staff analysis. That completes the deliberations and, if the IASB agrees, the staff expect to finalise the amendments.

IFRS Taxonomy: The staff will report on plans to update the IFRS Taxonomy for the COVID-19-Related amendments to IFRS 16. There is no paper for this session.

More information

Our pre-meeting summaries are available on our July meeting notes page and will be supplemented with our popular meeting notes after the meeting.

Recent sustainability and integrated reporting developments

23 Jul, 2020

A summary of recent developments at SASB/GRI, GRI, Carrots & Sticks, CAQ, IIF, the Good Governance Academy, IFAC/IIRC/AICPA/CIMA, IAASB, ASCG, and SSE.

In an important move, the Sustainability Accounting Standards Board (SASB) and the Global Reporting Initiative (GRI) have announced their future collaboration. Please click for the joint press release on the GRI website.

The GRI has also published an exposure draft that revises its Universal Standards, GRI 101, GRI 102, and GRI 103. Comments are requested by 9 September 2020. Please click for more information on the GRI website.

The GRI has also published a proposed sustainability reporting standard for oil and gas companies that identifies climate change as the single biggest challenge facing the sector. Comments are requested by 6 October 2020. Please click for more information on the GRI website.

New translations of the GRI Tax Standard have been made available in Arabic, Bahasa Indonesian, traditional and simplified Chinese, French, German, Italian, and Spanish. Please click for more information on the GRI website.

The GRI has also launched a new training portal. The GRI Academy is a global online platform that offers courses and tutorials on how organisations can communicate their impacts on the economy, environment and society through the GRI Standards. Please click for more information on the GRI website.

The fifth edition of Carrots & Sticks has been published providing an analysis of the latest trends in reporting provisions, covering 614 reporting requirements and resources cross over 80 countries, including the world’s 60 largest economies. The new report can be downloaded from the Carrots & Sticks website.

The Center for Audit Quality (CAQ) of the American Institute of Certified Public Accountants (AICPA) has released a new report The Role of Auditors in Company-Prepared ESG Information: Present and Future outlining how investors are using ESG information and the evolving, more prominent role of auditors in advancing the reliability, comparability, and relevance of this reporting. The report can be downloaded from the CAQ website.

The Institute of International Finance (IIF) has published Building a Global ESG Disclosure Framework: A Path Forward strongly encouraging the relevant international standard-setting bodies to take practical steps in the coming months towards a harmonised cross-sectoral ESG disclosure framework. The report can be downloaded from the IIF website.

The Good Governance Academy, an international collaboration of business schools, institutions and universities that shares information on critical governance and business science issues, has released a report Integrated thinking and doing an integrated report; the report brings together insights and findings from a Colloquium it held in May 2020. Please click to access the report on the IIRC website.

The International Federation of Accountants (IFAC), International Integrated Reporting Council (IIRC), the Association of International Certified Professional Accountants (AICPA), and the Chartered Institute of Management Accountants (CIMA) have released new guidance for CFOs and finance teams to navigate their organisations toward long-term value creation. Among the actionable insights is driving priorities for value creation into decision making and reporting. Please click to download the publication from the IFAC website.

Recently, the International Auditing and Assurance Standards Board (IAASB) offered two webinars providing guidance on extended external reporting assurance. Recordings of the webinars can be accessed on the IAASB website.

The Accounting Standards Committee of Germany (ASCG) has voiced strong criticism of the European Commission (EC) saying that trying to use sustainability aspects as an excuse for moving European corporate reporting away from IFRSs as issued by the IASB is inappropriate. The statement is part of a response on an EC consultation document that implies that IFRSs hinder sustainable investment. Please click to access the response on the ACSG website.

Recent news from the United Nation's Sustainable Stock Exchanges (SSE) initiative include:

Recording of European virtual academic research seminar on primary financial statements

17 Jul, 2020

On 10 July 2020, the International Accounting Standards Board (IASB) in conjunction with the European Accounting Association (EAA) held a virtual research seminar for academics. The seminar provided an overview of the IASB’s 'General Presentation and Disclosures' exposure draft (ED) and relevant academic literature.

The purpose of the session was to obtain feedback from academics on the proposals in the December 2019 ED and to discuss relevant academic evidence.

recording of the research seminar is now available on the IASB website.

Recording of the third webinar on PFS ED

14 Jul, 2020

On 9 July 2020, the IASB offered an English language webinar summarising the Board’s detailed proposals for disaggregation including general guidance, the analysis of operating expenses and unusual income and expenses.

A recording of this webinar is now available on YouTube.

Recordings of the second round of IASB webinars on the exposure draft on general presentation and disclosures

07 Jul, 2020

In June 2020, the IASB offered English, Chinese, Japanese, Portuguese, Korean, and Spanish language webinars summarising the IASB's proposals for subtotals and categories in the statement of profit and loss.

Recordings of these webinars are now available and can be accessed through the press release on the IASB website.

Recordings of the third round of IASB webinars on the exposure draft on general presentation and disclosures

21 Jul, 2020

In July 2020, the IASB offered English, Japanese, and Korean, and Spanish language webinars summarising the Board’s detailed proposals for disaggregation including general guidance, the analysis of operating expenses and unusual income and expenses.

In addition to the English language recording already pointed out, there are now also Japanese and Korean recordings. All of them can be accessed through the press release on the IASB website.

Report from the May 2020 Emerging Economies Group meeting

16 Jul, 2020

The 19th meeting of the IASB's Emerging Economies Group (EEG) was held via remote participation on 11–12 May 2020. The IASB has published a full report from the meeting.

Par­tic­i­pants at the meeting, which was chaired by IASB member Darrel Scott, discussed business combinations, IFRS 17, applying IFRS Standards in 2020 and the impact of COVID-19, comprehensive review of the IFRS for SMEs Standard, primary financial statements, management commentary, and an update on IASB projects.

Please click for access to the full report on the IASB website.

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