July

Report on the May 2020 IFRS Advisory Council meeting

01 Jul, 2020

A summary report has been released of the meeting of the IFRS Advisory Council held by remote participation on 27-28 May 2020.

The participants discussed:

  • Digital experience for customers and stakeholders — Council members received a presentation on the Foundation’s digital experience. The proposed digital framework was well received by the members.
  • Key performance indicators (KPIs) on Board technical activities — Council members reviewed the areas of the Board’s technical work that will benefit from the use of KPIs; the types of KPIs to be used; the manner in which KPIs support the Foundation’s key objectives as well as KPIs’ limitations; and the use and interpretation of KPI data.
  • Monitoring adoption — Council members received presentations BCBS, IOSCO, and the IMF. Each organisation shared some of the pertinent lessons learnt from their experience in monitoring and assessing standards.
  • Update on Board activities and Update on the Board’s activities — Council members received updates on recent trustee activities and on recent activities of the Board and the IFRS Foundation.

The full meeting summary is available on the IASB's website. There are also recordings of the individual sessions.

Summary of responses to the EC consultation on the revision of the NFRD

29 Jul, 2020

In February 2020, the European Commission (EC) launched a public consultation on a revision of the EU Non-Financial Reporting Directive (NFRD). A summary of responses is now available on the EC website. However, the summary ignores the many calls the consultation elicited for global standard-setting as opposed to regional standard-setting in non-financial reporting.

Among the proposals included in the consultation document was the suggestion that an EU standard-setter could be installed that would set European non-financial reporting standards. Only recently, the Commission tasked the European Financial Reporting Advisory Group (EFRAG) to undertake preparatory work for possible European standards on non-financial reporting.

While respondents to the consultation agreed that standardisation in the area would be beneficial, the idea of a Europe only solution met resistance. These comments are not reflected in the summary on the EC website. The only paragraph acknowledging that non-financial reporting is not solely a European issue notes that "the EU should cooperate with other major jurisdictions and non-EU investors to make sure that the EU standard is widely recognised".

Beyond the EC consultation, there have been repeated calls for international standard-setting in this area. More often that not, the IFRS Foundation is believed to be the right place to establish such a standard-setter (a parallel Board to the IASB). Most recently, the Eumedion Foundation published a position paper Towards a global, investor focused standard setter for corporate non-financial reporting.

Summary of the June 2020 ITCG meeting

21 Jul, 2020

The IASB has published a summary of the IFRS Taxonomy Consultative Group (ITCG) meeting held on 2 June 2020.

The ITCG discussed the following:

  • Review of common reporting practice related to primary financial statements.
  • Review of common reporting practice related to IAS 19, Employee Benefits.
  • Forthcoming IFRS Taxonomy consultation documents.

For more in­for­ma­tion, see the summary on the IASB’s website.

The Climate Financial Risk Forum publishes its guide to help the financial industry address climate-related financial risks

08 Jul, 2020

The Climate Financial Risk Forum (CFRF, jointly established in March 2019 by the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA)) has published an industry guide addressing climate-related financial risks.

The objective of the guide is to help financial services firms, of all sizes, understand the risks that arise from climate change, and to provide support on how to integrate these risks into their strategy and decision-making processes.

Its four chapters provide recommendations on: disclosure of climate-related financial risks; effective risk management; scenario analysis; and opportunities for innovation in the interest of consumers. The guidance gives explanations, explains current and future requirements of governments and stakeholder groups, details barriers to change, and provides recommendations and best practices for implementation.

The press release and guide are available on the FCA website.

Until the end of 2020, all IFRS Foundation meetings to be held remotely

28 Jul, 2020

Since early March, all meetings of the IFRS Foundation, including the IASB, advisory and consultative groups were held remotely, with observers and participants alike videoconferencing in. The Foundation has now decided to continue with this process and all meetings will be held remotely until the end of 2020.

Please see the press release on the IASB website for more information.

Updated IASB work plan — Analysis (July 2020 meeting)

25 Jul, 2020

Following the IASB's July 2020 meeting, we have analysed the IASB work plan to see what changes have resulted from the meeting and other developments since the work plan was last revised in June 2020. Changes are numerous.

Below is an analysis of all changes made to the work plan since our last analysis on 26 June 2020.

Stan­dard-set­ting projects

  • Management Commentary — the issuance of an exposure draft is now expected in the first half of 2021 (previously H2 2020).
  • Primary Financial Statements — a review of the feedback on its exposure draft is now expected in the fourth quarter of 2020 (previously H2 2020).
  • Rate-regulated Activities — the issuance of an exposure draft is now expected in the second half of 2021 (previously H2 2020).

Main­te­nance projects

  • Classification of Liabilities as Current or Non-current (Amendments to IAS 1) — this project has been removed from the work plan since the IASB published the final update on 15 July 2020
  • Deferred Tax Related to Assets and Liabilities Arising From a Single Transaction (Amendments to IAS 12) — a decision on the project directions is expected in the fourth quarter of 2020 (previously no date given).
  • IBOR Reform and its Effects on Financial Reporting — Phase 2 — IFRS amendments are expected in August 2020.
  • Lease Liability in a Sale and Leaseback — The issuance of an exposure draft is now expected in September 2020 (previously Q3 2020).
  • Supply Chain Financing Arrangements — Reverse Factoring — this project from the area of the IFRS IC's work has been removed from the work plan again after it had been added to the work plan in June 2020.

Research projects

  • Business Combinations under Common Control — a discussion paper is now expected in September 2020 (previously third quarter of 2020).
  • Extractive Activities — a decision on this project’s direction is now expected in the first half of 2021 (previously review of research in June 2020).
  • Financial Instruments with Characteristics of Equity — a decision on this project’s direction is now expected in the fourth quarter of 2020 (previously H2 2020).
  • Pension Benefits That Depend on Asset Returns — A review of the research is now expected in the fourth quarter of 2020 (previously H2 2020).
  • Post-implementation Review of IFRS 10, IFRS 11 and IFRS 12 — The request for information is now expected in October 2020 (previously Q4 2020).

Other projects

  • Due Process Handbook Review — the revised Due Process Handbook is now expected in July 2020 (previously June 2020).
  • IFRS Taxonomy Update — 2020 General Improvements and Common Practice — This project has been added to the work plan and a proposed IFRS Taxonomy Update is expected in the fourth quarter of 2020.
  • IFRS Taxonomy Update — Amendments to IFRS 17, IFRS 4 and IAS 16 — This project now correctly includes IFRS 4 and discussion of the feedback on the proposed IFRS Taxonomy Update is expected in the fourth quarter of 2020 (previously proposed update expected in July 2020).
  • IFRS Taxonomy Update — COVID-19 Related Rent Concessions (Amendments to IFRS 16) — A final Taxonomy Update is expected in August 2020 (previously feedback to be discussed in July 2020).
  • IFRS Taxonomy Update — Interest Rate Benchmark Reform — Phase 2 — The timing of a proposed IFRS Taxonomy Update is now expected in September 2020 (previouslyQ3 2020).

The above is a faithful com­par­i­son of the IASB work plan at 26 June 2020 and at 24 July 2020. For access to the current IASB work plan at any time, please click here.

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