October

EFRAG publishes October 2020 issue of 'EFRAG Update'

03 Nov, 2020

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

The update reports on the EFRAG Board webcast meeting on 8 and 30 October 2020, the EFRAG webcast on 15 October 2020 and the EFRAG TEG webcast meeting on 21-22 October.  The publication also covers the activities of the European Reporting Lab.

The update also lists EFRAG publications issued in October including:

The October EFRAG Update can be found on the EFRAG website here.

EFRAG publishes September 2020 issue of 'EFRAG Update'

12 Oct, 2020

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

The update reports on the EFRAG Board webcast meetings on 10 and 14 September, the EFRAG TEG webcast meeting on 2-3 and 14 September and the EFRAG TEG, the EFRAG CFSS webcast meeting on 23 September and the European Lab Steering Group webcast on 15 September. The publication also covers the activities of the European Reporting Lab.

The update also lists EFRAG publications issued in September including:

Please click to download the August EFRAG Update from the EFRAG website.Please click to download the September EFRAG Update from the EFRAG website. 

EFRAG updates Board composition

15 Oct, 2020

The EFRAG General Assembly has announced that Ricardo Sanchez and Sven Morich have been appointed to the Board. They have filled the vacancies that occurred when Karin Dohm and Andreas Barckow have stepped down. In addition, Hans Buysse has been appointed as EFRAG Board Vice-President.

Further, the EFRAG General Assembly extended the mandate of all EFRAG Board members that was to expire on 31 October 2020 (date incorrect in press release) by six months to 30 April 2021, to allow the EFRAG Board in its current composition to finalise the endorsement advice on IFRS 17 Insurance Contracts.

For more information, see the press release on the EFRAG’s website.

EFRAG, FSR – Danish Auditors, the Confederation of Danish Industry, and the IASB joint outreach event on business combinations and subsequent accounting for goodwill

09 Oct, 2020

The EFRAG, along with the FSR – Danish Auditors, the Confederation of Danish Industry (DI) and the IASB, will be hosting an outreach event on 23 October 2020 to discuss how to the proposed disclosure requirements to make the performance of an acquisition more transparent and on the proposal to keep the current approach rather than reintroducing the amortisation.

The event will have a wide range of high-level speakers and will be seeking input from the community of in­ter­ested stake­hold­ers on the IASB’s pre­lim­i­nary views included in the Dis­cus­sion Paper Business Com­bi­na­tions —  Dis­clo­sures, Goodwill and Im­pair­ment and the EFRAG’s Draft Comment Letter.

Please click for more in­for­ma­tion and reg­is­tra­tion for the event on the EFRAG website.

ESMA announces enforcement priorities for 2020 financial statements

28 Oct, 2020

The European Securities and Markets Authority (ESMA) has announced the priority issues that the assessment of listed companies' 2020 financial statements will focus on. A special focus is on COVID-related matters.

The common enforcement priorities related to 2020 IFRS financial statements include:

  • the application of IAS 1 Presentation of Financial Statements with a focus on going concern, significant judgements and estimation uncertainty and the presentation of COVID-related items in the financial statements;
  • the application of IAS 36 Impairment of Assets, where the recoverable amount of goodwill, intangible assets and tangible assets may be impacted by the deterioration of the economic outlook of various sectors;
  • the application of IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures, including general considerations relating to risks arising from financial instruments, focusing on liquidity risk, and specific considerations related to the application of IFRS 9 for credit institutions when measuring expected credit losses; and
  • specific issues related to the application of IFRS 16 Leases, including explicit disclosures by lessees which have applied the IASB’s amendment providing relief to lessees when accounting for rent concessions.

ESMA also highlights key non-financial information issues and alternative performance measures with regard to the impact of COVID-19, social and employee matters, business model and value creation, and risks relating to climate change.

ESMA also highlights the importance of disclosures analysing the possible impacts of the decision of the United Kingdom to leave the European Union.

ESMA and European national enforcers will monitor and supervise the application of the IFRS requirements outlined in the priorities, with national authorities incorporating them into their reviews and taking corrective actions where appropriate. ESMA will collect data on how European listed entities have applied the priorities and will publish its findings in a separate report.

Please click for the following documents on the ESMA website:

European Union formally adopts IFRS 16 amendments regarding COVID-19-related rent concessions

12 Oct, 2020

The European Union has published a Commission Regulation endorsing 'Covid-19-Related Rent Concessions (Amendment to IFRS 16)'.

The amendments provide lessees with an exemption from assessing whether a COVID-19-related rent concession is a lease modification.

The European Union effective date is the same as the IASB effective date (1 June 2020).

The Commission Regulation amending Regulation (EC) No 1126/2008 adopting certain international accounting standards in accordance with Regulation (EC) No 1606/2002 of the European Parliament and of the Council was published in the Official Journal of the European Union on 9 October 2020.

EFRAG has updated its endorsement status report to reflect that the European Union has adopted the amendments.

Finance for the Future virtual events to be held in December

30 Oct, 2020

The Finance for the Future Awards, founded by ICAEW and The Prince’s Accounting for Sustainability Project (A4S), and delivered together with Deloitte, were first held in 2012 to highlight the essential role that finance plays in integrated thinking and building sustainable business models. This year, the Finance for the Future community will be brought together through a series of three virtual events in December as part of the Accounting for Sustainability Summit 2020.

The virtual events will allow participants to learn and interact with experts and previous winners from around the world, who will be sharing their experience and insights. The virtual events will also be an opportunity for participants to understand how finance can play a crucial role in shaping a sustainable and resilient recovery.

The three events are:

  • Driving change in the finance community - how education can reshape the future of finance – 13:00-14:30 GMT, 7 December 2020.
  • Authentic integrated thinking - connecting purpose, people, planet and profit within everyday decision making – 13:00-14:30 GMT, 8 December 2020.
  • Moving financial markets - how can we accelerate financial markets to drive a green and fair recovery? – 12:30-13:30 GMT, 9 December 2020.

The Finance for the Future Awards programme will be back in 2021 and aligned with the rescheduled COP26.

Further information and details of how to register is available on the ICAEW website.

Financial Reporting Lab publishes third newsletter of 2020

02 Nov, 2020

The Financial Reporting Lab ("the Lab") has published its third newsletter of 2020.

The newsletter provides an update of the Lab's current projects and a brief overview of its other activities.  Some highlights include:

The full newsletter is available on the FRC website here.

FRC amends FRS 100, FRS 101, FRS 102, FRS 104 and FRS 105

20 Oct, 2020

The Financial Reporting Council (FRC) has issued ‘Amendment to FRS 101 – Effective date of IFRS 17’, ‘Amendments to FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland and FRS 105 The Financial Reporting Standard applicable to the Micro-entities Regime - COVID-19-related rent concessions' and ‘Amendments to FRS 104 Interim Financial Reporting - Going concern'.

The amendment to FRS 101 changes the effective date of an amendment to the definition of a qualifying entity made in July 2019, effectively allowing relevant insurers to continue to apply FRS 101 for a further two years. The revised effective date for the new definition of a qualifying entity is accounting periods beginning on or after 1 January 2023. Consequential amendments have also been made to FRS 100 and FRS 102.

The amendments to FRS 102 and FRS 105, which were consulted on in Financial Reporting Exposure Draft (FRED) 76, introduce explicit requirements for accounting for temporary rent concessions for operating leases occurring as a direct consequence of COVID-19. Amendments have been made to Section 20 Leases of FRS 102 which require entities to recognise changes in operating lease payments that arise from COVID-19-related rent concessions on a systematic basis over the periods that the change in lease payments is intended to compensate. The FRC considers that this would best reflect the economic substance of the benefit of these concessions and their temporary nature and improve the consistency of reporting for users of financial statements. The requirements only apply to temporary rent concessions occurring as a direct consequence of the COVID-19 pandemic, when any reduction in lease payments affects only payments originally due on or before 30 June 2021. A similar amendment has been made to FRS 105. The effective date for these amendments is accounting periods beginning on or after 1 January 2020, with early application permitted.

The amendments to FRS 104, which were consulted in in FRED 75, clarify the requirement to assess the going concern basis of accounting and require the disclosure of any related material uncertainties when preparing interim financial statements in accordance with FRS 104. These amendments address an unintentional difference between FRS 104 and related IFRS requirements. IFRS Standards require management to assess an entity’s ability to continue as a going concern and disclose any related material uncertainties when preparing interim financial statements. Although these requirements are not contained within IAS 34 Interim Financial Reporting they apply to condensed interim financial statements prepared in accordance with IAS 34. FRS 104, which is based on the requirements of IAS 34, did not previously contain any explicit requirements covering the assessment and reporting on the going concern basis of accounting. However FRS 104 currently requires an entity to include a statement that the same accounting policies are applied in the interim financial statements as compared with the most recent annual financial statements, which would include a statement about the going concern basis of accounting. The amendments to FRS 104 introduce requirements covering going concern in a similar way to EU-adopted IFRS Standards. They are intended to ensure consistency in this regard going forward. The amendments are effective for interim periods beginning on or after 1 January 2021, with earlier application permitted.

A press release with links to all of the amendments is available on the FRC website.

FRC guidance on reporting in times of uncertainty

15 Oct, 2020

The Financial Reporting Lab of the Financial Reporting Council (FRC) has released guidance covering some critical areas of focus for 2020 year-ends.

In view of COVID-19, many companies are facing a challenging year-end. While the uncertainty creates risks for annual reporting it also presents opportunities. The two new guides look at key elements in respect of resources, action, and the future and in respect of going concern, risk, and viability. Both guides:

  • summarise key messages from earlier reports;
  • provide an update on recent developments in corporate reporting;
  • offer some thoughts regarding how corporate reporting can develop; and
  • contain practical examples from reports and presentations released by companies.

Please click to access COVID-19: Resources, action, the future - a look forward and COVID 19: Going concern, risk, and viability - a look forward on the FRC website.

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.