The new members were appointed for a three-year term beginning 1 July 2020. SMEIG members can serve up to three terms.

Please click for the IASB press release announcing the reappointments.

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.

The FRC reviewed the seven largest UK audit firms' going concern policies and procedures in accordance with IAS (UK) 570.

The key findings of the review are:

• All firms enhanced their audit policies and procedures relating to going concern from the end of March 2020 for increased risk of material uncertainties of going concern due to COVID-19.
• Firms have focused on improving the consistency of execution in the audit of going concern through providing additional central support and oversight.
• The additional policies and procures implemented by the firms have been consistent with the requirements of ISA (UK) 570 and the additional guidance issued in March 2020 by the FRC. 
• Additional policies and procedures have been similar across the firms.

The FRC's review followed guidance issued in March 2020 and a recent FRC Lab Report on going concern, risk and uncertainty.

In the next stage of the review, the FRC will review a sample of completed audits to assess how the revised going concern policies and procedures are being applied in practice and will report on this later this year.

Please click for the press release and review letter on the FRC website.

thhtThe update reports on the EFRAG Board webcast meeting on 16 June, the EFRAG TEG webcast meetings on 3 and 4 June and the meeting of the European Lab Steering Group on 24 June.

The update also lists EFRAG publications issued in June:

• EFRAG's final endorsement advice on COVID -19: Related rent concessions (amendment to IFRS 16);
• EFRAG's draft endorsement advice on annual improvements to IFRS Standards 2018-2020;
• EFRAG's draft endorsement advice on Property, Plant and Equipment proceeds before intended use (amendments to IAS 16);
• EFRAG's draft endorsement advice on the temporary exemption from applying IFRS 9 (amendments to IFRS 4);
• EFRAG's draft endorsement advice on the Onerous contracts - cost of fulfilling a contract (amendments to IAS 37);
• EFRAG's draft endorsement advice on the reference to the conceptual framework (amendments to IFRS 3); and
• EFRAG's final comment letter on IASB's ED classification of liabilities as current or non- current - deferral of effective date.

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

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.

Ms Tarca began her speech by talking about what XBRL is and who uses it. She explained about tagging financial statements, the different versions of XBRL, and gave examples of different uses in the US, in the EU, in the UK, in Japan, in Denmark and in Australia.

This led her to four questions:

• Why have we been slow to embrace digital financial reporting, when the benefits of technological innovation have been profound in other areas of accounting and finance?
• What does research tell us about the US experience from a company preparer/auditor perspective?
• Do investors want digital reporting?
• Are there benefits for capital markets?

On the first question, Ms Tarca explained tat when lodging annual reports in XBRL format is not mandatory, listed companies need a compelling case to take on an activity that consumes resources as tagging financial statements will involve software, systems, expertise, staff and consultants.

On the second question, Ms Tarca mentioned experiences at the SEC pointing to some significant problems relating to the accuracy of tagging and excessive or erroneous use of extensions. However, later errors became less prevalent and some ‘learning’ took place.

Turning to the third question, Ms Tarca pointed at the fact that there seems to be low demand from investors for regulators to make tagged data mandatory as the financial data investors use is already digital in many cases as they get it from database providers. Tagging of data would, therefore, likely help the database providers, who could then focus more on ‘standardising’ and ‘normalising’ data and providing their various other value-adding activities for their clients.

Finally, in discussing the fourth question, Ms Tarca noted research that concluded that XBRL has the potential to decrease information risk and information asymmetry through greater transparency and leads to reduced information processing costs. However, she warned that because of limited use of XBRL data by financial statement users research in this area is still in its early stages.

Ms Tarca concluded her speech mentioning some opportunities for further research around comparability, quality, financial statement presentation, and disclosures.

Please click to access the transcript of her speech on the IASB website.

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

In keeping with the deferral of the effective date of IFRS 17 by two years to annual periods beginning on or after 1 January 2023, the amendments change the fixed expiry date for the temporary exemption in IFRS 4 Insurance Contracts from applying IFRS 9 Financial Instruments, so that entities would be required to apply IFRS 9 for annual periods beginning on or after 1 January 2023.

Final endorsement of the amendments is currently expected in the fourth quarter of 2020 - in time for European companies to benefit from the deferral.

Please click to access the final endorsement advice letter and a corresponding press release on the EFRAG website. EFRAG has also updated its IFRS endorsement status report to reflect the development.

The Amendments change the effective date of the temporary exemption from IFRS 9 from 1 January 2021 to 1 January 2023.

EFRAG recommends the endorsement of the Amendments. EFRAG’s initial assessment is that the Amendments meet the technical requirements of the Regulation (EC) No 1606/2002 of the European Parliament and of the Council on the application of international accounting standards.

Comments are required by 03 July 2020

For more information, see the press release, draft endorsement advice letter and the invitation to comment on the EFRAG’s website. EFRAG has also updated its endorsement status report which is available here.

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.