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EFRAG publishes a feedback statement on the IASB Exposure Draft ED/2019/6 Disclosure of Accounting Policies

24 Jan 2020

The European Financial Reporting Advisory Group (EFRAG) has published its feedback statement on the International Accounting Standards Board (IASB's) Exposure Draft ED/2019/6 Disclosure of Accounting Policies.

EFRAG published its final comment letter on 12 December 2019.

This feedback statement summarises the comments received by EFRAG on its draft comment letter and explains how those comments were considered by EFRAG during its technical discussions leading to the publication of EFRAG's final comment letter.

A press release and the feedback statement are available on the EFRAG website.

Pre-meeting summaries for the January IASB meeting

24 Jan 2020

The IASB will meet in London on 28–30 January 2020 to discuss twelve topics. We have posted our pre-meeting summaries for the meeting 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.

Provisions (Thu 0945-1030): The staff recommend that the Board add a project to amend IAS 37 to align the IAS 37 liability definition and requirements for identifying liabilities with the Conceptual Framework (including potentially withdrawing IFRIC 21); clarifying which costs to include in the measure of a provision; and specifying whether the rate at which an entity discounts a provision for the time value of money should reflect the entity’s own credit risk.

Amendments to IFRS 17 Insurance Contracts (Thu 1320-1535): The Board will discuss some of the topics where it had decided to consider the feedback from respondents further, specifically:

  • the scope exclusion from IFRS 17 for some credit card contracts (recommend confirm the proposed scope exclusion with some changes);
  • Transition—the prohibition from applying the risk mitigation option retrospectively (recommend to retain, unchanged);
  • Business combinations—contracts acquired in their settlement period (recommendation to retain, unchanged);
  • Interim Financial Statements (recommend changing the requirements); and
  • Asset for insurance acquisition cash flows—transition and business combinations (recommend changing the requirements).

IBOR Reform and the Effects on Financial Reporting (Thu 1050-1220): The Board will consider recommendation from the staff in relation to the end of application of the Phase 1 exceptions from specific hedge accounting requirements in IFRS 9 and IAS 39 in the context of interest rate benchmark reform (IBOR reform); the potential effects of IBOR reform on IFRS Standards other than those related to financial instruments accounting; and potential disclosure requirements to accompany the tentative decisions the Board has made during Phase 2 of the IBOR project.

Pension Benefits that Depend on Asset Returns (Wed 1530-1600): The staff are recommending that the Board consider amending IAS 19 to cap the projected cash flows when benefits vary with the level of returns on specified assets, so that they do not exceed the discount rate specified by IAS 19. The change would be to address the inconsistency in IAS 19 that the variability (risk) in the future asset returns is reflected only in the cash flows and not in the discount rate applied to those cash flows. The staff are asking Board members for comments.

Disclosure Initiative (Wed 1630-1800): The Board will continue its discussions of potential revisions to the disclosure requirements in IAS 19 and recommend that the Board refine some of its tentative decisions relating to defined benefit plans, multi-employer plans and group plans. 

IFRS 3 reference to the Conceptual Framework (Thu 0930-0945): The staff recommend that the effective date of the updated references to the Conceptual Framework in IFRS 3 be 1 January 2022. The new references would apply to business combinations that occur in any annual reporting period starting after that date, with earlier application permitted.

Subsidiaries that are SMEs (Tue 1100-1230): The staff recommend that the Board develop an ED as soon as possible proposing reduced disclosure requirements for subsidiaries that are SMEs.

Business Combinations under Common Control (Wed 1400-1530): The Board has decided that the acquisition method, as set out in IFRS 3, should be required for listed acquirers that have NCI. They have received feedback from some sectors that a predecessor should apply to all common-control business combinations. The staff recommend no change to the decisions already made.  The staff also set out their recommendations for recognition and measurement applying a predecessor approach.

The staff will give updates on:

  • the feedback received on the proposed update to the IFRS Taxonomy to reflect the amendments made to IFRS Standards in 2019 in response to IBOR reforms (Thu 1535-1605);
  • the ED for rate-regulated activities (Thu 1045-1050);
  • work being undertaken on research projects and the research pipeline (Thu 1030-1045); and
  • recent activities of the IFRS Interpretations Committee (Wed 1600-1615).

More information

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

IBC discusses Big4 report on reporting sustainability information at WEF

24 Jan 2020

At the World Economic Forum (WEF), the chief executive officers of many of the world’s largest companies expressed support for aligning on a core set of metrics and disclosures in their annual reports on the non-financial aspects of business performance such as greenhouse gas emissions and strategies, diversity, employee health and well-being and other factors.

The International Business Council (IBC) of the WEF discussed a proposal prepared by the Forum in collaboration with the Big Four accounting firms – Deloitte, EY, KPMG and PwC – titled Toward Common Metrics and Consistent Reporting of Sustainable Value Creation. The proposal recommends a set of core metrics and recommended disclosures. The intent is for the metrics to be reflected in the mainstream annual reports of companies on a consistent basis across industry sectors and countries.

The proposed metrics and recommended disclosures have been organized into four pillars that are aligned with the UN Sustainable Development Goals (SDGs) and principal Environmental, Social, and Governance (ESG) domains. They are:

Principles of Governance Planet People Prosperity
aligned with SDGs 12, 16 and 17 aligned with SDGs 6, 7, 12, 13, 14 and 15 aligned with SDGs 1,3, 4, 5 and 10 aligned with SDGs 1, 8, 9 and 10
focuses on a company’s commitment to ethics and societal benefit looks at the themes of climate sustainability and environmental responsibility examines the roles human and social capital play in business focuses on business contributions to equitable, innovative growth

The metrics are drawn, wherever possible, from existing standards and disclosures such as GRI, SASB, TCFD, CDSB and others. Instead of reinventing the wheel by creating a new standard, they aim to amplify and elevate the rigorous work that has already been done by these initiatives, bringing their most material aspects into mainstream reports on a consistent basis.

Adoption of such recommended universal metrics and disclosures by IBC companies is intended to be a catalyst for greater alignment and synergy among existing ESG standards and ultimately a system-wide solution, such as a generally accepted international accounting or other reporting standard drawn from best practice.

Please click to download Toward Common Metrics and Consistent Reporting of Sustainable Value Creation from the WEF website.

New report from the International Integrated Reporting Council (IIRC): ‘Integrated Thinking & Strategy: State of play report’

23 Jan 2020

The International Integrated Reporting Council’s (IIRC's) Integrated Thinking & Strategy Group has published a new report setting out how best to adopt integrated thinking and enhance strategy to achieve long-term value creation.

The group is made up of over 50 organisations globally that have convened to develop a model and share expert insights.

The model that they have developed is defined as follows: ‘Integrated thinking is a multi-capital management approach that enables organizations to deliver their purpose to the benefit of their key stakeholders overtime. It is about creating and preserving value and enabling better decision-making based on interconnected, multi-capital information.’

The group’s underlying thinking comes from the fundamental concepts and other aspects of the International <IR> Framework and therefore aims to make an explicit link between reporting and enhanced decision-making within the organisation. The report therefore considers, for example:

  • How taking a broader and more integrated view of the resources (‘capitals’) that organisations rely on to create value can be used in decision-making.
  • Better understanding of factors in value creation and how these are realised over time – especially in the longer term.
  • Better alignment of the company with its role in relation to society and the environment (which the report calls ‘system value’).
  • An enhanced ability to understand and make decisions on optimising value creation, taking into account longer-term performance, the needs of stakeholders, and the impacts on the capitals that are used in the value creation process.

In his foreword to the report, IIRC Chair Emeritus Professor Judge Mervyn King writes:

A collaborative management culture, a multicapital mindset and outcome-based corporate governance – these are the building blocks of integrated thinking, the output of which is an integrated report. Above all, integrated thinking is a unifying concept and a strategic tool that helps management to bring order to the manifestly complex environment in which businesses must operate in the 21st century.

The report’s authors invite feedback on the initial ideas set out in the report and promise a further paper at the end of 2020.  Our report A Directors Guide to Integrated Reporting is available here.

2020 required and annotated required IFRS Standards now available

23 Jan 2020

The IFRS Foundation announces that the annual publication formerly known as the 'Blue Book' is now available.

The Required IFRS Standards 2020 publication contains all official pronouncements that are mandatory on 1 January 2020. It does not include IFRSs with an effective date after 1 January 2020. The Annotated Required IFRS Standards 2020 includes the same content as Required IFRS Standards 2020, but with additional annotations containing extensive cross-references, explanatory notes and IFRS Interpretations Committee agenda decisions.

The books are available in electronic format for subscribers to eIFRS Professional. Printed copies of the books are available for sale through the IASB's web shop.

IASB finalises amendments to IAS 1 to clarify the classification of liabilities

23 Jan 2020

The International Accounting Standards Board (IASB) has issued 'Classification of Liabilities as Current or Non-Current (Amendments to IAS 1)' providing a more general approach to the classification of liabilities under IAS 1 based on the contractual arrangements in place at the reporting date.



The issue was originally addressed as part of the annual improvements project 2010 -2012 cycle. Exposure Draft ED/2012/1 Annual Improvements to IFRSs (2010—2012 Cycle), published in May 2012, proposed amendments to IAS 1.73 to clarify that a liability is classified as non-current if an entity expects, and has the discretion, to refinance or roll over an obligation for at least twelve months after the reporting period under an existing loan facility with the same lender, on the same or similar terms. During 2013, however, the IASB decided not to finalise the amendment, but instead pursue a narrow-scope project to refine the existing guidance in IAS 1 on when liabilities should be classified as current.

In February 2015, the Board published its proposals in the Exposure Draft  ED/2015/1 Classification of Liabilities (Proposed amendments to IAS 1). The Board discussed feedback on the ED from December 2015 to September 2019, pausing the project between 2016 and 2018 while it finalised revisions to the definition of a liability in the Conceptual Framework. As a result of these discussions, the Board made no fundamental changes to the proposed amendments but decided to clarify some aspects of them.



The amendments in Classification of Liabilities as Current or Non-Current (Amendments to IAS 1) affect only the presentation of liabilities in the statement of financial position — not the amount or timing of recognition of any asset, liability income or expenses, or the information that entities disclose about those items. They:

  • clarify that the classification of liabilities as current or non-current should be based on rights that are in existence at the end of the reporting period and align the wording in all affected paragraphs to refer to the "right" to defer settlement by at least twelve months and make explicit that only rights in place "at the end of the reporting period" should affect the classification of a liability;
  • clarify that classification is unaffected by expectations about whether an entity will exercise its right to defer settlement of a liability; and
  • make clear that settlement refers to the transfer to the counterparty of cash, equity instruments, other assets or services.



Effective date and transition

The amendments are effective for annual reporting periods beginning on or after 1 January 2022 and are to be applied retrospectively. Earlier application is permitted.


Additional information

Please click for:

IFRS Interpretations Committee holds January 2020 meeting

23 Jan 2020

The IFRS Interpretations Committee held a video meeting on Tuesday 21 January 2020 to finalise one agenda decision. We have posted Deloitte observer notes for the technical issues discussed during this meeting.

Agenda decision to finalise

IFRS 16 Leases—Definition of a Lease-Shipping Contract: The Committee decided, by a vote of 11, to finalise the agenda decision with two amendments to wording.

Work in progress

There were no new matters that have not yet been presented to the Committee.

More information

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

ICAEW webinar on the TCFD recommendations

22 Jan 2020

The Institute of Chartered Accountants in England and Wales (ICAEW) will be hosting a webinar looking at the Task Force on Climate-related Financial Disclosures' recommendations in more detail.

Further details are available on the ICAEW website.

ICAEW UK GAAP update webinar

22 Jan 2020

The Institute of Chartered Accountants in England and Wales (ICAEW) will be hosting a webinar outlining latest developments and implementation issues in UK GAAP and also recent changes to reporting regulations.

Specific topics to be covered include:

Further details are available on the ICAEW website.

FRC Lab report shows need for improved workforce reporting

20 Jan 2020

A new report from the Financial Reporting Lab of the Financial Reporting Council (FRC) reveals that reporting on workforce-related issues needs to improve to meet investor needs.

The Lab’s report provides practical guidance and examples on how companies can provide improved information to investors. It encourages companies to think of the workforce as a strategic asset and explain how it is invested in. Alongside the report, the Lab also published a summary of the report covering questions companies should ask themselves about their reporting on workforce matters.

Please click for the following additional information on the FRC website:

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