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FRC launches consultation to adopt International Standard on Assurance Engagements (ISAE 3000)

25 Mar 2020

The Financial Reporting Council (FRC) has launched a consultation on the proposed adoption in the UK of International Standards on Assurance Engagements (ISAE) 3000, 'Assurance Engagements Other Than Audits or Reviews of Historical Financial Information'.

ISAE 3000 was developed by the International Auditing and Assurance Standard Board (IAASB) and contains requirements and application and other explanatory material specific to reasonable and limited assurance attestation engagements, other than audits or reviews of historical financial information.

The FRC is proposing that compliance with ISAE (UK) 3000 will be mandatory only for such types of engagement the FRC specifies. These will ordinarily be particular engagements for which there is a requirement in law or regulation for an assurance report to be provided by an auditor or other assurance practitioner, or where a clear need has been identified to serve the public interest. Voluntary application to other assurance engagements will be permitted unless a subject matter specific standard relevant to the engagement has been issued by the FRC, in which circumstances that subject matter specific standard is required to be complied with.

A small number of edits to the international standard are proposed to reflect that in the UK assurance practitioners are subject to the FRC's Ethical Standard and the ethical pronouncements of their professional body, and that the FRC is not adopting the other, subject matter specific, ISAEs issued by the IAASB. Text related to the International Code of Ethics that remains relevant is being updated to take account of the conforming changes that the IAASB consulted on in 2019. No edits are proposed that would result in non-compliance with the IAASB's requirements in ISAE 3000.

Comments are requested until 22 May 2020.

A press release and the exposure draft can be found on the FRC website here.

ESMA statement on the accounting implications of the COVID-19 economic support and relief measures

25 Mar 2020

The European Securities and Markets Authority (ESMA) has issued a public statement on some accounting implications of the economic support and relief measures adopted by EU Member States in response to the COVID-19 outbreak. The measures include moratoria on repayment of loans and have an impact on the calculation of expected credit losses in accordance with IFRS 9.

ESMA has issued the statement in order to promote consistent application of IFRSs in the EU and avoid divergence in practice on the application of IFRS 9 Financial Instruments in the specific context of the COVID-19 outbreak, specifically as regards the calculation of expected credit losses and related disclosure requirements. In ESMA’s view, the principles-based nature of IFRS 9 includes sufficient flexibility to faithfully reflect the specific circumstances of the COVID-19 outbreak and the associated public policy measures.

Please click to access the statement on the ESMA website.

The European Banking Authority (EBA) has also issued a related statement regarding the prudential framework and accounting implications of COVID-19. The two statements are consistent as regards financial reporting. The statement can be accessed on the EBA website.

FRC publishes its plan and budget for 2020/21

24 Mar 2020

The Financial Reporting Council (FRC) has published its plan and budget for 2020/21.

The strategy has been developed in light of the recommendations made to the government by three independent reviews of the FRC. The FRC indicates that the 2020/2021 strategy sets out its initial response to those recommendations and that the strategy will be replaced in 2021 with a longer-term strategy once the government’s final positions to the recommendations made to it are finalised.

The FRC indicates that moving forward it will reorganise into four divisions consisting of:

  • Regulatory Standards and Codes;
  • Supervision;
  • Enforcement; and
  • Corporate services.

The plan and budget sets out the FRC’s strategic priorities in these four areas:

Regulatory Standards and Codes

  • Promote the Stewardship Code, support signatories to the Code and ensure significant take up. Assess early reporting of implementation.
  • Undertake an annual assessment of adherence with the Corporate Governance Code as well as the Wates Code for private companies.
  • Update the guidance for the UK Corporate Governance Code and/or related enhanced requirements on internal controls, risk management, going concern and resilience/viability.
  • Publish a thought leadership paper on the Future of Corporate Reporting.
  • Deliver FRC Lab projects on Technology and Future Horizons in reporting.
  • Update UK GAAP for recent international developments.
  • Launch a post-implementation review of the Technical Actuarial Standards and establish the necessary capacity to undertake regulatory duties over actuaries.
  • Support the Government’s green finance strategy to embed climate-related issues into corporate reporting and investment decision making.
  • Consider the merits and otherwise of endorsing a framework to measure the impact of companies on society and the environment
  • Assist the Government with creating new structures for setting accounting standards after leaving the EU, specifically the UK Endorsement Board.
  • Establish an audit market monitoring function and devise an appropriate strategy.


  • Taking a risk-based approach, increase the scope and number of Audit Quality Reviews (from 130 in 2019/20 to between 145-165 in 2020/21) and Corporate Reporting Reviews (from 215 in 2019/20 to between 240 and 260 in 2020/21) undertaken.
  • Improve transparency by publishing more information about these individual reviews as well as thematic reviews on key cross-market issues e.g. climate reporting, the use of technology by audit firms and audit quality indicators. 
  • Build and deepen its supervision of the major audit firms, including governance, structure, audit quality management, culture and resilience and report views on each firm accordingly.
  • Expand oversight of the professional bodies and make significant progress on moving decision-making about auditor registration to the FRC in line with the Kingman Review recommendation
  • Develop and publish the FRC’s views on what constitutes good external audit.


  • Deliver robust, fair and transparent regulatory outcomes.
  • Continue to improve the timeliness of its work and ensure more enforcement cases deliver their primary reports to related parties within two years
  • Report on regulatory outcomes and progress through the Annual Enforcement Review and public messaging.
  • Conclude its Carillion related factual investigations and decide upon any enforcement action required.

Corporate services

  • Deliver within budget.
  • Improve management information and publish externally on an agreed regular basis.
  • Improve staff morale and wellbeing.
  • Deliver an integrated communications and stakeholder management strategy to ensure it gets the insights it needs to develop policies, maximise the impact of its work and regularly and clearly communicate with its stakeholders.
  • Assess organisational capability gaps and close them.
  • Monitor risks to achieving its objectives and put controls in place to mitigate where possible.

The plan and budget also covers the actions the FRC will take in relation to its reform, changes to its governance and also resourcing.

The FRC also sets out its budget for 2020/21 for expenditure and funding. Expenditure is being increased in the areas of audit regulation, monitoring the quality of corporate reporting and enforcement.

The press release and Plan and Budget 2020/21 are available from the FRC website.

Companies House issues advice on filing deadlines in light of Covid-19

24 Mar 2020

In light of the impact of Coronavirus (Covid-19) on companies, Companies House has issued guidance on delaying filing deadlines.

Companies wishing to seek an extension should apply before the filing deadline – a delay of up to three months can be requested.

Details are available here including a link to apply online and details of how to apply by post.

IASB issues podcast on latest Board developments (March 2020)

24 Mar 2020

The IASB has released a podcast, featuring IASB Vice-Chair Sue Lloyd, to discuss the deliberations at the March IASB meeting.

The podcast features dis­cus­sions related to:

  • IFRS 17 and the extension of its effective date.
  • Management commentary.
  • Rate-regulated activities.

In addition, Vice-Chair Lloyd comments on the Discussion Paper Business Combinations — Disclosures, Goodwill and Impairment.

The podcast can be accessed through the press release on the IASB website. More in­for­ma­tion on the topics discussed is available through our com­pre­hen­sive notes taken by Deloitte observers at the March IASB meeting.

2020 issued and annotated issued IFRS Standards now available

24 Mar 2020

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

The Issued IFRS Standards 2020 publication contains the Standards as approved by the International Accounting Standards Board for issue up to 31 December 2019. These Standards include changes that are not yet required at 1 January 2020. The Annotated Issued IFRS Standards 2020 includes the same content as Issued 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.

Joint goodwill research paper by ASBJ and HKICPA

24 Mar 2020

The Accounting Standards Board of Japan (ASBJ) and the Hong Kong Institute of Certified Public Accountants (HKICPA Staff) have jointly published a research paper 'Goodwill: Improvements to Subsequent Accounting and an Update of the Quantitative Study'.

The research paper presents recent results of quantitative studies on goodwill, updated from the ASBJ's 2016 quantitative study on goodwill. The standard-setters observe that it is likely that impairment losses on goodwill are recognised too late.

Based on this observation, the research paper discusses the subsequent accounting for acquired goodwill. It presents the conclusion that acquired goodwill should be amortised over time on a systematic basis, and the cash generating unit(s) to which acquired goodwill is attributed should be tested for impairment when there is an indication of impairment.

Last week, the IASB published a discussion paper on goodwill and impairment with the preliminary view that the Board should retain the impairment only approach because there is no compelling evidence that amortisation would significantly improve financial reporting.

Please click to access the research paper on the ASBJ website.

IFRS Foundation appoints new IFRS Interpretations Committee member

23 Mar 2020

The Trustees of the IFRS Foundation have announced the appointment of Dr Jens Freiberg as IFRS Interpretations Committee member.

Dr Freiberg, Head of BDO Germany’s Accounting Advisory and Technical Accounting Groups, is a former member of the IFRS Advisory Council and was a member of the IFRS Committee of the German standard-setter DRSC. He is also a member of the TRG for IFRS 17.

The appointment, effective immediately, is until 30 June 2022.

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

ICAEW publishes a guide on the financial reporting impacts of Coronavirus

23 Mar 2020

The Institute of Chartered Accountants in England and Wales (ICAEW) has published a guide on the financial reporting impacts of Coronavirus.

The guide, which is primarily directed at those preparing accounts under FRS 102, covers:

  • going concern;
  • reflecting conditions which existed at the balance sheet date;
  • non-adjusting post balance sheet events;
  • the Directors' Report and/or Strategic report;
  • 2020 year ends;
  • post balance sheet review period; and
  • conciderations for micro entities.

A press release and the guide is available on the ICAEW website.

IASB releases podcast on IFRS 17

23 Mar 2020

The IASB has released a podcast featuring IASB member Darrel Scott and technical staff member Chalani Mohotti as they discuss the developments at the March 2020 Board meeting related to the amendments to IFRS 17 'Insurance Contracts'.

Specifically, the podcast discusses the Board’s decisions related to effective date of IFRS 17 and the expiry date of the IFRS 9 temporary exemption in IFRS 4.

The podcast can be accessed through the press release on the IASB website. Our summary of the meeting and the results of the IASB's votes is available here.

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