IFRS 10 Consolidated Financial Statements and IFRS 16 Leases—Sale and Leaseback in a Corporate Wrapper: The Committee received a submission asking about the applicability of the sale and leaseback requirements in IFRS 16 to a transaction in which an entity sells its equity interest in a subsidiary that holds only a real estate asset and then leases that real estate asset back. The submitter asked as to how the gain or loss on disposal should be recognised. The staff concluded that the principles and requirements in IFRS 10 and IFRS 16 provide an adequate basis to determine that the transaction is a sale and leaseback and that the requirements in IFRS 16 apply. On that basis the staff recommend that the Committee not add the matter to its agenda.

IAS 12 Income Taxes—Deferred Tax arising from a Single Transaction: In July 2019, the Board published Exposure Draft ED/2019/5 Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12).The staff analysed the respondents' feedback to the ED and will present the preliminary proposed recommendations to the Committee for advice.

Work in progress: The staff are analysing requests related to the hedge of variability in cash flows in real terms and configuration or customisation costs in a cloud computing arrangement.

The full agenda for the meeting can be found here. We will update this page for any changes to the agenda and our Deloitte pre-meeting summaries for the meeting as they become available.

We are broadly supportive of the proposed amendments although we have some minor comments and drafting suggestions.  We encourage the FRC to finalise these amendments as soon as possible so that businesses can take prompt advantage of the relief provided.

A full response to all questions raised in the invitation to comment are contained within the full comment letter.

We agree with the proposed amendments and concur with the FRC’s conclusions in the impact assessment. 

The full response is contained within the full comment letter below. The full response is contained within the full comment letter below. The full response is contained within the full comment letter. full response is contained within the full comment letter below. The full response is contained within the full comment letter below. The full response is contained within the full comment letter below. 

The Board achieved consensus on all issues with the exception of annual cohorts, with nine Board members voting in favour of the cohorts meeting the endorsement criteria and seven members disagreeing. The actual letter containing the DEA is not expected until October as questions to constituents still need to be agreed. Stakeholders will be given four months to comment on the DEA. A final advice will be aimed for by the end of March 2021.

As part of the preparation for the end of the Transition Period, work is being undertaken to ensure the UK is ready to undertake adoption of the Amendments if EU adoption does not occur in December 2020 (as the UK leaves the EU at the end of the transition period on 31 December 2020).

The FRC welcomes stakeholders’ views to inform its recommendation to the BEIS Secretary of State to adopt the Amendments in the UK.

The FRCs initial assessment is that:

• the Amendments meet the criterion of relevance, reliability, comparability and understandability required of the financial information needed for making economic decisions and assessing the stewardship of management, as required by SI 2019/685 (see Regulation 7(1)(c)); and
• application of the Amendments are not contrary to the principle that an entity’s accounts/consolidated accounts must give a true and fair view as required by SI 2019/685 (see Regulation 7(1)(a)).

Additionally the FRC initially concludes that the Amendments will improve the quality of financial reporting, that the benefits of the Amendments are likely to outweigh the costs and that users are likely to benefit from the Amendments.

The press release, Invitation to Comment and draft UK Endorsement Criteria Assessment are available on the FRC website. 

Comments are requested by close of business on Monday 28 September 2020. 

Participants of the field-test were asked to apply the IASB's proposals to their financial statements and answer a questionnaire from EFRAG and the IASB. The results were then discussed in the workshop.

Please click for additional information and the report from the workshop on the EFRAG website.

Results from a similar workshop with corporates were released in August 2020.

The update reports on the EFRAG Board webcast meeting on 24 August and the EFRAG TEG webcast meeting on 24 August.  The publication also covers the activities of the European Reporting Lab.

The update also lists EFRAG publications issued in August including:

• EFRAG's draft endorsement advice on Interest Rate Benchmark Reform – Phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16). 
• EFRAG's summary report around feedback from the field-test workshop conducted on the IASB Exposure Draft General Presentation and Disclosures.

Please click to download the August EFRAG Update from the EFRAG website.fThe update reports on the EFRAG Board conference call on 6 July and webcast meeting on 16 July, the EFRAG TEG webcast meeting on 1-2 July, 8 July and a conference call on 6 July and the EFRAG TEG and EFRAG CFSS webcast meeting on 1 July.  The publication also covers the activities of the European Reporting Lab.fdThe update reports on the EFRAG Board webcast meeting on 24 August and the EFRAG TEG webcast meeting on 24 August.  The publication also covers the activities of the European Reporting Lab.

The task force will be chaired by Patrick de Cambourg, President of the French standard-setter ANC.

Please click for a list of all members in the press release on the EFRAG website.

The full agenda for the meeting is summarised below.

The Committee will discuss the following:

• Administrative matters
• IFRS 10 and IFRS 16 — Sale and leaseback in a corporate wrapper
• IAS 12 — Deferred tax related to assets and liabilities arising from a single transaction
• Work in progress

The full agenda for the meeting can be found here. We will post any updates to the agenda, our comprehensive pre-meeting summaries as well as observer notes from the meeting on this page as they become available.