The podcast discusses:

• IBOR Reform and its effects on financial reporting — Phase 2;
• Disclosure initiative — Accounting policies;
• Management commentary;
• Extractive activities; and
• Maintenance and consistent application.

The podcast (8 minutes) can be accessed through the press release on the IASB website.

The detailed notes taken by Deloitte observers at the meeting are available here.

Among the proposals included in the consultation document was the suggestion that an EU standard-setter could be installed that would set European non-financial reporting standards. Only recently, the Commission tasked the European Financial Reporting Advisory Group (EFRAG) to undertake preparatory work for possible European standards on non-financial reporting.

While respondents to the consultation agreed that standardisation in the area would be beneficial, the idea of a Europe only solution met resistance. These comments are not reflected in the summary on the EC website. The only paragraph acknowledging that non-financial reporting is not solely a European issue notes that "the EU should cooperate with other major jurisdictions and non-EU investors to make sure that the EU standard is widely recognised".

Beyond the EC consultation, there have been repeated calls for international standard-setting in this area. More often that not, the IFRS Foundation is believed to be the right place to establish such a standard-setter (a parallel Board to the IASB). Most recently, the Eumedion Foundation published a position paper Towards a global, investor focused standard setter for corporate non-financial reporting.

Please see the press release on the IASB website for more information.

Disclosure Initiative: Accounting Policies: In August 2019, the Board published the Exposure Draft (ED) Disclosure of Accounting Policies, which proposed amendments to IAS 1 and IFRS Practice Statement 2. At this meeting, the IASB decided to amend the transition requirements to require entities to disclose material accounting policy information for the current period and disclose comparative accounting policy information if it is relevant to understanding the current period’s financial statements. They also decided that the amendments will apply to annual reporting periods beginning on or after 1 January 2023 with early application permitted and that the effective date of the amendments to IAS 8 resulting from the Accounting Policies and Accounting Estimates project be changed to the same date.

Management Commentary: The IASB supported the recommended potential guidance on reporting financial resources. The IASB discussed requirements and possible supporting guidance on reporting progress in managing key matters, a disclosure objective for performance and position; and possible guidance supporting that objective, including on identifying key facets of performance and position that need to be addressed in management commentary. They also discussed measures and indicators.

Extractive Activities: The staff papers summarise their assessment on how activities within the scope of IFRS 6 would be accounted for in the absence of that Standard, applying the requirements in IAS 16 and IAS 38.

The staff concluded that costs incurred during the exploration phases would not meet the requirements of IAS 16 or IAS 38 for recognition as an asset. The staff also assessed expenditure acquiring the legal rights from a third party and concluded that it could meet the definition of an intangible asset and the recognition criteria, but that application of IAS 36 without the specific requirements in paragraphs 18-22 of IFRS 6 would generally lead to an immediate write‑off of exploration and evaluation assets. Applying the guidance in paragraphs 54 and 55 of IAS 38, exploration and evaluation expenditure incurred subsequent to the acquisition of the legal right would be recognised as an expense as it is incurred. No decisions were made.

Maintenance and Consistent Application—Lack of exchangeability: In April, the IASB decided on how to amend IAS 21 to address the accounting when the spot exchange rate is not observable (because of a lack of exchangeability between two currencies). The IASB decided that the proposed changes be applied prospectively. The staff will prepare the ED, which will be open for comment for 120 days.

IBOR Reform and the Effects on Financial Reporting: The IASB discussed feedback on the proposals for qualifying hedging relationships and groups of items. The IASB decided to permit, rather than require, entities to reset cumulative fair values to zero for the purpose of performing the retrospective effectiveness assessment as proposed in paragraph 102S of the ED and confirmed the proposals in the ED related to the accounting for qualifying hedging relationships subject to clarifications and drafting suggestions as explained in the staff analysis. That completes the deliberations and the staff expect to finalise the amendments.

IFRS Taxonomy: The staff expect to finalise the update the IFRS Taxonomy for the COVID-19-related amendments to IFRS 16 with no changes. There was no paper for this session.

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

Below is an analysis of all changes made to the work plan since our last analysis on 26 June 2020.

Stan­dard-set­ting projects

• Management Commentary — the issuance of an exposure draft is now expected in the first half of 2021 (previously H2 2020).
• Primary Financial Statements — a review of the feedback on its exposure draft is now expected in the fourth quarter of 2020 (previously H2 2020).
• Rate-regulated Activities — the issuance of an exposure draft is now expected in the second half of 2021 (previously H2 2020).

Main­te­nance projects

• Classification of Liabilities as Current or Non-current (Amendments to IAS 1) — this project has been removed from the work plan since the IASB published the final update on 15 July 2020
• Deferred Tax Related to Assets and Liabilities Arising From a Single Transaction (Amendments to IAS 12) — a decision on the project directions is expected in the fourth quarter of 2020 (previously no date given).
• IBOR Reform and its Effects on Financial Reporting — Phase 2 — IFRS amendments are expected in August 2020.
• Lease Liability in a Sale and Leaseback — The issuance of an exposure draft is now expected in September 2020 (previously Q3 2020).
• Supply Chain Financing Arrangements — Reverse Factoring — this project from the area of the IFRS IC's work has been removed from the work plan again after it had been added to the work plan in June 2020.

Research projects

• Business Combinations under Common Control — a discussion paper is now expected in September 2020 (previously third quarter of 2020).
• Extractive Activities — a decision on this project’s direction is now expected in the first half of 2021 (previously review of research in June 2020).
• Financial Instruments with Characteristics of Equity — a decision on this project’s direction is now expected in the fourth quarter of 2020 (previously H2 2020).
• Pension Benefits That Depend on Asset Returns — A review of the research is now expected in the fourth quarter of 2020 (previously H2 2020).
• Post-implementation Review of IFRS 10, IFRS 11 and IFRS 12 — The request for information is now expected in October 2020 (previously Q4 2020).

Other projects

• Due Process Handbook Review — the revised Due Process Handbook is now expected in July 2020 (previously June 2020).
• IFRS Taxonomy Update — 2020 General Improvements and Common Practice — This project has been added to the work plan and a proposed IFRS Taxonomy Update is expected in the fourth quarter of 2020.
• IFRS Taxonomy Update — Amendments to IFRS 17, IFRS 4 and IAS 16 — This project now correctly includes IFRS 4 and discussion of the feedback on the proposed IFRS Taxonomy Update is expected in the fourth quarter of 2020 (previously proposed update expected in July 2020).
• IFRS Taxonomy Update — COVID-19 Related Rent Concessions (Amendments to IFRS 16) — A final Taxonomy Update is expected in August 2020 (previously feedback to be discussed in July 2020).
• IFRS Taxonomy Update — Interest Rate Benchmark Reform — Phase 2 — The timing of a proposed IFRS Taxonomy Update is now expected in September 2020 (previouslyQ3 2020).

The above is a faithful com­par­i­son of the IASB work plan at 26 June 2020 and at 24 July 2020. For access to the current IASB work plan at any time, please click here.

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

• an update on the Lab’s recent recent reports, COVID-19 Resources, action, the future and COVID-19 Going concern, risk and viability.
• an update on recent new projects including a project on corporate disclosure on stakeholders, including statements in response to section 172 of the Companies Act and a project on Video, Virtual and Augmented Reality.
• Other activities of the Lab including work on climate change and the European Single Electronic Format (ESEF).
• A summary of published guidance for companies and auditors regarding COVID-19.

The full newsletter is available on the FRC website here.ull newsletter is available on the FRC website FuThe full newsletter is available on the FRC website herehere

FRED 75 proposes to amend FRS 104 to 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, does not include 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 therefore propose amendments to FRS 104 to introduce requirements covering going concern in a similar way to EU-adopted IFRS Standards.  They are are intended to ensure consistency in this regard going forward.

FRED 76 proposes to introduce explicit requirements for accounting for temporary rent concessions for operating leases occurring as a direct consequence of the COVID-19 pandemic.  The FRED proposes amendments to Section 20 Leases of FRS 102 to require entities to recognise changes in operating lease payments that arise from COVID-19-related rent concessions 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 proposed amendments are restricted 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.  These changes would apply both to FRS 102 and FRS 105 reporters. 

The comment deadline for both FREDs is 1 September 2020.  The proposals in FRED 75 are expected to apply to interim periods beginning on or after 1 January 2021, and the proposals in FRED 76 are expected to apply to accounting periods beginning on or after 1 January 2020.  In both cases early application will be available.

Click for (all links to FRC website):

• Press release
• FRED 75 ‘Draft amendments to FRS 104 - Going concern'
• FRED 76 'Draft amendments to FRS 102 and FRS 105 - COVID-19-related rent concessions'.
• Our related comment letter on FRED 75.
• Our related comment letter on FRED 76.

In an important move, the Sustainability Accounting Standards Board (SASB) and the Global Reporting Initiative (GRI) have announced their future collaboration. Please click for the joint press release on the GRI website.

The GRI has also published an exposure draft that revises its Universal Standards, GRI 101, GRI 102, and GRI 103. Comments are requested by 9 September 2020. Please click for more information on the GRI website.

The GRI has also published a proposed sustainability reporting standard for oil and gas companies that identifies climate change as the single biggest challenge facing the sector. Comments are requested by 6 October 2020. Please click for more information on the GRI website.

New translations of the GRI Tax Standard have been made available in Arabic, Bahasa Indonesian, traditional and simplified Chinese, French, German, Italian, and Spanish. Please click for more information on the GRI website.

The GRI has also launched a new training portal. The GRI Academy is a global online platform that offers courses and tutorials on how organisations can communicate their impacts on the economy, environment and society through the GRI Standards. Please click for more information on the GRI website.

The fifth edition of Carrots & Sticks has been published providing an analysis of the latest trends in reporting provisions, covering 614 reporting requirements and resources cross over 80 countries, including the world’s 60 largest economies. The new report can be downloaded from the Carrots & Sticks website.

The Center for Audit Quality (CAQ) of the American Institute of Certified Public Accountants (AICPA) has released a new report The Role of Auditors in Company-Prepared ESG Information: Present and Future outlining how investors are using ESG information and the evolving, more prominent role of auditors in advancing the reliability, comparability, and relevance of this reporting. The report can be downloaded from the CAQ website.

The Institute of International Finance (IIF) has published Building a Global ESG Disclosure Framework: A Path Forward strongly encouraging the relevant international standard-setting bodies to take practical steps in the coming months towards a harmonised cross-sectoral ESG disclosure framework. The report can be downloaded from the IIF website.

The Good Governance Academy, an international collaboration of business schools, institutions and universities that shares information on critical governance and business science issues, has released a report Integrated thinking and doing an integrated report; the report brings together insights and findings from a Colloquium it held in May 2020. Please click to access the report on the IIRC website.

The International Federation of Accountants (IFAC), International Integrated Reporting Council (IIRC), the Association of International Certified Professional Accountants (AICPA), and the Chartered Institute of Management Accountants (CIMA) have released new guidance for CFOs and finance teams to navigate their organisations toward long-term value creation. Among the actionable insights is driving priorities for value creation into decision making and reporting. Please click to download the publication from the IFAC website.

Recently, the International Auditing and Assurance Standards Board (IAASB) offered two webinars providing guidance on extended external reporting assurance. Recordings of the webinars can be accessed on the IAASB website.

The Accounting Standards Committee of Germany (ASCG) has voiced strong criticism of the European Commission (EC) saying that trying to use sustainability aspects as an excuse for moving European corporate reporting away from IFRSs as issued by the IASB is inappropriate. The statement is part of a response on an EC consultation document that implies that IFRSs hinder sustainable investment. Please click to access the response on the ACSG website.

Recent news from the United Nation's Sustainable Stock Exchanges (SSE) initiative include:

• a new ESG Guidance Database;
• the launch of an Advisory Group on Climate Disclosure;
• Bahrain Bourse ESG reporting guidelines; and
• the first Abu Dhabi Securities Exchange (ADX) annual sustainability report.

The annual report outlines the FRC’s financial position and highlights achievements and challenges in 2019/20, including those related to COVID-19. It also sets out progress made to date as it began to implement the recommendations of the independent review carried out by Sir John Kingman and transition to the Audit, Reporting and Governance Authority (ARGA). During the year it has also carried out a thorough governance review which has resulted in proposed changes to simplify the FRC's structure, clarify responsibilities and improve the speed and effectiveness of decision-making.

The COVID-19 pandemic led governments to deploy significant interventions to support individuals, businesses, the monetary system, and specific sectors, including healthcare. In view of the unprecedented scale of these interventions there is an urgent need to understand their full current and ongoing impacts on public finances as high-quality financial information enhances government decision-making and supports better outcomes for citizens over the medium and longer-term.

The new COVID-19 Intervention Assessment Tool includes:

• A step-by-step process and assessment tool to help assess, evaluate and inform various types of government interventions related to the pandemic; and
• An overview of the way it can support the pathway to accrual International Public Sector Accounting Standards (IPSAS) for governments.

Please click for more information on the IPSASB website.