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2021

EFRAG launches survey on the post-implementation review of IFRS 10, 11 and 12

22 Jan 2021

In the context of the post-implementation review of IFRS 10, IFRS 11, and IFRS 12 launched by the IASB in December 2020, the European Financial Reporting Advisory Group (EFRAG) is inviting stakeholders to participate in a survey that addresses a number of areas of the standards that have been identified as potentially unclear.

Separate questions have been developed for preparers and users of financial statements. Auditors, standard setters and regulators are also invited to participate in the survey. The survey is open until 16 April 2021.

Please click for more information and access to the survey on the EFRAG website.

Pre-meeting summaries for the January 2021 IASB meeting

20 Jan 2021

The IASB is meeting on Tuesday 26 January 2021, by video conference. We have posted our pre-meeting summaries for the meetings 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.

Board Work Plan Update: This is a regular update of the work plan. Within the next six months the IASB expects to finalise amendments related to three projects and publish consultation documents for six projects. The Board will not start any remaining research pipeline projects or the PIR of IFRS 5. Rather, as decided at the Board’s October 2020 meeting, the Board will obtain updated information about those projects as part of the 2020 Agenda Consultation to help reassess their relative priority. The Board will be asked at a future meeting to add a narrow-scope project on disclosure requirements in relation to supply chain financing arrangements.

Maintenance and Consistent Application—IFRIC Update: The IASB will discuss the December 2020 IFRIC Update.

Disclosure Initiative— Subsidiaries that are SMEs: The IASB is developing a Standard setting out reduced disclosure requirements for subsidiaries that apply IFRS Standards but meet the definition of an SME. At this meeting, the Board will discuss disclosures about cash-generating units containing goodwill and intangible assets with indefinite useful lives and the scope of the proposed Standard. The staff recommend that it apply to entities that, at any point during their reporting period, are subsidiaries of a parent presenting consolidated financial statements applying IFRS Standards and that the scope should not be limited to single entity financial statements. They also recommend that the consultation document should be an ED.

Primary Financial Statements: In December 2019, the IASB published Exposure Draft ED/2019/7 General Presentation and Disclosures. At the December 2020 meeting the Board began discussing summarised feedback from the 215 comment letters it received, outreach activities, fieldwork and a review of academic literature. The Board did not discuss four of the 11 papers and at this meeting will continue its discussions. The staff are also presenting a redeliberation plan.

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

February 2021 IFRS Interpretations Committee meeting agenda posted

20 Jan 2021

The IFRS Interpretations Committee has posted the agenda for its next meeting, which will be held by video conference on 2 February 2021.

The Committee will discuss the following:

  • Ad­min­is­tra­tive matters
  • IFRS 10 and IFRS 16 — Sale and leaseback of an asset in a single-asset entity
  • IAS 2 — Costs necessary to sell inventories
  • IAS 10 — Preparation of financial statements when an entity is no longer a going concern
  • 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.

Summary of the December 2020 ASAF meeting now available

19 Jan 2021

The IASB staff have published a summary of the Accounting Standards Advisory Forum (ASAF) meeting held via remote participation on 10 December 2020.

The topics covered during the meeting were the following (numbers in brackets are ref­er­ences to the cor­re­spond­ing para­graphs of the summary):

  • Rate-regulated activities (1–9): The ASAF members outlined their plans for outreach on an upcoming Exposure Draft on regulatory assets and regulatory liabilities.
  • Cryptoassets (10–18): The ASAF members provided their preliminary views on the EFRAG’s discussion paper Accounting for Crypto-assets (Liabilities) and whether they support changes to IFRS requirements.
  • Financial instruments with characteristics of equity (19–42): The ASAF members provided feedback on potential refinements to the disclosure requirements discussed in Discussion Paper Financial Instruments with Characteristics of Equity. The session included discussions on the priority of financial instruments on liquidation of an equity, disclosure on an individual entity versus consolidated basis, non-financial liabilities, legal effects, carrying amounts versus fair value, potential dilution of ordinary shares, and terms and conditions of financial instruments.
  • Dynamic Risk Management (43): The staff provided the ASAF members with an update on outreach on core dynamic risk management model.
  • Lack of Exchangeability (Amendments to IAS 21) (44–45): The ASAF members were updated on the developments on the project and were introduced to the upcoming Exposure Draft on narrow-scope amendments to IAS 21 The Effect of Changes in Foreign Exchange Rates.
  • Update and agenda planning (46–48): The ASAF members discussed the Board’s current work plan and planned topics for the March 2021 ASAF meeting.

A full summary of the meeting is available on the IASB's website.

CIPFA/LASAAC consult on changes to the Code of Practice on Local Authority Accounting in relation to accounting for secure housing tenancies and COVID-19-related rent concessions

19 Jan 2021

The Chartered Institute of Public Finance and Accountancy (CIPFA) and the Local Authority (Scotland) Accounts Advisory Committee (LASAAC) are seeking comments on proposed changes to the Code of Practice on Local Authority Accounting in relation to accounting for secure housing tenancies and COVID-19-related rent concessions.

Local authorities in the United Kingdom are required to keep their accounts in accordance with 'proper practices'. This includes compliance with the terms of the Code of Practice on Local Authority Accounting in the United Kingdom (the Code) prepared by the CIPFA LASAAC Local Authority Accounting Code Board (CIPFA LASAAC).

The first area for consultation relates to the accounting for the secure tenancy for tenants within local authorities in the context of both IAS 17 Leases and IFRS 16 Leases. The consultation considers:

  • Whether the leasing standards apply to housing revenue account tenancy agreements (i.e. whether they meet the definition of a lease (under both IAS 17 and IFRS 16).
  • If the leasing standards do apply, whether they are operating or finance leases.
  • What disclosure requirements will be needed by the users of local authority financial information relating to housing tenancies and the related assets.

CIPFA/LASAAC are of the view that secure housing tenancies do not meet the definition of a lease under IAS 17 and therefore do not propose a change to the 2020/21 or 2021/22 Codes. However they have concluded that secure housing tenancies do meet the definition of a lease under IFRS 16. As CIPFA/LASAAC has taken the decision to delay the implementation of IFRS 16 to 1 April 2022, the proposed amendments to the Code therefore mainly focus on changes to the 2022/23 Code. However, consideration has also been made as to whether secure housing tenancies meet the definition of a lease under IFRS 17 to ensure that the accounting prior to the implementation of IFRS 16 is correct.

As CIPFA LASAAC has decided to defer the implementation of IFRS 16 to 1 April 2022, it is also keen to understand whether it would be useful to local authority stakeholders if provisions were included in the Code to provide guidance on the accounting treatment for COVID-19-related rent concessions. UK GAAP under FRS 102 Amendments to FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland and FRS 105 The Financial Reporting Standard applicable to the Micro-entities Regime already provides such guidance and so the proposed amendments to the 2021/22 Code (and possibly as an update to the 2020/21 Code) cross refer to this treatment. This might be useful to local authorities with subsidiaries that apply FRS 102 and that have received such rent concessions.

Comments are requested by 12 March 2021.

A press release, the Invitation to comment and copies of the exposure drafts are available on the CIPFA website.

IIRC publishes revised Framework

19 Jan 2021

The International Integrated Reporting Council (IIRC) has published revisions to the International <IR> Framework, originally released in 2013, to enable more decision-useful reporting.

The IIRC launched the revision process in February 2020 and identified three key themes of the revision: a) business model considerations, b) responsibility for an integrated report, and c) charting a path forward. The third theme was not directly related to the revision but focused on future of corporate reporting, including extended assurance and the role of technology, and was intended to inform the IIRC’s longer-term strategy.

The revisions published today focus on a simplification of the required statement of responsibility for the integrated report; improved insight into the quality and integrity of the underlying reporting process; a clearer distinction between outputs and outcomes; and a greater emphasis on the balanced reporting of outcomes and value preservation and erosion scenarios. The press release states:

As business resilience is tested so severely in the wake of the global pandemic, climate change and growing inequality, effective integrated thinking and reporting is more important than ever. We believe these revisions can help businesses deliver more robust, balanced reporting. The revisions are also aligned with our efforts to develop a global, comprehensive corporate reporting system.

Please click to access the following information on the IIRC website:

IASB announces webinar on discussion paper on business combinations under common control

18 Jan 2021

On 30 November 2020, the International Accounting Standards Board (IASB) published a discussion paper DP/2020/2 'Business Combinations under Common Control'. The IASB has now announced a live webinar that will provide an overview of the discussion paper, explain the Board’s preliminary views and give the viewers an opportunity to ask questions.

The webinar will be held on 27 January 2021.  For the convenience of stakeholders in different time zones, there will be two sessions of the webinar:

  • 09:00-10:00 GMT
  • 15:00-16:00 GMT

To register for the webcast or for more information, please see the press release on the IASB's website.

IPSASB consultation documents on leases

18 Jan 2021

The International Public Sector Accounting Standards Board (IPSASB) has released an exposure draft on leases and a request for information on concessionary leases and other arrangements similar to leases.

Exposure Draft 75 Leases proposes a model that is aligned with IFRS 16 Leases for lease accounting in the public sector. For lessees, ED 75 proposes a right-of-use model that will replace the risks and rewards incidental to ownership model in IPSAS 13 Leases. For lessors, ED 75 proposes to substantially carry forward the risks and rewards incidental to ownership model in IPSAS 13.

The request for information published alongside ED 75 will provide the IPSASB with further information on the issues that need to be considered in accounting for concessionary leases and other arrangements similar to leases that are quite common in the public sector.

Comments on both documents are requested by 17 May 2021.

Please click to access the following additional information on the IPSASB website:

UK Endorsement Board secretariat publishes draft comment letter on the IASB’s DP/2020/1 Business Combinations, Disclosures, Goodwill and Impairment

16 Jan 2021

The UK Endorsement Board secretariat has published its draft comment letter on the International Accounting Standard Board’s (IASB's) Discussion Paper (DP) 2020/1 'Business Combinations: Disclosures, Goodwill and Impairment'.

The Discussion paper introduces possible improvements to the information companies report about acquisitions of businesses to help investors assess how successful those acquisitions have been. The Discussion Paper also seeks feedback on how companies should account for goodwill arising from such transactions.

In its draft comment letter the UK Endorsement Board’s secretariat:

  • Proposes a mixed model for accounting for goodwill, in which an annual amortisation charge is supported by indicator-based impairment testing.
  • Suggests possible methods for establishing the useful life of goodwill in the amortisation calculation.
  • Supports moving to an indicator-only impairment model for goodwill only if amortisation is reintroduced.
  • Seeks further stakeholder input on anticipated cost savings of moving to an indicator-only impairment test for goodwill.
  • Supports the IASB’s proposed simplifications to the impairment test and makes additional recommendations to reduce risks of shielding and management optimism.
  • Supports the principle of improved disclosures on acquisitions but recommends tha the IASB undertake illustrative examples and field-testing.

Comments on the draft comment letter are requested by 25 January 2021. For more information, see the press release on the UKEB's website.

January 2021 IASB meeting agenda posted

15 Jan 2021

The IASB has posted the agenda for its next meeting, which will be held via video conference on 26 January 2021.

The IASB will discuss the following:

  • Work plan update
  • Maintenance and consistent application
  • Disclosure initiative — Subsidiaries that are SMEs
  • Primary financial statements

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.

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