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IFAC calls on G20 leaders to focus on sustainability reporting

16 Sep 2021

The International Federation of Accountants (IFAC) has released 'Four themes, two actions, one goal: G20 Call to Action 2021' urging G20 leaders to continue their commitment to sustainability, inclusion, prosperity, and global collaboration.

In order to achieve the goal of a more sustainable, inclusive, and prosperous economy and society, IFAC describes four areas the G20 should focus on:

  1. Accelerate sustainability and inclusiveness
  2. Recommit to global collaboration
  3. Resist regulatory fragmentation
  4. Focus on public sector transparency and integrity

IFAC comments that delivering on these will take a concerted effort from policymakers, businesses, other organisations, investors and individuals.

IFAC believes these priorities require two actions to be taken urgently:

On the first point, the press release states:

Momentum is growing around developing a global baseline of sustainability standards, with the IFRS Foundation poised to deliver. IFAC strongly supports this crucial work.

Please click to access the Call to Action on the IFAC website.

IVSC perspectives paper on intangible assets

15 Sep 2021

The International Valuation Standards Council (IVSC) has published a perspectives paper 'Time to get Tangible about Intangible Assets' that notes that despite the importance of intangible assets to the capital markets, only a small percentage are recognised on balance sheets.

In order to support public discussion on this topic, the IVSC is publishing a multi-part article series exploring certain fundamental questions in this area. the first part The Case for Realigning Reporting Standards with Modern Value Creation can now be accessed through the press release on the IVSC website.

EFRAG announces outreach events on proposed amendments to the disclosure requirements in IFRS Standards

14 Sep 2021

EFRAG will participate in two webinars on the IASB exposure draft (ED) ‘Disclosure Requirements in IFRS Standards — A Pilot Approach’ and ED ‘Subsidiaries without Public Accountability: Disclosures’.

The first webinar will be co-hosted with the Confederation of Danish Industry and FSR — Danish Auditors and will discuss both exposure drafts. This event will take place on 5 October 2021.

The second webinar will be co-hosted with the Accounting Standards Committee of Germany and will focus on the amendments in the ED ‘Dis­clo­sure Re­quire­ments in IFRS Standards — A Pilot Approach’. This event will take place on 7 October 2021.

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

EFRAG final comment letter on the IASB's proposed new standard on rate-regulated activities

10 Sep 2021

The European Financial Reporting Advisory Group (EFRAG) has issued its final comment letter in response to the International Accounting Standard Board’s (IASB's) Exposure Draft 'ED/2021/1 Regulatory Assets and Regulatory Liabilities' ("the ED").

The proposed new standard is intended to replace IFRS 14 Regulatory Deferral Accounts.

EFRAG supports the overall objective of the ED but has identified a number of concerns with the proposals which it suggests that the IASB should address before finalising the proposed Standard:

  • ​​Whilst EFRAG considers that there is clarity on the scope of the proposed standard within the utilities sector, it considers that there is less clarity for other sectors.  EFRAG highlights that there is a need for further clarification on entities' scope eligibility and recommends that the IASB consider specific scope exclusions.
  • EFRAG notes some instances where the recognised regulatory assets and regulatory liabilities might not meet the definitions provided in the ED.
  • EFRAG disagrees with paragraph B15 of the ED and recommends that the accounting regulatory returns earned on assets not yet available for use should depend on the economic substance of the regulatory agreement. 
  • EFRAG is aware of situations where the proposed requirements on total allowed compensation under paragraphs B3-B9 related to allowable expenses will not reflect the economic substance of the regulatory agreement and recommends that the IASB further analyses whether the requirements in those paragraphs can be applied across diverse regulatory regimes.
  • EFRAG generally supports the proposed recognition criteria but highlights concerns of its stakeholders regarding high levels of uncertainty and indicates that such stakeholders recommend that the IASB considers a higher recognition threshold for cases of high existence uncertainty.
  • EFRAG supports the proposed cash-flow measurement technique, but disagrees with the proposed new concept of a minimum adequate rate as the discount rate for regulatory assets, when the regulatory interest rate provided is insufficient. EFRAG also disagrees with having different discounting approaches for regulatory assets and regulatory liabilities.
  • ​Whilst EFRAG generally agrees with proposed overall disclosure objective and the proposals for presenting regulatory income and regulatory expense, it recommends that the IASB focus more on the usefulness of the information provided and adopt a more balanced disclosure approach.
  • EFRAG recommends modified retrospective application with exemptions or practical expedients for assets with long useful lives and where backdated CWIP regulatory returns will need to be deferred (should the IASB decide to retain ​this proposal).
  • EFRAG recommends that the effective date should be 24-36 months after the publication of the final standard to allow effective implementation.
  • ​EFRAG recommends the formation of a transition resource group to help with the  implementation of the proposed Standard.

The press release and the final comment letter are available at the EFRAG website.

Agenda for the September 2021 ITCG meeting

10 Sep 2021

The agenda is available for the next meeting of the IFRS Taxonomy Consultative Group (ITCG), which will be a virtual meeting on 16 September 2021.

The ITCG will discuss the following topics:

  • Review of common reporting practice
  • Digital reporting implications for the Exposure Draft Management Commentary
  • Technology update

The agenda papers for this meeting are available on the IASB website.

September 2021 IASB meeting agenda posted

10 Sep 2021

The IASB has posted the agenda for its next meeting, which will be held via video conference on 20–24 September 2021. There are seven topics on the agenda.

The Board will discuss the following:

  • Board work plan update
  • Goodwill and impairment
  • Post implementation review of IFRS 9
  • Primary financial statements
  • Dynamic risk management
  • Extractive activities
  • Financial instruments with characteristics of equity

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.

EFRAG calls for an academic study on IFRSs

10 Sep 2021

The European Financial Reporting Advisory Group (EFRAG) is calling for an academic study and literature review on the likely developments in financial reporting.

EFRAG is looking for a holistic assessment of IFRSs (strengths, weaknesses, long-term considerations, topics still to be addressed and European needs and requirements). Applications are welcome by 15 October 2021.

Please click for more information on the EFRAG website.

FRC Lab publishes survey results and resources on UK Electronic Reporting

10 Sep 2021

The Financial Reporting Lab ("the Lab") has published the results of a survey, launched in May 2021, which sought to understand how prepared companies and service providers were for the introduction of structured electronic reporting for annual financial reports which will be required by Disclosure and Transparency Rule (DTR) 4.1.14.

Last year the Financial Conduct Authority (FCA) delayed, by one year, the mandation of Disclosure and Transparency Rule 4.1.14, which introduced a requirement for companies on a regulated market to publish annual reports in XHTML format.  These requirements now apply for financial years beginning on or after 1 January 2021.    

The survey had 46 respondents and show that UK companies have begun to put the right steps in place to meet the requirements with many having undertaken an analysis of the requirements and identified service providers.  Some remeining actions still remain such as running tests and engagement with the board.

The Lab has also published a list of resources to help companies understand and implement the requirements.  It is also reviewing a set of UK and EU ESEF filings with the aim of publishing a best practice report in autumn.

A press release, the results of the survey and a list of resources are available at the FRC website.

IFAC calls on stakeholders to prepare now for global sustainability reporting standards

10 Sep 2021

The International Federation of Accountants (IFAC) published a framework for implementing global sustainability standards at the local level. It focuses on the May 2021 'building blocks approach'. IFAC believes that jurisdictions must begin examining how global standards that the envisioned International Sustainability Standards Board (ISSB) would develop can fit together with sustainability-related reporting requirements set at the jurisdictional level.

The ongoing work of the IFRS Foundation is expected to result in first standards in June 2022, including the ISSB climate standard. Jurisdictions that begin engaging with policymakers now will be able to capitalise on the forthcoming standards as soon as they are finalised. IFAC, therefore, urges its member organisations to continue their support for the IFRS initiative, to engage now with local policymakers, and to provide feedback on the framework for making global sustainability standards local.

Please click for more information on the IFAC website.

Agenda for the September 2021 IFRS Advisory Council meeting

10 Sep 2021

An agenda has been released for the meeting of the IFRS Advisory Council that will be held by remote participation on 13 September 2021.

A summary of the agenda is set out below:

Monday 13 September 2021 (12:00-15:00)

  • Welcome and Chair's preview
  • Updates on Trustees and Board’s Activities
  • Sustainability reporting (approximately two hours of presentation and discussion)
  • Closing remarks

Agenda papers for the meeting are available on the IASB website.

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