In the draft comment letter, EFRAG considers that the priorities for the IASB should be to finalise the projects on its active work plan and conduct on a timely basis the planned post-implementation reviews of major standards. 

EFRAG considered the 22 projects described in the request for information and also identified a number of additional possible projects. Overall, EFRAG believes that the following six projects should be given the highest priority by the IASB:

• Connecting financial and sustainability reporting, starting from climate-related financial implications;
• Crypto-assets and related transactions;
• Discontinued operations and disposal groups;
• Intangible assets;
• Statement of cash flows and related matters; and
• Variable and contingent consideration.​

Comments on EFRAG's draft comment letter are requested by 17 September 2021. For more information, see the press release on the EFRAG website. The consultation document EFRAG has published also includes a consultation on EFRAG's own proactive research agenda. A podcast released on 27 July 2021 provides additional insights on EFRAG’s joint consultation on the IASB’s future agenda and EFRAG’s proactive research agenda.

The subject of discussion will be an accounting mismatch between financial assets and insurance contract liabilities that could arise at the beginning of the comparative period when financial assets have been derecognised during the comparative period. The mismatch arises because entities are not permitted to restate comparative information for those assets.

As explaining this mismatch to users of financial statements would be difficult and would not provide useful information because it does not represent an economic mismatch, the staff is asking the Board whether it wants to develop a narrow-scope amendment that would reduce the accounting mismatch, without having a wider effect and creating a risk of unintended consequences.

The amendment the staff is proposing would permit an entity, on initial application of IFRS 17, for the purpose of presenting comparative information, to elect to measure at fair value through profit or loss financial assets derecognised between the transition date and date of initial application of IFRS 17. The transition requirements in IFRS 9 would remain unchanged.

Please click to access the paper for the session (scheduled for Monday 24 May 2021, 13:15-14:15) on the IASB website. A summary of the paper is available here.

Update: The session has been moved to Thursday 27 May 2021, 13:30-14:30.

Update: The original paper has been withdrawn and has been replaced with an updated version of the agenda paper (link to IASB website).

At a high-level conference on 6 May 2021, Mairead McGuinness, European Commissioner for Financial Services, Financial Stability and Capital Markets Union had already indicated that the development of the new standards should be based on the work done by the project task force on preparatory work for the elaboration of possible EU non-financial reporting standards of the European Corporate Reporting Lab, which works under the roof of EFRAG, but is not subject to its governance structure. The letter notes that this approach should be "taken in a pragmatic spirit". However, the letter also notes that the development of the new standards should be handed over to the revised EFRAG governance structure at the earliest opportunity. Further, the letter declares that while EFRAG should aim to submit the first set of draft standards by 15 June 2022, no drafts should be submitted to the EC until EFRAG's revised governance structure has been fully implemented and until the European co-legislators have agreed to the EC's proposals.

Please click to access the letter on the EFRAG website.

The key findings of the research suggest that there are improvements in terms of the quantity of information reported such as:

• Companies are now disclosing more information about engagement with the shareholders and, to a lesser extent, the wider workforce.
• Companies are now disclosing more information about alignment with long-term shareholder interests.
• The Code requirements pertaining to directors’ remuneration have had a positive impact on corporate disclosure practice.
• The extent of disclosure for all Provisions and Principles related to remuneration policies in 2019 has increased compared with 2017.

However, research findings also highlight lack of details on the application of the Code principles and provisions. These observations include:

• No major changes in the extent of disclosure in 2019 compared with 2017 for some sub-items, for example the provisions that would enable the company to recover and/or withhold sums or share awards.
• Although a number of companies reported risks that related to excessive awards, most of these companies failed to explain their plans to mitigate these risks.
• While most companies now show evidence of linking individual awards with the delivery of strategy and long-term performance, fewer companies provided evidence that they did not reward poor performance in their remuneration policies.
• While the majority of companies show evidence of clarity in their engagement with shareholders, this was lower when discussing their engagement with the workforce.
• Many companies used non-financial KPIs in executive pay formulas, but often did not explain why these were chosen or how they were formulated.

The press release and the full report is available on the FRC website. 

EFRAG published its final comment letter on 9 April 2021.

This feedback statement summarises the comments received by EFRAG on its draft comment letter and explains how those comments were considered by EFRAG during its technical discussions leading to the publication of EFRAG's final comment letter.

A press release and the feedback statement are available on the EFRAG website.

The Board will discuss the following:

• Main­te­nance and con­sis­tent ap­pli­ca­tion
• Disclosure initiative — Subsidiaries that are SMEs
• Accounting for derecognized financial assets when insurers first apply IFRS 17
• Goodwill and im­pair­ment
• Financial instruments with characteristics of equity
• Second com­pre­hen­sive review of the IFRS of SMEs Standard
• Primary financial state­ments
• Dynamic risk management

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.

Building on the its 2020 thematic review on climate change, the objective of this project is to learn more about the processes through which companies develop their scenario analyses, how these processes shape the outcomes produced and how those outcomes in turn influence companies’ strategic planning and decision making. The over-riding purpose of the project and associated research is to inform FRC's future regulatory strategy and delivery.

As the use of scenario analysis in climate-related reporting is a relatively recent development, the project will investigate both climate and non-climate applications of scenario analysis, covering a broader range of companies. 

The project will be carried out by Alliance Manchester Business School (AMBS), University of Manchester, which will survey FTSE 350 companies initially with a questionnaire, followed by in-depth interviews with relevant teams and individuals from a representative sample of companies. The extent of scenario reporting in 2020/21 annual reports will also be analysed.

The AMBS team invite expressions of interest from individuals and teams within FTSE 350 companies who would like to participate and in particular those with recent experience of conducting scenario analysis, climate-related or otherwise. 

The online questionnaire has been launched and interviews will take place during May, June and July 2021.

The press release and invitation to participate are on the FRC website. Further information on the survey is available on the FRC website.  

The agenda for the meeting is sum­marised below:

Agenda papers from this meeting are available on the IASB's website.

In May 2020, the IASB amended IFRS 16 to provide lessees with a practical expedient that relieves a lessee from assessing whether a COVID-19-related rent concession is a lease modification. 

In March 2021, the IASB issued Covid-19-Related Rent Concessions beyond 30 June 2021 (Amendment to IFRS 16). This amendment extends the date a lessee is permitted to apply the practical expedient by a year from payments due on or before 30 June 2021 to payments due on or before 30 June 2022.

This amendment has now been adopted for use in the UK. It is effective for annual reporting periods beginning on or after 1 April 2021. Earlier application is permitted, including in financial statements not authorised for issue (or signed) at 31 March 2021.

The adoption statement for the amendment is available on the UK Endorsement Board (UKEB) website. 

The UKEB has also updated its adoption statement report which is available on its website here.

The topics for discussion are as follows:

• Draft Due Process Handbook - Overview, Introductory sections, Influencing processes.
• IFRS 17 Insurance Contracts
• IASB Agenda consultation Work plan
• Post Implementation Review of IFRS 10, 11, 12 – Comment letter to IASB
• Business Combinations Under Common Control – Work plan and Draft comment letter
• Rate Regulated Activities– Project plan

The meeting, agenda papers and details of how to register are available on the UKEB website.

The meeting recording can be found on the UKEB website here.