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2022

Summary of the December 2021 ASAF meeting now available

19 Jan 2022

The IASB staff have published a summary of the Accounting Standards Advisory Forum (ASAF) meeting held via remote participation on 9-10 December 2021.

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

  • Intangibles (1–8): The ASAF members generally agreed that the issues discussed in the EFRAG’s discussion paper Better Information on Intangibles are relevant and valid and said the IASB should undertake a comprehensive review of IAS 38 Intangible Assets, working with the ISSB to consider any relationship between intangibles and any future sustainability-related disclosure standards.
  • Strategic / agenda consultations (9–42): The AcSB, EFRAG, FASB and AASB are currently seeking feedback from stakeholders on their future agendas. The ASAF shared feedback and questions and discussed how it compares to the feedback on the IASB’s agenda consultation.
  • Agenda planning and feedback from the previous ASAF meeting (43–44): The ASAF members agreed with the proposed topics for the next ASAF meeting and also suggested discussing the projects on primary financial statements and dynamic risk management.
  • Goodwill and impairment (45–66): The ASAF members received an update on the IASB’s recent discussions and provided feedback on the staff examples illustrating the information the staff expects an entity to disclose when applying the IASB’s preliminary views about adding disclosure requirements to IFRS 3 Business Combinations.
  • Disclosure initiative — Subsidiaries without public accountability: Disclosures (67–81): The ASAF members shared their preliminary views on the scope of the IASB’s exposure draft Subsidiaries without Public Accountability: Disclosures published in July 2021.
  • Disclosure Initiative — Targeted Standards-level review of disclosures (81–92): The ASAF members were updated on initial feedback from the IASB’s outreach on the exposure draft Disclosure Requirements in IFRS Standards — A Pilot Approach and shared feedback from their jurisdictions on the IASB’s proposals, including on the guidance for the Board, new disclosure requirements for IFRS 13, and new disclosure requirements for IAS 19.

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

Updated Accounting Direction for social housing providers issued

19 Jan 2022

The Regulator of Social Housing (RSH) has published the latest rules on accounting for registered and social housing providers for preparation of their accounts from January 2022

Private registered providers (PRP's) of social housing are required by section 127 of the Housing and Regeneration Act 2008 to comply with a Direction of the Regulator of Social Housing about the preparation of their accounts.  The Accounting Direction for private registered providers of social housing 2022 sets out the regulator’s directions about how PRPs must prepare their accounts in relation to certain matters  It applies to PRPs in terms of the preparation of their accounts and to profit making PRPs only in so far as their accounts relate to social housing activities.

The Accounting Direction takes effect for accounting periods beginning on or after 1 January 2022 and supersedes the requirements of the Accounting Direction for PRPs of Social Housing 2019.  The 2019 Direction continues to apply to accounts for periods beginning before 1 January 2022 although earlier adoption of this Direction is encouraged.

The Accounting Direction is available at the Regulator of Social Housing website.

UKEB publishes 2022/23 Regulatory Strategy

19 Jan 2022

The UK Endorsement Board (UKEB) has published its 2022/23 Regulatory Strategy for consultation.

The UKEB’s work is focused on influencing the development and adoption of high-quality financial reporting standards that promote the UK public good by ensuring transparency and comparability of financial information, and the smooth functioning of capital markets.

The draft Regulatory Strategy contains the UKEB's 2022/23 workplan and also its strategic objectives for 2022/25.  As the UKEB’s statutory functions relate to influencing the International Accounting Standard Board (IASB) during the development of new and amended International Financial Reporting Standards (IFRS) and the subsequent adoption of those standards, the work plan is necessarily focused on the projects on the IASB's current and future agenda, or those issued standards and amendments requiring adoption for use in the UK.   

The strategic objectives for 2022-2025 include:

  • influencing the IASB and other global players on the development of high-quality financial reporting standards;
  • assessing all new and amended international standards for adoption in the UK on a timely basis; and
  • establishing and maintaining a robust operations framework to support its strategic objectives.

The UKEB's 2022/23 budget is contained within the Financial Reporting Council's (FRC's) draft 3 year plan which was concurrently published.

The 2022/23 Regulatory Strategy consultation will run until 1 March 2022. 

The press release and Regulatory Strategy 2022/23 are available from the UKEB website.

FRC publishes its draft 3-year Plan and Budget for 2022-25

19 Jan 2022

The Financial Reporting Council (FRC) has published a consultation on its 3-year plan and budget for 2022-2025. Comments are requested by 1 March 2022.

The 3-year Plan acknowledges the FRC’s continued commitment to being an effective and transparent regulator as it prepares to transition to the Audit, Reporting and Governance Authority (ARGA). It contains a detailed breakdown of intended expenditure for 2022-23 and a summary of the expected trajectory of overall costs and headcount for the following two years.
 
In setting out its plan, the FRC have considered how, and when, it will need to increase the capacity to adapt to new powers and responsibilities. In 2022/23 overall costs are budgeted to increase by £9.1m with similar growth anticipated in 2023/24, being the year in which ARGA is expected to be created, followed by a period of stability and consolidation from 2025 onwards.

In line with this, headcount is expected to increase in 2022/23 from the current budgeted number of 417 in March 2022, to 489 at March 2023 with similar growth forecast in 2023/24, followed by smaller growth in 2024/25.

The plan details the FRC’s high-level assumptions on key divisional priorities across its four divisions which are: Regulatory Standards, Supervision, Enforcement and Corporate Services.  It also sets out the FRC's strategic priorities for 2022/23 in these areas as follows:

Regulatory Standards and Codes

  • Development and maintenance of standards and codes, including the periodic review of FRS 102, adoption of ISA (UK) 500 and ISA (UK) 600, and post-implementation review and revision of technical actuarial standards.
  • Alignment of its Corporate Governance & Stewardship monitoring and evaluation programme.
  • International influencing of auditing and ethical standards, and significant contribution to non-financial reporting developments in the UK and internationally.
  • Preparation for ARGA’s local audit systems leader role.
  • Activities focused on improvements and innovation to support high quality reporting and audit quality.
  • Promoting the use of technology throughout its policy areas
  • Supporting its objectives and activities through increased stakeholder engagement with impact and influence, including an overhaul of planned publications focused on collective impact.

Supervision

  • Deliver a full programme of high-quality Audit Quality Review (AQR) inspections, Corporate Reporting Review (CRR) reviews and professional oversight visits and publish associated reporting, including thematic reviews.
  • Carry out ISQC inspection work and prepare for ISQM1.
  • Increase supervision of audit firm culture.
  • Assess audit firms’ adoption of operational separation principles.
  • Implement Public Interest Entity (PIE) audit registration decision-making.
  • Increase intensity of forward-looking supervision of audit firms, with more ‘joined up’ regulation of firms’ actions on quality.
  • Negotiate mutual recognition agreements resulting from EU Exit.
  • Perform equivalence and adequacy assessments.

Enforcement

  • Fair, robust, and timely case closures or conclusion through focus of investigations, prioritisation, training, and recruitment.
  • Upskilling and training to respond to changes in AEP from January 2022 and implement future powers arising from regulatory reform.
  • Publication of the Annual Enforcement Review, driving improved behaviours through messaging case outcomes.

Corporate services

  • Develop a statutory funding model for ARGA.
  • Develop and implement an integrated information management strategy, including a medium-term IT strategy and enhanced data analytics and reporting.
  • Enhance cybersecurity risk management.
  • Appropriate workforce planning, aligned with the business planning cycle and designed to incentivise, reward, and retain key skills.
  • Strengthen support infrastructure, including in finance and procurement systems, internal controls, and IT.
  • Legal support for regulatory reform and legal and operational support for the UK Endorsement Board (UKEB).

The draft 3-year plan also covers other areas such aa governance, risks and challenges and KPIs. The FRC also sets out its proposed budget for 2022/23 for expenditure and funding.

The press release and draft 3-year Plan and Budget 2022-25 are available from the FRC website.

IASB member provides update on extractive activities project

18 Jan 2022

IASB member Tadeu Cendon has issued an article which provides an update on the IASB’s extractive activities project. The article explains reasoning behind certain IASB’s decisions related to the scope and objectives of the project.

Specifically, the article discusses:

  • Feedback received from stakeholders on why the Board was looking at extractive activities.
  • Tentative board decisions reached on the scope and objective.
  • Diversity in accounting policy.
  • Challenges in applying certain accounting standards to extractive activities outside the scope of IFRS 6.
  • Reserve and resource information.
  • Upcoming research.

For more information, see the press release and article on the IASB’s website.

EFRAG draft comment letter on supplier finance arrangements

18 Jan 2022

The European Financial Reporting Advisory Group (EFRAG) has issued a draft comment letter on the IASB's Exposure Draft ED/2021/10 ‘Supplier Finance Arrangements’.

The exposure draft adds disclosure requirements, and ‘signposts’ within existing disclosure requirements, that would ask entities to provide qualitative and quantitative information about supplier finance arrangements.

In its draft comment letter, EFRAG supports ‘the project which increases conformity with existing disclosure requirements in IFRS Standards. However, EFRAG considers that the IASB's proposals do not completely address the wider issue of presentation and classification of such arrangements in the primary financial statements, the necessary transparency on liquidity risk and working capital leverage’.

Comments on EFRAG's draft comment letter are requested by 9 March 2022. For more in­for­ma­tion, see the press release and the draft comment letter on the EFRAG’s website.

EFRAG TEG appointments and reappointments

17 Jan 2022

The Board of the European Financial Reporting Advisory Group (EFRAG) has announced the appointment of two new members of — and five reappointments to — its Technical Experts Group (TEG) as well as the appointment of a new TEG Vice Chair.

The new EFRAG TEG members are Carmen Barrasa (accountancy profession, Spain) and Aranzazu Leo Abad (preparer, banking and financial instruments specialist, Spain). Chiara Del Prete, EFRAG TEG Chairwoman, has been reappointed for a second three-year term. In addition, EFRAG TEG members Emmanuelle Guyomard, Erlend Kvaal, David Procházka, and Christoph Schauerte have been reappointed. Jens Berger (Leader of Deloitte Germany's IFRS and Corporate Reporting Centre of Excellence) has been appointed new EFRAG TEG Vice Chair.

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

Summary of the November 2021 ITCG meeting

17 Jan 2022

The IASB has published a summary of the IFRS Taxonomy Consultative Group (ITCG) meeting held on 29 November 2021.

The ITCG discussed the following topic:

  • Digital reporting implications for the Exposure Draft Management Commentary (continued from the September 2021 ITCG meeting)

The meeting summary is available on the IASB website.

Agenda papers available for the UK Endorsement Board meeting on 20 January 2022

17 Jan 2022

The agenda papers for the UK Endorsement Board (UKEB) meeting to be held on 20 January are now available.

The agenda items for discussion are as follows:

  • Due Process Handbook
  • IFRS 17: Update on Consultation (including RITC)
  • Non-Current Liabilities with Covenants (IAS 1) – Approve PIP and Draft Comment Letter
  • Supplier Finance Arrangements—Approve PIP and Draft Comment Letter
  • PIR: IFRS 9 – Classification & Measurement—Approve Final Comment Letter, Feedback Statement and Compliance Statement
  • Intangible Assets – Approve PIP
  • Subsequent Measurement of Goodwill – Approve Updated PIP

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

January 2022 IASB meeting agenda posted

14 Jan 2022

The IASB has posted the agenda for its next meeting, which will be held virtually on 25 January 2022. There are four topics on the agenda.

The Board will discuss the following:

  • Business combinations under common controls
  • Board work plan update
  • Maintenance and consistent application
  • 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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