July

Updated IASB and ISSB work plan — Analysis (July 2022)

25 Jul, 2022

Following the IASB's and ISSB's July 2022 meeting, we have analysed the work plan on the IFRS Foundation website to see what changes have resulted from the meetings and other developments since the work plan was last revised in June 2022. Changes are few, but two new projects have been added to the work plan.

Below is an analysis of all changes made to the work plan since our last analysis on 27 June 2022.

Standard-setting projects

  • Disclosure initiative — Targeted standards-level review of disclosures — The IASB will now decide on the project direction in Q4 2022 (previously Q3 2022)

Maintenance projects

  • Lease liability in a sale and leaseback — A final amendment is now expected in September 2022 (previously Q3 2022)
  • Supplier finance arrangements — After discussion the feedback on the exposure draft, a decision on the project direction is now listed as the next project step (no date given)

Research projects

  • Extractive activities — A decision on the project direction is now expected in September 2022 (previously July 2022)
  • Post-implementation of IFRS 9 — Impairment — An initial discussion of this project took place during the IASB's July meeting; the next expected project step is a request for information to be published in H1 2023

Other projects

  • ISSB consultation on agenda priorities — An initial discussion of this project took place during the ISSB's July meeting; the next expected project step is a request for information to be published in Q4 2022
  • Third agenda consultation no changes, the work plan still notes "July 2022" for the feedback statement to be published this would mean later this week

The above is a faithful comparison of the IASB and ISSB work plan at 27 June 2022 and 25 July 2022. For access to the current work plan at any time, please click here.

FRAB June 2022 meeting documents made available

22 Jul, 2022

The associated documents of the Financial Reporting Advisory Board’s (FRAB’s) meeting of 29-30 June 2022 have been made available on the HM Treasury website.

The role of the FRAB is “to ensure that gov­ern­ment fin­an­cial re­port­ing meets the best pos­sible stand­ards of fin­an­cial re­port­ing by fol­low­ing Gen­er­ally Ac­cep­ted Ac­count­ing Prac­tice (GAAP) as far as pos­sible”. The FRAB in­cludes rep­res­ent­at­ives from the ac­count­ancy pro­fes­sion in the private and public sectors, aca­demia and gov­ern­ment bodies. The board meets reg­u­larly to con­sider pro­posed changes to policy and prac­tice.

Key topics dis­cussed during the June meeting in­cluded:

  • An update on International Public Sector Accounting Standards Board (IPSASB) developments.
  • Updates on activities of the International Accounting Standards Board (ISAB) and International Sustainability Standards Board (ISSB).
  • An update on the work of the Financial Reporting Council (FRC).
  • An update on the health sector, including accounting issues resulting from the Health and Care bill.
  • Chartered Institute of Public Finance and Accountancy (CIPFA) local government and ISA 260 report updates.
  • The Department for Business, Energy and Industrial Strategy's (BEIS's) consultation on audit and corporate governance reform. 
  • Updates on IFRS 9 Fin­an­cial In­stru­ments, IFRS 17 In­sur­ance Con­tracts, discount rates and PPP arrangements.
  • Whole of Government Accounts (WGA) update.

The as­so­ci­ated doc­u­ments for the June 2022 meeting are avail­able on the HM Treas­ury website.

FRC publishes guidance on running effective AGMs

22 Jul, 2022

The Financial Reporting Council (FRC) has released new guidance for listed companies to enhance effective shareholder participation when planning and conducting Annual General Meetings (AGMs).

The guidance gives practical advice to help companies ensure that their AGMs are well-run constructive forums for effective engagement. It covers key aspects such as board engagement with shareholders, communication of meeting arrangements, using proxies, and voting processes.

As many companies have now moved to a hybrid form of meetings due to the COVID-19 pandemic, the new guidance also sets out actions to assist companies in making the most of new technologies to increase shareholder engagement. 

The press release and guidance are available on the FRC website.

FRC publishes annual audit quality inspection results 2021/22

22 Jul, 2022

The Financial Reporting Council (FRC) has published its annual inspection and supervision results of the largest audit firms. The results indicate that audit quality continues to improve at the largest audit firms and on the largest audits but that more improvement is needed to deliver consistent audit quality.

The results highlight that the number of audits considered good or requiring limited improvement has improved over the previous two years. Of the 96 audits inspected, 75% were categorised as good or requiring limited improvements (71% in last year’s public reports and 67% in 2020/21).

For the FTSE 100, 93% were categorised as requiring no more than limited improvements compared with 75% in 2020/21 and 64% in 2019/20.  For the FTSE 350 88% achieved this standard compared with 77% in 2020/21 and 71% in 20219/20 and for the FTSE 250 the figure was 85% (78% in 2020/21 and 74% in 2019/20).

Despite the improvements made the FRC highlights that improvements are still required to meet the demands of the market.  The report highlights that common inspection findings related to areas such as estimates, impairment and revenue with good practices identified for areas such as group audits, fraud risk and climate risk.

The press release and links to individual reports are available on the FRC website.

IFRS Foundation Trustees and Due Process Oversight Committee hold June 2022 meetings

21 Jul, 2022

The IFRS Foundation Trustees met on 28–30 June 2022 and the Due Process Oversight Committee (DPOC) met on 28 June 2022. Both meetings were held in Montreal.

Trustees meeting

Meeting ac­tiv­i­ties included the following:

  • Report of the Chair of the Trustees and the Executive Director 
  • Report of the Chair of the IASB
  • Managing the challenges of maintaining convergence with US GAAP
  • Report of the Chair of the IFRS Advisory Council
  • Report of the Chair of the ISSB
  • IFRS Foundation’s sustainability strategy and approach
  • Organisational culture
  • Reports from the Trustee Committee meetings
  • Stakeholder engagements

DPOC meeting

Meeting activities included the following:

  • IASB-related matters
  • ISSB-related matters

For more in­for­ma­tion, see the full summary on the IFRS Foun­da­tion Trustees’ and DPOC meetings on the IFRS Foundation’s website.

We comment on the ISSB’s proposals

20 Jul, 2022

We have commented on the ISSB Exposure Drafts ED/2022/S1 'General Requirements for Disclosure of Sustainability-related Financial Information' and ED/2022/S2 'Climate-related Disclosures'.

We support the proposals in ED/2022/S1 and believe it should facilitate consistent, comparable and timely sustainability information for the capital markets. Given the urgency of addressing climate change and other sustainability matters, we encourage the ISSB to finalise and issue its first standards at the earliest opportunity. Please click to download our full comment letter here.

We also strongly support the proposals in ED/2022/S2. In particular, we welcome that they build on the Task Force on Climate-related Financial Disclosures (TCFD) recommendations. This builds on the success of the TCFD, leverages the SASB Standards to incorporate industry-specific disclosure requirements and responds to the investors’ call for standards that facilitate consistent and comparable information on climate-related risks and opportunities. Please click to download our full comment letter here.

New agenda paper for IASB's session on a rate-regulated activities

19 Jul, 2022

The IASB has updated its meeting agenda and added a new agenda paper for the project on rate-regulated activities.

The additional session will take place on Thursday 21 July 2022 from 09:00 to 09:45 and will continue the discussion on total allowed compensation — regulatory returns on an asset not yet available for use. The timing of other sessions planned for Thursday have also been adjusted.

Please click to access the updated agenda paper on the IASB website. A detailed summary of the new paper has been added to our meeting note page.

G20 Chair summarises meeting of Finance Ministers and Central Bank Governors

19 Jul, 2022

While the meeting of the G20 Finance Ministers and Central Bank Governors on 16-17 July 2022 in Bali ended without a joint communiqué, the G20 Chair has issued a summary of the discussions and results.

Among other topics, participants also discussed sustainability aspects of financial stability. The summary notes:

We look forward to the finalization of standards by the International Sustainability Standards Board (ISSB) for globally consistent, comparable and reliable climate-related financial disclosures.

Please click to access the full summary on the G20 website.

Summary of the June 2022 joint CMAC-GPF meeting

18 Jul, 2022

Representatives from the International Accounting Standards Board (IASB) met with both the Capital Markets Advisory Council (CMAC) and Global Preparers Forum (GPF) in London on 16–17 June 2022. A meeting summary from the joint meeting have now been released.

The topics discussed at the meeting included:

  • IASB and IFRS In­ter­pre­ta­tions Committee update
  • Primary financial state­ments — Operating expenses and unusual income/expense
  • Post-implementation review of IFRS 9 — Classification and Measurement
  • Goodwill and impairment
  • ISSB update and ISSB exposure drafts

The next GPF meeting will be held on 11 November 2022; the next CMAC meeting will take place on 6 October 2022.

For more in­for­ma­tion, see the meeting page and the meeting summary on the IASB's website.

Report of the May 2022 Emerging Economies Group meeting

18 Jul, 2022

The 23nd meeting of the IASB's Emerging Economies Group (EEG) was held in hybrid format on 16–17 May 2022. The IASB has published a full report of the meeting.

Participants at the meeting, which was chaired by IASB member Tadeu Cendon, discussed an update on the ISSB work, the ISSB exposure drafts on general requirements and on climate, lack of exchangeability, IAS 41 Agriculture, and an update on IASB and IFRS Interpretations Committee activities.

Please click for access to the full report on the IASB website.

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