The first report, Report on the carrying out of functions designated under The International Accounting Standards (Delegation of Functions) (EU Exit) Regulations 2021 sets out how the UKEB discharged its delegated functions, including the adoption of IFRS 17 Insurance Contracts and six narrow scope amendments and in influencing the development of international accounting standards.

The second report, Governance & Due Process Annual Report, sets out how the UKEB fulfilled its governance and due process responsibilities in terms of the design, implementation and embedding of a robust governance and due process framework.

The reports are available on the UKEB website:

• Report on the carrying out of functions designated under The International Accounting Standards (Delegation of Functions) (EU Exit) Regulations 2021
• Governance & Due Process Annual Report

In 2018, following concerns from the sector regarding the adoption of IFRS 9 into the Code of Practice on Local Authority Accounting, the government introduced a statutory override to mitigate the effects of IFRS 9 on local authority accounting.  The statutory override was time-limited to five years, from 1 April 2018 and ending 31 March 2023.  At that time, the government said that it would keep use of the statutory override under review but made no further commitments.

The government is now considering available options. These are:

• to allow the existing statutory override to expire;
• extend the statutory override for an additional period of time; or
• make it permanent.

The consultation seeks views of authorities and other stakeholders to understand the financial risks and benefits associated with the options.

The consultation closes for comment on 7 October 2022.

Please see the government website here for the consultation overview and details on how to respond.

From 5 December 2022 all audit firms and responsible individuals undertaking statutory audit work for PIEs will need to be registered by the FRC.

Audit firms currently auditing PIEs will need to apply and be approved to be included on the PIE Audit Register to prevent any disruption to their work. There will be a transition period from 5 September to 4 December 2022 for existing audit firms of PIEs to submit transitional applications.

The Kingman Review in 2018 found that the FRC had insufficient powers to address systemic issues at the firms, relying on the registration powers of the Recognised Supervisory Bodies. The creation of the PIE Auditor Register was also a key action set out in the government response and is one of the first projects to be implemented.

The FRC has also published transitional guidance. For further information, visit the FRC website.

The UKEB is establishing six advisory groups that will provide specialist knowledge and information as input into its technical decision-making. For more information, see the UKEB website.

During the meeting, par­tic­i­pants discussed the following:

• Feedback received on the ISSB’s Exposure Drafts on General Requirements and Climate-Related Disclosures.
• Update on the discussions between the United States, the European Union and the ISSB on achieving greater interoperability.
• Next steps for the working group.

The next meeting will be scheduled in September 2022. For more information, see the meeting summary on the IFRS Foundation website.

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

• Goodwill and impairment (1–15): The ASAF members discussed two alternatives related to stakeholders’ concerns on the IASB’s preliminary views in Discussion Paper Business Combinations — Disclosures, Goodwill and Impairment.
• Dynamic Risk Management (16–30): The ASAF members provided views on the recent refinements to the DRM model and whether equity should be eligible for designation in the DRM model.
• Post-implementation Review of IFRS 9 (31–43): The ASAF members were updated on feedback received on its post-implementation review of IFRS 9 (PIR) and provided views on contractual cash flow characteristics of financial assets and diversity in practice within certain jurisdictions related to application issues identified during the PIR.
• Financial Instruments With Characteristics of Equity (44–64): The ASAF members were provided an update on the project and expressed their views on the IASB’s tentative decisions on the classification of financial instruments with contingent settlement provisions and the effect of laws on the contractual terms.
• Disclosure Initiative: Targeted Standards-level Review of Disclosures (65–76): The ASAF members provided their views on possible courses of action for the project and discussed whether to suggest that the IASB proceeds with proposed amendments to IFRS 13 and IAS 19. In addition, they expressed the importance of digital reporting.

• Primary Financial Statements (77–102): The ASAF members were provided with an overview of the proposed topics and timing for targeted outreach; updated on the current status of the redeliberations relating to the disclosure of operating expenses by nature in the notes and seek advice on next steps being explored; and provided feedback on the IASB’s recent discussions on income and expenses with limited recurrence (unusual income and expenses).

• Disclosure Initiative — Subsidiaries Without Public Accountability: Disclosures (103–110): The ASAF members provided feedback on the interaction between local regulations and the IASB’s Exposure Draft Subsidiaries without Public Accountability: Disclosures.
• Second Comprehensive Review of the IFRS for SMEs Accounting Standards (111–115): The ASAF members were provided with an update on the IASB’s Second Comprehensive Review of the IFRS for SMEs Accounting Standard and exposure draft Third Edition of the IFRS for SMEs Accounting Standard.
• Agenda Planning and Feedback From Previous ASAF Meeting (116–118): The ASAFD members agreed to discuss proposed topics at its next meeting on 29 September 2022.

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

The key changes to the 2023 Taxonomy Suite are: 

• Initial, and interim reporting, medium-sized companies, and filleted accounts all have new/updated tags and guidance.
• Support has been added for reporting Alternative Performance Measures (APMs), including a new hypercube with new dimensions.
• The Financial Conduct Authority's Diversity & Inclusion (D&I) reporting proposals have been incorporated, including new hypercubes for Gender/Sex and Ethnicity reporting.
• Irish Extension and Charities taxonomies have been updated.
• IFRS 17 Insurance Contracts has been digitalised to reflect the UK endorsement of the Standard. 

The FRC also intends to release a new version of the UK Single Electronic Format (UKSEF) taxonomy.  Further information will be available in its UKSEF Guide which is intended to be published later this year.

The comment period is open for a period two months from the date the taxonomy Suite was published (12 August 2022). The press release (including a link to the draft FRC 2023 Taxonomy Suite) is available on the FRC website.

We agree with the proposed changes. Although the guidance is drafted at a high level, we appreciate that this is out of necessity and that judgement will be required to determine equivalence in some situations.

The lack of clarity over the status of UK-adopted IFRS Accounting Standards and UK GAAP in the European Union (EU) poses a challenge for a number of UK companies, particularly those with EU subsidiaries and those with securities admitted to trading in the EU. We encourage the FRC to work with the UK government and its EU counterparts to obtain confirmation that UK-adopted IFRS Accounting Standards and UK GAAP are deemed equivalent to EU-adopted IFRS Accounting Standards and/or accounts drawn up under the EU Accounting Directive.

Please click to download the full comment letter here.

The meeting will be open for registered observers from 08:30 to 10:00 (CET).

The Sustainability Reporting Board will discuss:

• Approach to materiality in the sector agnostic ESRS
• Sector Prioritisation

The agenda, public documents, and access to the webcast are available on the EFRAG wesbite.

The IASB published the amendments to IAS 12 Income Taxes to clarify how companies account for deferred tax on transactions such as leases and decommissioning obligations.

The Commission Regulation amending Regulation (EC) No 1126/2008 adopting certain international accounting standards in accordance with Regulation (EC) No 1606/2002 of the European Parliament and of the Council was published in the Official Journal of the European Union on 12 August 2022.