Mr Esterer recently worked at Bank J. Safra Sarasin as Head of Core Equities, leading a team of portfolio managers and analysts who manage the bank’s regional and discretionary equity investment strategies. Previously, he worked at Swisscanto as head of global equities. He is currently a member of the IASB's Capital Markets Advisory Committee (CMAC). His first term as IASB member will commence in April 2023.

The press release on the IFRS Foundation website announcing the appointment also notes that the appointment of the Vice-Chair of the IASB is expected by the end of the year.

The FRC noted in their Environmental, Social and Governance (ESG) statement of intent that reporting in this area is often too high level and fails to provide users with sufficient information to enable them to understand the commitments an entity has set, and its ability to deliver against its targets.

The Lab report outlines the three key elements that investors want to understand about net zero disclosures:

• Commitments: the level of ambition, scope, nature and timing of the commitment, and what is included and excluded.
• Impacts: how the commitment impacts strategy and business model, including information on transition plans, assumptions, uncertainties, and risks and opportunities.
• Performance: how performance is being measured in the short, medium, and long term. How high-quality data and accountability will be ensured, and actions management is taking in response to changes.

The FRC Lab report also highlights investors’ ask for clarity around the use of climate change terminology, including the terms such as ‘net zero’, ‘carbon neutral’, science-based’ or ‘Paris-aligned’.

Companies are at various stages on the journey to net zero – with some companies developing definitions and refining what it is they measure, while others are further along in their transition plans. The Lab report thus helpfully aims its recommendations for companies at either a foundational or advanced stage. Companies at the foundational stage should focus on providing a simple and clear understanding of their commitment, including high-level targets, timelines and impacts. While companies that are more advanced in their net zero reporting should now be providing updates on progress and any refined goals, with more detail on impact and accountability.

The report acknowledges that both investor and company understanding in this area is evolving, and that measuring impact and reporting net zero targets, and supporting information, is an iterative process.

The report is accompanied by a separate example bank which provides some practical examples of current good practice to help companies improve their disclosures.

Further information, the full report and the examples bank are available on the FRC website.

The two main topics for the meeting will be:

• Review of practical implementation of international standards of accounting and reporting in the private and public sectors; and
• Good practices in and approaches to the practical implementation of sustainability reporting requirements.

The background papers for these two topics are available in Arabic, Chinese, English, French, Spanish, and Russian and can be accessed here.

The list of speakers includes Jingdong Hua, Vice-Chair of the International Sustainability Standards Board (ISSB).

The workshop before the ISAR meeting this year (31 October 2022) will focus on "Regional Partnerships for the promotion of sustainability and SDG reporting".

The following topics were discussed:

Goodwill and Impairment (IASB) and Identifiable Intangible Assets and Subsequent Accounting for Goodwill (FASB)

The IASB has, and the FASB had, on their respective agendas projects covering the accounting for goodwill and intangible assets acquired in a business combination. The purpose of this meeting was to provide an opportunity for FASB and IASB members to discuss the status of the respective projects; the subsequent accounting for goodwill—including the FASB’s progress with developing an amortisation-with-impairment model and recent decision to deprioritise and remove the project from its technical agenda, and the IASB’s research on this topic; and the redeliberations of the IASB in relation to disclosures about business combinations. FASB members updated the IASB as to why they had removed the project from the agenda. One of the main reasons why the FASB could not agree on a way forward was that they did not have a clear objective as to whether the project was to reduce cost or to increase benefits. The IASB Chair highlighted that the IASB would have to consider the objective of their project before making a decision on amortisation in November. The boards discussed whether the impairment model could be improved and whether some intangibles could not be separated from goodwill. A FASB member asked whether the IASB would be prepared to split the amortisation part of the project from the disclosure part of the project if they ran into similar difficulties as the FASB. The IASB Chair confirmed that they are prepared to do so if necessary. The other main discussion point was the exemption the IASB tentatively decided to provide with regard to disclosures that are commercially sensitive.

Disaggregation-related projects

Both the IASB and the FASB are currently undertaking, or will undertake, projects whose objectives include providing users of financial statements with more disaggregated information. The purpose of this meeting was to provide both boards with an opportunity to share comments and ask questions about these projects. The boards discussed their projects on the statement of cash flows; the FASB has already started whereas the IASB has only just added a research project. They discussed investor calls for more disaggregation and more information about direct cash flows. They also discussed income statement disaggregation, including the difficulty of defining unusual items. A suggestion was made by a FASB member that this was better left for management commentary.

Digital Assets

The boards discussed the results of the FASB’s research and outreach related to digital assets, which led the FASB to add a project to its technical agenda—Accounting for and Disclosure of Crypto Assets. The IASB outlined its work and its decision not to add a project on cryptocurrencies and related transactions to its workplan. The discussion mainly focused on when to start addressing the crypto asset issue, particularly whether the boards should act now while the issue is not pervasive (i.e. leading the market) or wait until it becomes pervasive (i.e. following the market). There were strongly held, but opposite, views within the IASB about whether the IASB should start a project.

2021 Agenda Consultation (FASB) and Third Agenda Consultation (IASB)

Both the IASB and the FASB have recently finalised their agenda consultations. The purpose of this meeting was to provide both boards with an opportunity to share comments and ask questions about these consultations. The FASB’s new project on software costs sparked some interest among IASB members. The IASB Chair noted that both boards will look into issues around intangibles and cash flow statements and that US GAAP and IFRS are not converged for those areas. He said it would be good to exchange information between the boards on these projects, keeping the broader constituency of both boards in mind.

Please click to access the detailed notes taken by Deloitte observers for the entire meeting.

The first webcast provided an overview of the project. Now another six webcasts have been released that focus on elements of DRM. They explain:

• Risk management strategy and target profile (webcast 2)
• Current net open risk position (webcast 3)
• Risk mitigation intention and benchmark derivatives (webcast 4)
• Designated derivatives (webcast 5)
• Retrospective assessment and unexpected changes (webcast 6)
• Measurement of the DRM adjustment (webcast 7)

Please click to access all webcasts released so far on the IFRS Foundation website.

During its meeting on 13 October 2022, the main discussions will focus on the feedback on the ISSB exposure drafts, the ISSB agenda consultation, and capacity building in developing and emerging economies. There are no papers for the meeting. The full agenda is available here and registration as an observer is possible here (both links to the IFRS Foundation website).

The letter notes the July 2022 FSB progress report on addressing climate-related financial risks and comments on the need for interoperability:

The development of climate-related corporate disclosures provides a unique opportunity to avoid harmful fragmentation and create a global baseline standard that enables users to compare and aggregate exposures across jurisdictions. Interoperability between the common global baseline and national and regional jurisdiction-specific requirements will be essential. This needs to be built in early on, and certainly before frameworks are finalised and become hard to adjust.

Please click to access the full letter on the FSB website.

An upcoming batch of six webcasts will discuss each element of the DRM model and a final webcast will focus on a walkthrough of illustrative examples of how the DRM model could apply in practice.

For more information, see the press release and webcast on the IFRS Foundation's website.

The Board will discuss the following:

• ISSB consultation on agenda priorities
• General sustainability-related disclosures
• Climate-related disclosures
• General sustainability-related disclosures and Climate-related disclosures — Interoperability
• Industry-based materials

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.

The Board will discuss the following:

• Rate-regulated activitie
• Contractual cash flow characteristics
• Equity method
• Taxonomy
• Disclosure initiative — Targeted standards-level review of disclosures
• Maintenance and consistent application
• PIR of IFRS 9 — Classification and measurement
• Disclosure initiative — Subsidiaries without public accountability: Disclosures
• Goodwill and impairment
• ISSB Update

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.