The workshop is open to academics, standard-setters, accounting professionals and regulators and is follow-up to the request for paper submissions on diverse aspects of disclosures by the IASB, Accounting in Europe and The British Accounting Review. For more information, see the press release on the IASB’s website.

The Committee discussed an ongoing matter, the comment letter analysis for one tentative agenda decision and an educational paper.

Ongoing matter

IAS 37 Provisions, Contingent Liabilities and Contingent Assets—Negative low or new energy vehicle credits: In its November 2021 meeting, the Committee discussed a submission asking whether an entity with negative low emission vehicle credits has a present obligation that meets the definition of a liability in IAS 37. In the meeting, Committee members generally agreed with the staff's analysis that an entity that has generated negative credits has an obligation that meets the definition of a liability in IAS 37. The staff had edited the wordings according to some Committee members' suggestions and analysed the implications of the consensus in IFRIC 6 Liabilities arising from Participating in a Specific Market—Waste Electrical and Electronic Equipment in an appendix to the paper. In this meeting, despite the concerns raised by some Committee members on various aspects, the Committee decided, by a majority vote, to finalise the agenda decision with proposed refinements to the wordings.

Comment letter analysis

IFRS 9 Financial Instruments and IAS 20 Accounting for Government Grants and Disclosure of Government Assistance—TLTRO III Transactions: In its June 2021 meeting, the Committee discussed a submission asking how banks account for the European Central Bank (ECB)’s Targeted Longer-Term Refinancing Operations (TLTRO). Specifically, the submission asked whether the TLTRO III tranches are loans at a below-market interest rate which should be accounted for as a government grant. The staff analysed the comment letters and recommended finalising the agenda decision with minor editorial changes. In this meeting, despite the concerns raised by some Committee members, the staff still considered that there are merits in finalising the agenda decision and the Committee decided, by a majority vote, to finalise the agenda decision with some editorial changes.

Education session

IFRS 17 Insurance Contracts—Profit recognition for annuity contracts: The Committee received a submission about determining how to recognise unearned profit as revenue based on the services an entity provides to policyholders of annuity contracts in a scenario where an entity includes unearned profit in the measurement of insurance contracts and subsequently recognises it as revenue as the entity provides services. The paper provided an overview of the applicable IFRS 17 requirements and other background related to those requirements.

Administrative matters

Work in progress: The staff are in the process of analysing three matters:

• Rent Concessions: Lessors and Lessees (IFRS 16 and IFRS 9)
• Special Purpose Acquisition Companies (SPAC): Accounting for warrants at acquisition (IFRS 2 or IAS 32)
• Special Purpose Acquisition Companies (SPAC): Classification of Public Shares as Liabilities or Equity (IAS 32)

More In­for­ma­tion

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

The participants discussed:

• Agenda consultation — Main discussion points were the strategic direction and balance of the IASB’s activities, criteria for assessing the priority of accounting issues, and financial reporting issues that could be added to IASB’s work plan. Another topic that saw comprehensive discussion was the connectivity between the IASB and the ISSB. Lastly, participants discussed suggestions to partner further with national standard setters.
• Post-implementation reviews — Participants discussed how to prioritise projects arising from post-implementation reviews.

The full meeting summary (8 pages) is available on the IASB's website.

The first webcast (approx. 2 minutes) provides background information about reverse factoring and other supplier finance arrangements. The second webcast (approx. 9 minutes) illustrates how the IASB’s proposals aim to enhance the transparency of supplier finance arrangements.

Both webcast can be accessed through the press release on the IFRS Foundation website.

The update sets out that following the EFRAG General Assembly in January 2022, the new Sustainability Reporting Pillar has now been integrated into EFRAG’s organisational structure, such that from now on EFRAG Financial Reporting Board and TEG are indicated as ‘EFRAG FR Board/TEG’ and EFRAG Sustainability Reporting Board and TEG as ‘EFRAG SR Board/TEG’.

The update reports on the EFRAG FR Board webcast meetings on 14 and 26 January, the EFRAG FR Board and EFRAG FR TEG joint webcast meeting on 26 January and the EFRAG FR TEG webcast meetings held on 18-19 January and 24 January. The update also covers EFRAG’s sustainability reporting and related activities as well as webinars and online outreaches.

The update also lists publications issued in January including:

• EFRAG's Final Comment Letter in response to the IASB's Exposure Draft ED/2021/3 Disclosure Initiative in IFRS Standards - A pilot Approach (Proposed Amendments to IFRS 13 and IAS 19)
• EFRAG’s Final Comment Letter in response to the IASB Request for Information on the Post-implementation Review of IFRS 9 - Classification and Measurement
• EFRAG’s Draft Comment Letter in response to the IASB's Exposure Draft ED/2021/10 Supplier Finance Arrangements
• EFRAG’s Draft Comment Letter in response to the IASB's Exposure Draft ED/2021/9 IAS 1 Non-Current Liabilities with Covenants

Please click to download the January EFRAG Update from the EFRAG website.

Key takeaways from the interview include:

• Mr Faber places sustainability at the core of business strategy and believes the development of ‘high-quality global standards for disclosing sustainability information will significantly reduce greenwashing ‘noise’ and help companies and investors have meaningful conversations about what really matters to them and the concrete steps taken to implement sustainability commitments’.
• He commented that way of viewing the linear economic system is coming to an end and focus needs to be put in addressing volatilities associated with climate change in order to manage and mitigate its effect.
• Previous role as Chair of Danone provided him with experience in leadership and working with stakeholders from all over the world.
• Mr Faber looks forward to getting to know his new colleagues, working out the details of the prototypes developed by the Technical Readiness Working Group, and engaging with stakeholders.
• Some challenges he noted were getting the ISSB up and running which includes the appointment of a diverse group of ISSB members. In addition, the creation of a timeline that meets the need to quickly produce these standards while making sure stakeholders have enough time to provide feedback. Success in the first year will be measured by accomplishing the goals set out by the IFRS Foundation Trustees and overcoming the challenges noted.
• ISSB will learn for the standard-setting process already established by the IASB. The two organisations will collaborate as much as needed during the process.
• A public consultation on the future work plan is being developed. The work plan will assist the ISSB on which topics it should focus on first.
• Sustainability disclosures will play an important role to reach the objectives set in the Paris Agreement. He commented that ‘helping build a globally accepted language about these emissions that will be a foundation for effective dialogue and decision making among all the stakeholder groups of the Paris Agreement’.

The full interview is available on the IFRS Foundation’s website.

Exposure Draft (ED) 81 proposals include:

• Clarifying the role of prudence in public sector financial reporting;
• Revised definitions of an asset and a liability;
• Clarifying what constitutes a transfer of resources when determining whether an entity has a liability; and
• Restructuring guidance on liabilities to improve clarity for users of the Framework.

Comments on the ED are requested by 31 May 2022.

The following additional information is available on the IPSASB website:

• Press release
• Access to the exposure draft and an At a Glance summary

Participants at the meeting, which was chaired by IASB member Tadeu Cendon, discussed subsidiaries without public accountability, the equity method of accounting, the post-implementation review of IFRS 9. In addition, the EEG received an update on sustainability reporting as well as a general update on IASB projects.

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

The corrections relate to IFRS 9 Financial Instruments and IAS 24 Related Party Disclosures. The same corrections also apply to subsequent IFRS publications.

Editorial corrections do not change the meaning or application of pronouncements, but instead correct inadvertent errors. The editorial corrections can be viewed on the editorial corrections page of the IASB's website.

IPSAS 43 Leases contains a model that is aligned with IFRS 16 Leases for lease accounting in the public sector. For lessees, IPSAS 43 introduces a right-of-use model that will replace the risks and rewards incidental to ownership model in IPSAS 13 Leases. For lessors, IPSAS 43 substantially carries forward the risks and rewards incidental to ownership model in IPSAS 13.

IPSAS 43 has an effective date of 1 January 2025 as a three-year period to apply IPSAS 43 provides public sector entities time to prepare for the new requirements and allows for learning to be drawn from the private sector experience in applying IFRS 16.

The publication of IPSAS 43 completes the IPSASB’s first phase of work on leases. The IPSASB will continue its work by considering additional public sector specific issues in a separate project on other lease-type arrangements.

The following additional information is available on the IPSASB website:

• Press release
• Access to the new standard, introductory webinar and At a Glance summary