Agenda papers available for the UK Endorsement Board Public Meeting on 19 January 2023

16 Jan, 2023

The meeting agenda and papers for the UK Endorsement Board (UKEB) meeting on 19 January are available.

The agenda items to be discussed are as follows: 

  • IAS 1 Presentation of Financial Statements Narrow-scope Amendments 2020 and 2022: Project Initiation Plan
  • IASB General Update
  • ISSB General Update
  • Intangibles quantitative research: Project update

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

A recording of the meeting was made available on the UKEB website on 24 January 2023.

ASAF meeting on proposed amendments to IAS 12 regarding the international tax reform

16 Jan, 2023

On 10 February 2023, the Accounting Standards Advisory Forum (ASAF) will hold a virtual meeting on the IASB exposure draft 'International Tax Reform — Pillar Two Model Rules (Proposed amendments to IAS 12)'.

The purpose of the meeting is to encourage ASAF members to share their views on the proposals by submitting a comment letter.

Please click for the agenda and agenda paper for the meeting on the IFRS Foundations website.

CMAC seeks members

18 Jan, 2023

The Capital Markets Advisory Committee (CMAC) is seeking new members and welcomes applications from analysts and investors from all over the world.

New members will start on 1 January 2024 for a term of three years, renewable once for a further three years. For more information, please see the press release on the IASB website.

DPOC holds supplementary meeting

09 Jan, 2023

The Due Process Oversight Committee (DPOC) held a supplementary meeting on 1 December 2022. A summary of the meeting is now available.

One of the topics discussed was a shortened comment period for the proposed amendments to IAS 12 published today. The DPOC approved the shortened comment period in view of the urgency of the matter.

The other topic discussed was the due process review of the post-implementation review of the classification and measurement requirements of IFRS 9.

Please click to access the report of the meeting on the IFRS Foundation website.

EFRAG draft comment letter on IAS 12 and pillar two income taxes

30 Jan, 2023

The European Financial Reporting Advisory Group (EFRAG) has issued a draft comment letter on the exposure draft 'International Tax Reform — Pillar Two Model Rules (Proposed amendments to IAS 12)' the IASB published to respond to stakeholders’ concerns about the potential implications of the imminent implementation of the OECD pillar two model rules on the accounting for income taxes.

In the draft comment letter, EFRAG welcomes the IASB’s efforts to address the concerns of stakeholders about the implications for income tax accounting resulting from jurisdictions implementing the OECD rules.

EFRAG supports the IASB’s proposal to a temporary exception to the requirements in IAS 12. However, EFRAG will engage with its constituents during the outreach of the exposure draft to ascertain the usefulness of the proposed targeted disclosures for users and to assess the feasibility (including costs) for preparers.

Comments on EFRAG's draft comment letter are requested by 27 February 2023. For more information, see the press release and the draft comment letter on the EFRAG website.

EFRAG issues draft endorsement advice on Amendments to IAS 1

06 Jan, 2023

The European Financial Reporting Advisory Group (EFRAG) has issued a draft endorsement letter and a separate invitation to comment relating to the use in the European Union (EU) of 'Classification of Liabilities as Current or Non-current', 'Classification of Liabilities as Current or Non-current - Deferral of Effective Date' and 'Non-current Liabilities with Covenants' ('the Amendments').

EFRAG recommends the endorsement of the Amendments. EFRAG’s initial assessment is that the Amendments meet the technical requirements of the Regulation (EC) No 1606/2002 of the European Parliament and of the Council on the application of international accounting standards.

Comments are requested by 1 March 2023.

For more information, see the press releasethe draft endorsement advice letter and the invitation to comment on the EFRAG website.  EFRAG has also updated its endorsement status report to reflect the draft endorsement advice.

ESAs issue opinions on ESRS

27 Jan, 2023

On 25 November 2022, the European Commission requested the European Supervisory Authorities (ESAs) to provide an opinion on the technical advice on the first set of European Sustainability Reporting Standards (ESRS), which the European Financial Reporting Advisory Group (EFRAG) submitted on 22 November 2022.

The following quotes give a general impression of the opinions issued by the ESAs:

European Securities and Markets Authority (ESMA)

To bring Set 1 from broadly capable to fully capable of meeting that objective, ESMA advises the European Commission to address selected technical issues set out in the opinion. Most notably, these issues relate to possible improvements of the level of consistency vis-à-vis the requirements of the Corporate Sustainability Reporting Directive and other pieces of EU legislation, important clarifications of definitions and terminology and further guidance on the materiality assessment process.

European Banking Authority (EBA)

In particular, the EBA acknowledges the significant improvement of the draft ESRS prepared by EFRAG compared to the versions put out for consultation. Overall, the EBA welcomes the consistency of ESRS with international standards and relevant EU Regulation, and a better alignment with the disclosure requirements under the EBA Pillar 3 framework. As regards proportionality, the EBA believes that the draft standards offer a well-balanced approach with the relevant phasing-in provisions in place. A few aspects should deserve further consideration by the European Commission, including the timetable for the development of the sector-specific standards for credit institutions.

European Insurance and Occupational Pensions Authority (EIOPA)

Concerning international standards, EIOPA underlines the importance of avoiding the fragmentation of sustainability reporting requirements across jurisdictions. To this end, compatibility between ESRS standards and IFRS standards should be ensured so that European companies reporting according to ESRS are automatically considered to be compliant with the IFRS sustainability reporting framework.

The full opinions are are are available on the ESAs website:

FCA consults on changes to streamline its transparency rules on structured digital reporting of financial statements

17 Jan, 2023

The Financial Conduct Authority (FCA) are consulting on changes to streamline its transparency rules for certain companies with securities admitted to UK regulated markets to prepare, publish and file with the FCA their annual financial report in a specific web browser format (XHTML), and to present the financial statements in it in the structured digital format.

Structured digital reporting can improve transparency of market disclosures by applying 'tags' to information.  This makes it easier for market participants to extract, compare and analyse it.  This supports efficient price formation and investors' decision making. 

The FCA are proposing to simplify the structure of its current rules by:

  • simplifying the content and arrangements of its existing requirements by revoking the Technical Standard where they are currently set out, and including the key provisions directly into its Disclosure, Guidance and Transparency Rules sourcebook (DTRs);
  • making a new rule in DTRs requiring issuers to tag their annual financial statements (where they are prepared in accordance with IFRS Accounting Standards) using a ‘generally accepted taxonomy’ for annual corporate reporting in UK regulated markets;
  • issuing guidance on ‘generally accepted taxonomies’ in a new Technical Note on its website.  This will indicate what the FCA consider to be 'generally accepted taxonomies' - i.e. the detailed templates used by companies to label or 'tag' specific information in their annual financial reports, which are based on International Financial Reporting Standards (IFRSs).  In setting out the new Technical Note guidance, the FCA will also update the list of taxonomies currently contained within the Technical Standards to reflect new taxonomy updates published during 2022 such as the ESEF 2022 taxonomy published by the European Securities and Markets Authority (ESMA) in December 2022.

The FCA indicates that its proposals are intended to support companies subject to its rules by:

  • Making its existing requirements easier to locate and navigate.
  • Improving certainty for companies and supporting service providers by creating a new framework that enables the FCA to stay aligned with the taxonomies that are generally accepted for disclosing financial statements in UK regulated markets, in accordance with established practice in the UK.  This new guidance is intended to signal to the market at an earlier stage which taxonomies the FCA considers to be generally accepted for a given financial year and remove the time lag in formally updating FCA rules or Technical Standards on 'permitted taxonomies'.  
  • Making its requirements easier to understand, promoting compliance and reducing the likelihood of making simple formatting errors.

The proposals are directly relevant to all companies that are required to prepare and publish an annual financial report under DTR 4.1 in the format specified in the Technical Standards cross-referenced in DTR 4.1.14R.

Comments are requested until 24 February 2023.

The related publication and online response form can be accessed from the FCA's website.

FRC to host a webinar on ESG

20 Jan, 2023

The Financial Reporting Council (FRC) is hosting a webinar on 31 January which will look at the FRC's Environmental, Social and Governance (ESG) focus.

The webinar will cover the FRC's Statement of Intent on ESG, its achievements so far and its plans for the future. 

Registration details are available on the FRC website.

FRC updates its 2021 Statement of Intent on ESG

01 Feb, 2023

The Financial Reporting Council (FRC) has published an update to its Statement of Intent on Environmental, Social and Governance (ESG).

The FRC first published its Statement of Intent on ESG in 2021.  In it the FRC identified underlying challenges with the production, audit and assurance, distribution, consumption, supervision and regulation of ESG information.  

The update sets out areas of ongoing challenges with ESG reporting, actions to address these, and the FRC's planned activities in this area.  It also sets out a number of initiatives that have been undertaken by the FRC to support its wide range of stakeholders in driving high-quality and comparable ESG reporting and disclosure.  

Looking forwards, the FRC’s key areas of focus regarding ESG reporting during 2023 will include projects and thematics on:

  • ESG Data - how and where to find it and use it effectively
  • Materiality disclosures – what should be considered when determining what are material issues?
  • Support for FRS 102 preparers
  • What are the ESG reporting requirements of the Corporate Governance Code?
  • The link between investors and ESG reporting

A press release and the updated Statement of Intent on ESG is available on the FRC website.

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