The following topics were discussed:

Work plan: The IASB received an update on its work plan. No decisions were made.

Rate-regulated Activities: The IASB redeliberated the proposals in the Exposure Draft Regulatory Assets and Regulatory Liabilities and made decisions on credit and other risks and the direct (no direct) relationship concept.

Equity Method: The IASB made decisions on the implications of applying its tentative decisions (for investments in associates) to investments in subsidiaries in separate financial statements, and joint ventures. The IASB also decided to propose amendments to improve the disclosure requirements for investments in associates but decided to retain the project’s scope.

Climate-related Risks in Financial Statements: The IASB decided that the objective of the project is to explore whether and, if so, how targeted actions could improve the reporting of financial information about climate-related and other uncertainties in the financial statements. The IASB also decided on the proposed potential actions to help address concerns about reporting the effects of climate-related risks in the financial statements.

Amendments to the Classification and Measurement of Financial Instruments: The IASB discussed the feedback received in response to the Exposure Draft. No decisions were made.

Business Combinations—Disclosures, Goodwill and Impairment: The IASB received a summary of tentative decisions made to date and made decisions about the remaining technical aspects of this project. The IASB also gave permission to ballot an Exposure Draft.

Extractive Activities: The IASB decided not to develop requirements or guidance on the information an entity discloses about its exploration and evaluation expenditure and activities. However, the IASB agreed to remove the temporary nature of the exemption in IFRS 6.

Business Combinations under Common Control: The IASB discussed the project direction and the measurement method to apply to a business combination under common control. No decisions were made.

Second Comprehensive Review of the IFRS for SMEs Standard: The IASB discussed overarching topics, which will assist the IASB in its redeliberations of the proposals in Exposure Draft Third edition of the IFRS for SMEs Accounting Standard. The IASB also discussed specific proposals in the ED with regard to revenue and impairment of financial assets. On impairment, the IASB decided that the problem it addressed in introducing the ECL model in IFRS 9 does not meet its principle of relevance to SMEs because the population of entities eligible to apply the IFRS for SMEs Accounting Standard that have significant exposure to credit risk is expected to be small.

Disclosure Initiative—Subsidiaries without Public Accountability: Disclosures: The IASB decided to propose amending the new Standard to require an eligible subsidiary to disclose the strategic rationale for undertaking a business combination and whether the discount rate used in calculating value in use is pre-tax or post-tax. In addition, the IASB decided to ensure the wording of the disclosure requirement in the new Standard in relation to IFRS 3:B64(i) aligns with the proposals made by the IASB in the project on Business Combinations—Disclosures, Goodwill and Impairment and to amend the new Standard to require an eligible subsidiary to disclose information about the contribution of the acquired business.

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

The Board will discuss the following:

• Business combinations under common control
• Joint session: Disclosure initiative — Subsidiaries without public accountability: Disclosures and Business combinations — Disclosures, goodwill and impairment
• Rate-regulated activities
• Climate-related risks in the financial statements
• Extractive activities
• Equity method
• Second comprehensive review of the IFRS for SMEs
• Amendments to classification and measurement
• Board work plan 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.

The Boards will discuss the following:

• Performance reporting
• Disclosure projects
• Business combinations / Equity method of accounting
• Accounting for sustainability-related matters in the financial statements
• Intangibles
• Other projects

The full agenda for the meeting can be found here. We will post any updates to the agenda as well as an overview from the meeting on this page as they become available.

The Committee will discuss the following:

• IFRS 3 Business Combinations — Payments contingent on continued employment during handover periods
• Comment letters on tentative agenda decisions
  • IFRS 17 Insurance Contracts and IFRS 9 Financial Instruments — Premiums receivable from an intermediary
  • Homes and home loans provided to employees
  • IFRS 9 Financial Instruments — Guarantee over a derivative contract
• Administrative matters: Work in Progress

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 following topic was discussed:

International Applicability of the SASB Standards: In this meeting, the staff presented feedback that the ISSB received in response to the Exposure Draft Methodology for Enhancing the International Applicability of the SASB Standards and SASB Standards Taxonomy Updates. The staff considered that the feedback broadly supported the ISSB’s direction and the paper stated that almost all respondents agreed with the ED. The ISSB made suggestions on how the staff and the SASB Board Advisors should approach finalising its application of the methodology.

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

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 session began with two presentations of recent research on climate-related risks in the financial statements that illustrated the backdrop against which the IASB is pursuing its project.

A representative of the Australian Accounting Standards Board (AASB) presented forthcoming research Climate-related risks disclosures in the notes to financial statements: Descriptive evidence from Australia that examines whether entities have considered the effects of climate-related risks on their financial statement items and developments by comparing 2018 and 2022 financial statements. Findings included an increase in disclosures, disclosures provided in a broader range of industries, more items in the financial statements considered, but also many generic disclosures and much room for improvement. Findings also showed that larger entities are more likely to make detailed disclosures about climate-related risks in their financial statements and some disclosures may be included to mitigate litigation risks. In addition, general AASB research on the topic revealed that users of financial statement bemoan a lack of transparency, consistency in disclosing the issues, disclosures of assumptions and effects, and quantification.

A representative of the UK Endorsement Board (UKEB) presented recent research on the topic, including the two recently published research reports on connectivity. The research revealed a significant increase in the frequency of climate reporting in annual reports, however also concerns with the lack of connectivity within annual reports. Estimates and judgements were identified as a critical area of poor connectivity. In discussing the research findings, the UKEB advisory and working groups did not consider that accounting standards were deficient but noted a disparity between investor expectations and preparer’s ability and willingness to disclose potential impacts of climate in the financial statements. Also, while users accepted that entities cannot determine the full potential impact of climate risks, they expect the next phase of reporting to connect material sustainability disclosures to the financial statements.

Meeting participants were then presented with an overview of the IASB project recently renamed "Climate-related and other uncertainties in the financial statements". The presentation focused especially on the IASB's September 2023 discussions and decisions on the project where Board members concluded that requirements in IFRS Accounting Standards are generally sufficient, that there are some challenges in application, that there is the desire for timely action, and that this is an evolving area particularly with reporting developments from the ISSB and others. The Board decided to explore the development of a package of practical examples, to explore possible targeted amendments to improve disclosures about estimates in the financial statements, to refer some issues to the IFRS Interpretations Committee and to consult with the IFRS IC on others, and to continue to monitor developments in this area.

Following these three presentations, participants were invited to discuss the research findings and whether the IASB decisions would help to address them. Comments included:

• Some participants felt that the IASB's planned actions lacked ambition and called for "brave" decisions. They noted that the IASB should not duck away from more decisive action just because it would be difficult. Others, however, conceded that by exploring targeted improvements regarding estimates and judgements had indeed chosen the most difficult issue.
• While research had revealed that some preparers agree that the requirements especially in IAS 1 are sufficient, some seemed to use that as an excuse to continue not to report in a meaningful manner about climate-related risks or other uncertainties.
• It was noted that messaging was important so that the statement that IFRS accounting requirements are sufficient does not translate into the message that no change is needed. It might also help to clarify what financial statements are meant to achieve.
• Participants agreed that the change needed is behaviour change. It was questioned whether this could be achieved without standard setting or other more decisive actions. It was noted repeatedly that the November 2019 article by Board member Nick Anderson about how existing requirements within IFRSs relate to climate change risks was brilliant and shared often, but had not lead to any discernible change in behaviour.
• Participants supported the re-calibration of the project towards climate-related "and other uncertainties". It was noted that this reflected the IASB's principle-based approach to standard setting and also reflected practice where climate-related risks could not always be isolated from other uncertainties. However, it was also warned that the IASB should not lose sight of the most important issues by looking at too many uncertainties and should also not lose sight of short-term risks.
• While there was general support for the IASB to take action, it was noted that the IASB should not stray into the ISSB's remit, that duplication should be avoided, but also that connectivity should always be kept in mind and that IASB and ISSB should work together to provide missing links. It was noted that language is a very important means of linking sustainability issues with financial reporting requirements.
• On the question what national standard setters could contribute to the needed behaviour change suggestions included monitoring and reviewing developments, publishing results of research and reviews, communicating expectations, highlighting improvements and providing best practice examples, as well as working, where possible, with preparers in reporting lab environments.
• Overall there seemed to be a view that the project might be more complex than the IASB thinks and more decisive action might be needed, but participants also encouraged the IASB to build on the established concepts people already use and not to "throw the baby out with the bathwater".

The event saw a panel discussion with IASB Vice-Chair Linda Mezon-Hutter on connectivity where participants discussed:

• Aspects of connectivity (What does it mean? What are users' needs? What are the roles of EFRAG and the IFRS Foundation?)
• Mechanisms for connectivity and the roles of financial reporting versus sustainability reporting (How does connectivity operate in practice? What is the role of the time horizons? How can technology be used to navigate and process financial and sustainability information?)
• Impact of having different types of users (What is the impact of having different types of users, particularly under a double materiality regime? Would the role of connectivity be different for different user groups?)
• Visions for connectivity for 2030 and expectations from academics.

EFRAG has now published a report summarising the discussions on its website.

The 14 recommendations contained in the framework are consistent with the global sustainability standards of the International Sustainability Standards Board (ISSB) and the impact materiality approach used by the Global Reporting Initiative (GRI) and incorporated into the new European Sustainability Reporting Standards (ESRS).

The recommended disclosures are structured around the same four pillars the TCFD recommendations are structured around:

• Governance. 
  • Describe the board’s oversight of nature-related dependencies, impacts, risks and opportunities.
  • Describe management’s role in assessing and managing nature-related dependencies, impacts, risks and opportunities.
  • Describe the organisation’s human rights policies and engagement activities, and oversight by the board and management, with respect to Indigenous Peoples, Local Communities, affected and other stakeholders, in the organisation’s assessment of, and response to, nature-related dependencies, impacts, risks and opportunities.
• Strategy. 
  • Describe the nature-related dependencies, impacts, risks and opportunities the organisation has identified over the short, medium and long term.
  • Describe the effect nature-related dependencies, impacts, risks and opportunities have had on the organisation’s business model, value chain, strategy and financial planning, as well as any transition plans or analysis in place.
  • Describe the resilience of the organisation’s strategy to nature-related risks and opportunities, taking into consideration different scenarios.
  • Disclose the locations of assets and/or activities in the organisation’s direct operations and, where possible, upstream and downstream value chain(s) that meet the criteria for priority locations.
• Risk and impact management. 
  • Describe the organisation’s processes for identifying, assessing and prioritising nature-related dependencies, impacts, risks and opportunities in its direct operations.
  • Describe the organisation’s processes for identifying, assessing and prioritising nature-related dependencies, impacts, risks and opportunities in its upstream and downstream value chain(s).
  • Describe the organisation’s processes for monitoring nature-related dependencies, impacts, risks and opportunities.
  • Describe how processes for identifying, assessing, prioritising and monitoring nature-related risks are integrated into and inform the organisation’s overall risk management processes.
• Metrics and targets. 
  • Disclose the metrics used by the organisation to assess and manage material nature-related risks and opportunities in line with its strategy and risk management process.
  • Disclose the metrics used by the organisation to assess and manage dependencies and impacts on nature.
  • Describe the targets and goals used by the organisation to manage nature-related dependencies, impacts, risks and opportunities and its performance against these.

The TNFD will now encourage and support voluntary market adoption of the recommendations. Following the example of the TCFD, the TNFD will track voluntary market adoption on an annual basis through an annual status update report beginning in 2024. The TNFD is anticipating companies to start announcing their intention to adopt the recommendations from as early as this week.

Please click for the press release and access to the TNFD recommendations on the TNFD website. In addition, see our Need to know newsletter.

The first report Climate-Related Matters: Summary of Connectivity Research provides an overview of recent third-party research into connectivity challenges between TCFD disclosures (a proxy for the disclosures required by IFRS S2) and the financial statements.

The research revealed:

• There is an overall lack of connectivity between climate-related narrative disclosures and their associated disclosures in the financial statements.
• While there has been an increase in the occurrence of climate-related disclosures the quality of disclosures remains low.
• More transparency is required regarding climate-related estimates and judgements used to prepare financial statements.

The second report A Study in Connectivity: Analysis of 2022 UK Company Annual Reports provides a deep-dive analysis from an investor’s perspective of potential connectivity challenges and includes stakeholder feedback on possible causes.

Please click to access the two reports on the UKEB website:

• Climate-Related Matters: Summary of Connectivity Research
• A Study in Connectivity: Analysis of 2022 UK Company Annual Reports