In its draft comment letter, the UKEB:

• is very supportive of the ISSB’s objective to develop standards – in the public interest – that will result in a high quality, comprehensive baseline of sustainability disclosures focused on the needs of investors and the financial markets.
• believes that the next two-year period will be crucial to establishing the credibility and success of the ISSB global baseline.
• recommends that the ISSB focuses on consolidation. This requires ensuring smooth adoption and implementation of IFRS S1 and S2 and working with the International Accounting Standards Board (IASB) to deliver standards and guidance that produce connected information.

Comments on the draft comment letter are requested by 23 July 2023.

The press release, the draft comment letter and the invitation to comment are available on the UKEB website.

The amendment 'Classification of Liabilities as Current or Non-current (Amendments to IAS 1)' provides a more general approach to the classification of liabilities under IAS 1 based on the contractual arrangements in place at the reporting date.

The amendment 'Non-current Liabilities with Covenants (Amendments to IAS 1)' clarify how conditions with which an entity must comply within twelve months after the reporting period affect the classification of a liability.

Both Amendments have an effective date of 1 January 2024, with earlier application permitted.

The UKEB's draft assessment concludes that:

• the Amendments, if applied jointly, meet the criteria of relevance, reliability, comparability and understandability required of the financial information needed for making economic decisions and assessing the stewardship of management, as required by SI 2019/685 (see Regulation 7(1)(c)); and 
• application of the Amendments is not contrary to the principle that an entity’s accounts must give a true and fair view as required by SI 2019/685 (see Regulation 7(1)(a)).

Additionally the UKEB tentatively concludes that the Amendments are likely to be conducive to the long-term public good in the UK.

Comments on the draft Endorsement Criteria Assessment are requested by 8 June 2023.

For more information, see the Invitation to Comment and draft Endorsement Criteria Assessment on the UKEB's website.

The Amendments provide a mandatory temporary exception, applicable immediately and retrospectively, from deferred tax accounting in relation to Pillar Two top-up taxes. Entities must disclose that they have applied that exception. There are also additional disclosure requirements which are applicable for annual periods beginning on or after 1 January 2023.

The UKEB's draft assessment concludes that:

• the Amendments meet the criteria of relevance, reliability, comparability and understandability required of the financial information needed for making economic decisions and assessing the stewardship of management, as required by SI 2019/685 (see Regulation 7(1)(c)); and
• application of the Amendments is not contrary to the principle that an entity’s accounts must give a true and fair view as required by SI 2019/685 (see Regulation 7(1)(a)).

Additionally the UKEB tentatively concludes that the Amendments are likely to be conducive to the long-term public good in the UK.

Comments on the draft Endorsement Criteria Assessment are requested by 10 July 2023.

For more information, see the Invitation to Comment and draft Endorsement Criteria Assessment on the UKEB's website.

The responses will contribute to the UKEB's response to the International Accounting Standards Board's (IASB's) forthcoming request for information on IFRS 15.

Further details are available on the UKEB website.

Below is an analysis of all changes made to the work plan since our last analysis on 2 May 2023.

Stan­dard-set­ting projects

• Amendments to climate-related SASB standards — A newly added project regarding consequential amendments to the climate-related SASB standards to align them with IFRS S2; the consequential amendments are expected to be published together with IFRS S2 in June 2023.
• Business Combinations — Disclosures, Goodwill and Impairment — An exposure draft is expected in H1 2024 (previously no date given).
• Disclosure Initiative — Subsidiaries without Public Accountability: Disclosures — The IFRS Accounting Standard is expected in 2024 (previously no date given).
• Dynamic Risk Management — An exposure draft is expected in 2025 (previously no date given).
• Equity Method — An exposure draft is expected in 2024 (previously no date given).
• Financial Instruments with Characteristics of Equity — An exposure draft is expected in H2 2023 (previously no date given).
• International applicability of the SASB standards — Feedback on the exposure draft published in May 2023 is expected to be discussed in Q3 2023.
• Management Commentary — A decision on the direction of the project is expected in H2 2023 (previously no date given).
• Primary Financial Statements — The IFRS Accounting Standard is now expected in 2024 (previously no date given).
• Rate-regulated Activities — The IFRS Accounting Standard is now expected in 2025 (previously no date given).

Main­te­nance projects

• Amend­ments to the IFRS for SMEs Accounting Standard — International Tax Reform — Pillar Two Model Rules — Feedback on the exposure draft published in June 2023 is expected to be discussed in Q3 2023.
• Annual Im­prove­ments to IFRS Accounting Standards — These projects have been added to the work plan with an exposure draft expected in Q3 2023:
  • Disclosure of Deferred Difference between Fair Value and Transaction Price (Amendments to Illustrative Guidance accompanying IFRS 7) 
  • Lessee Derecognition of Lease Liabilities (Amendments to IFRS 9)

• Climate-related Risks in the Financial Statements — Review of the research is now expected in Q3 2023 (previously H2 2023).
• International Tax Reform — Pillar Two Model Rules — Project removed from work plan with the issuance of the IFRS Accounting Standard.
• Lack of Exchangeability (Amendments to IAS 21) — An IFRS Accounting Standard amendment is now expected in Q3 2023 (previously July 2023).
• Provisions — Targeted Improvements — A decision on the direction of the project is expected in H2 2023 (previously no date given).
• Supplier Finance Arrangements — Project removed from work plan with the issuance of the IFRS Accounting Standard amendment.

Research projects

• Business Combinations under Common Control — The decision on the direction of this project is expected in Q3 2023 (previously no date given).
• Extractive Activities — The decision on the direction on this project is expected in Q3 2023 (previously July 2023).
• Post-im­ple­men­ta­tion Review of IFRS 9: Impairment — Feedback on the request for in­for­ma­tion published in May 2023 is expected to be discussed in H2 2023.

Strategy and Governance projects

• ISSB Consultation on Agenda Priorities — Feedback on the request for in­for­ma­tion published in May 2023 is expected to be discussed in H2 2023.

Other projects

• IFRS Accounting Taxonomy Update — Amendments to IAS 12, IAS 21, IAS 7 and IFRS 7 — A proposed IFRS Taxonomy update is now expected in Q3 2023 (previously H2 2023).
• IFRS Accounting Taxonomy Update — Primary Financial Statements — This project has been added to the work plan with a proposed IFRS Taxonomy update expected in 2024.
• IFRS Sustainability Disclosure Taxonomy — A proposed IFRS Sustainability Disclosure Taxonomy is now expected in Q3 2023 (previously H2 2023).

The above is a faithful com­par­i­son of the IASB and ISSB work plan at 2 May 2023 and 1 June 2023. For access to the current work plan at any time, please click here.

Below is an analysis of all changes made to the work plan since our last analysis on 1 June 2023.

Standard-setting projects

• Climate-related disclosures — This project has been removed from the work plan since the ISSB issued IFRS S2 Climate-related Disclosures on 26 June 2023.
• Financial instruments with characteristics of equity — An exposure draft is now expected in Q4 2023 (previously H2 2023).
• General requirements — This project has been removed from the work plan since the ISSB issued IFRS S1 General Requirements for Disclosure of Sustainability-Related Financial Information on 26 June 2023.
• Second comprehensive review of the IFRS for SMEs — At its June 2023 meeting, the IASB decided to develop an IFRS Accounting Standard as next step in this project (expected in 2025).

Maintenance projects

• Amendments to the IFRS for SMEs Accounting Standard — International Tax Reform — Pillar Two Model Rules — Feedback on the exposure draft is now expected to be discussed in August 2023 (previously Q3 2023).
• Lack of Exchangeability (Amendments to IAS 21) — An IFRS Accounting Standard amendment is now expected in August 2023 (previously Q3 2023).

Research projects

• Post-implementation Review of IFRS 9: Impairment — Feedback on the request for information published in May 2023 is now expected to be discussed in Q4 2023 (previously H2 2023).

Other projects

• IFRS Accounting Taxonomy Update — Common Practice (Financial Instruments) and General Improvements — This project has been added to the work plan with a proposed IFRS Taxonomy update expected in Q4 2023.

The above is a faithful comparison of the IASB and ISSB work plan at 1 June 2023 and 27 June 2023. For access to the current work plan at any time, please click here.

We acknowledge that the draft Standard has addressed the specific recommendation arising from the Competition & Markets Authority’s inquiry.  Additionally we:

• Suggest amending the title of the Standard to make clear that it is only covering the audit committee’s role in relation to audit tendering and oversight of the audit process.
• Encourage the FRC to include information on how enforcement of the standard will take place by the FRC.
• Encourage the FRC to include more guidance on how audit committees are likely to be judged by the FRC and, if audit quality is the key objective, how the audit committee can be put in an informed position to be able to assess this.
• Believe that there should be more emphasis in the ‘Oversight of Auditors and Audit’ section on what the audit committee needs to do to encourage robust and effective systems and the provision of high-quality information for the auditor to audit, i.e. the role of
  management.

Our full comment letter is available here.

This collaboration builds upon the Forum’s Stakeholder Metrics initiative and previous work with the IFRS Foundation. To formalize the partnership, a Memorandum of Understanding (MoU) was signed between the WEF, ISSB, and the IFRS Foundation.

The Preparers Group, consisting of up to 20 senior preparers of corporate reporting, will provide feedback and insights on the feasibility, practicability, and potential need for further guidance regarding the ISSB Standards. The focus will be on building capacity among companies to ensure widespread and high-quality adoption of these standards.

For more information, see the press release on the WEF’s website.