While we agree with the Board that there is insufficient guidance in IAS 8 for those that apply IFRS to distinguish between changes in accounting policies and changes in accounting estimates, our assessment is that the proposed changes will not provide the clarity that stakeholders need to distinguish between a change in estimate and a change in accounting policy to the extent expected.

Please download the full comment letter here.

There are six topics on the agenda.

Wednesday 24 January

The meeting starts with a continuation of the discussion on Primary Financial Statements. There are two topics, the presentation of management performance measures and the presentation of the results of associates and joint ventures.  The staff have recommendations for when a management performance measure should be required, where the reconciliation between the measure and an IFRS-defined measure should be located, what constraints should be placed on the measure, additional disclosure requirements when such a measure is presented and the interaction with segment profit or loss and existing regulatory requirements for non-IFRS measures. In relation to associates and joint ventures, the staff are recommending that entities be required to present the results of ‘integral’ associates and joint ventures separately from ‘non-integral’ associates and joint ventures.

The Board will consider the appropriate accounting for non-derivative instruments with equity hosts with complex payoffs. This type of instruments has not been discussed by the Board before and was identified during the review of a pre-ballot draft of the Financial Instruments with Characteristics of Equity Discussion Paper. The instruments under consideration give rise to claims against the entity that are limited to the entity’s available economic resource, but the claims are also affected by other variables such as a commodity index.  The Board will consider whether the embedded derivative should be accounted for separately, deeply out of the money options should be excluded from the classification assessment or requiring information through attributing particular income and expenses to specific classes of equity.

Thursday 25 January

The staff will give the Board an update on the Conceptual Framework project. The final document is expected to be published in March 2018.

The Board will continue its discussions on accounting for Goodwill. The staff are recommending that the Board remove the requirement in IAS 36 to use pre-tax inputs when calculating value in use. They are also recommending that the Board remove the requirement in IAS 36 to exclude cash flows relating to uncommitted future restructurings and asset enhancements when calculating value in use.

The Board will consider two IFRS Implementation Issues referred to the Board by the IFRS Interpretations Committee. The first is a possible research project on commodity loans and related transactions. The second is a recommended annual improvement to remove the requirement in IAS 41 to use pre-tax cash flows when fair valuing a biological asset.

The Board will start considering the feedback from its Post-implementation review of IFRS 13 Fair Value Measurement. The papers provide a review of academic literature, feedback from the request for information and a summary of other research conducted by the staff.  This is an education session, so there are no questions for the Board.

More information

Our pre-meeting summaries are available on our January meeting note page and will be supplemented with our popular meeting notes after the meeting.

The Board will discuss the following:

• Primary financial statements
• Financial instruments with characteristics of equity
• Conceptual Framework
• IFRS implementation issues
• Goodwill and impairment
• Post-implementation review of IFRS 13 Fair Value Measurement

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.

An agenda and details on how to register for the meeting can be found on the EFRAG website.

The letter includes:

• The objective of transition disclosures about ECL
• When and where the transition disclosures will be published
• The content of the minimum transition disclosure

The full letter is available on the PRA website.

This Taxonomy update includes elements to reflect the new presentation and disclosure requirements introduced by the recently-issued standard IFRS 17 Insurance Contracts.

For more information, see the press release and Taxonomy update on the IASB’s website.

The IPSASB also notes that the deadline for comments on the consultation paper is 15 January 2018.

Please click to access the video (approx. 30 minutes) on the IPSASB website.

EFRAG supports the IASB proposals; however, EFRAG recommends the development of some more illustrative examples in order to further clarify the distinction between an accounting policy and an accounting estimate.

EFRAG also:

• Agrees with the proposed clarification that changes in valuation techniques and changes in estimation techniques are changes in accounting estimates.
• Recommends that the proposed guidance on selecting a cost formula for interchangeable inventories be included in IAS 2 Inventories.
• Recommends that the final amendments are delayed and then grouped with any further amendments to IAS 8 arising from the forthcoming ED on accounting policy changes to avoid making two amendments to IAS 8 in a short space of time.

The feedback statement describes the main comments received by EFRAG in response to its draft comment letter and how these comments were considered by EFRAG in finalising its final comment letter to the IASB.

The press release, full comment letter and feedback statement are available on the EFRAG website.

The Climate Disclosure Standards Board (CDSB) has published a discussion paper looking at the application of materiality to climate-related financial disclosures, highlighting the main challenges and potential strategies for materiality determination. The press release on the CDSB website offers a summary of the main topics and access to the full paper.

The Global Reporting Initiative (GRI) notes that sustainability reporting can support companies’ contribution to poverty alleviation. A new paper by GRI explains how the impact of sustainability reporting can be maximised to help reach the Sustainable Development Goal (SDG) of no poverty by 2030 and outlines recommendations and specific disclosures that companies can apply. Please click to access Corporate Reporting on Poverty on the GRI website.

The United States Sustainability Accounting Standards Board (SASB) has released its second annual State of Disclosure Report – An analysis of the effectiveness of sustainability disclosure in SEC filings 2017, which highlights both improving trends as well as opportunities for improvement. The report features SASB's analysis of the top 10 companies in each of 79 industries, by revenue, for which the independent standards-setting organisation has developed standards. Please click to access the report on the SASB website.

Chartered Professional Accountants of Canada (CPA Canada), in collaboration with the University of Toronto’s Environmental Finance Advisory Committee (EFAC), hosted an expert panel session to discuss whether blockchain as a decentralised, peer-to-peer ledger technology could transform carbon markets by providing a transparent and reliable way to track carbon emissions and credits. Please click to access a short video and a report from the session on the CPA Canada website.

ClientEarth, a non-profit environmental law organisation, has published a report that highlights the findings of the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD) and outlines how climate risk can impact the preparation of financial accounts and the potential professional indemnity risks to Auditors. While the focus of the legal analysis is on the responsibilities of auditors to consider climate-related risks during UK company audits highlights, many of the standards discussed are IFRS standards, and so may also be relevant elsewhere. Please click to access the analysis on the ClientEarth website.

The FRC published its Strategy for 2018/21 in December 2017 with a comment period until 28 February 2018.

Registration details for the meeting are available on the FRC website.