Highlights of the podcast include discussions on: 

• an update on the agenda consultation and developments in the project on financial instruments with characteristics of equity;
• decisions as a result of the post-implementation review of IFRS 10-12 and in the development of the IFRS for SMEs exposure draft;
• deliberations in the projects on primary financial statements and rate-regulated activities; and
• feedback on the projects on dynamic risk management and the targeted standards level review of disclosures.

The podcast can be accessed through the press release on the IASB website.

Please click to view the detailed notes taken by Deloitte observers for the IASB meeting.

The memoranda of understanding formalise the partnerships and funding arrangements required to establish the ISSB in Frankfurt. While the ISSB will have a global, multi-location presence, the Frankfurt office will provide the seat of the Board and the office of the ISSB Chair. The office will provide key support functions for the ISSB, including the hosting of board meetings, and will act as a hub for the Europe, Middle East and Africa region.

Please click for additional information in the press release on the IFRS Foundation website.

In general EFRAG agrees with the proposed objective of the proposals.  EFRAG:

• whilst acknowledging that there are potential benefits of broadening the scope of the proposals, notes that any decision in this regard is likely to be a challenge and controversial especially as there is no consensus on whether and to what extent the scope should be widened.  As a result EFRAG believes that the IASB should proceed with the scope as is and that the final Standard should be available to subsidiaries on an optional basis.   
• recommends that before the issuance of a new IFRS Standard on reduced disclosures, the IASB clarifies the concept of holding assets in a fiduciary capacity (as insurers, for example, do not in general regard themselves as holding assets in a fiduciary capacity) and, therefore, explores the applicability of the Exposure Draft to the insurance sector.
• recommends the IASB should, in parallel to the finalisation of this project, assess the possibility of extending the proposed benefits to other type of entities (associates, joint ventures, joint operations, non-listed banks that are subsidiaries, separate financial statements of ultimate parent entities and all entities without public accountability).
• highlights that the IASB's proposals in this project are likely to put pressure on the definition of 'available for public use' and 'public accountability' and welcomes further application guidance in this area.

In addition, EFRAG raises some concerns and provides suggestions on the IASB's approach for developing the draft Standard, the proposed structure of the draft Standard, the proposed list of disclosure requirements (including not reducing the disclosure requirements for IFRS 17 Insurance Contracts) and some other topics.

A press release, the final comment letter, the summary of the inputs received from preparers and a briefing prepared by the EFRAG Secretariat focused on the compatibility of the Accounting Directive 2013/34/EU with the IASB's ED are available on the EFRAG website.

The new platform provides a central access point to resources helpful for governments and other public sector entities planning and undertaking a transition from cash to accrual accounting including adopting and implementing International Public Sector Accounting Standards (IPSAS).  

Please click for more information on the IFAC website.

The full agenda for the meeting is summarised below.

The research team focused on those companies required to report under The Companies (Miscellaneous Reporting) Regulations 2018, which capture individual companies that meet the criteria of having 2,000 employees, and / or a turnover of more than £200 million and a balance sheet of more than £2 billion. The report considers that there is room for improvement, in particular by increasing disclosure of how policies are applied in practice.

The research team identified 796 companies that discussed their corporate governance arrangements in the annual report. Of these, 454 (57%) had applied a corporate governance code and 348 (44%) were determined to have followed the Wates Principles.

For each of the Wates Principles reporters, the research team evaluated the cross-referencing to other parts of the Annual Report such as the s172(1) statement, the readability of the report, and how clear and informative the disclosure was under each of the six Principles. The report includes examples of disclosure that successfully answer recommendations of the Wates Principles. The research team found that companies did not always explain each of the Principles, with the proportion of companies including some disclosure in regard to each Principle as follows:

• Principle 1 – Purpose and Leadership – 88%
• Principle 2 – Board Composition – 91%
• Principle 3 – Director Responsibilities – 96%
• Principle 4 – Opportunity and Risk – 93%
• Principle 5 – Remuneration – 90%
• Principle 6 – Stakeholder Relationships and Engagement – 95%

For each Principle the research team found that there was a low level of companies meeting all the granular disclosure elements recommended by the Wates Principles, with average disclosure scores less than 50%. The report includes three key recommendations for companies:

• Disclose more detailed information in relation to the application of the six Principles to provide readers with a comprehensive understanding of the corporate governance arrangements in place and how these are mapped to the respective Principles;
• Discuss more instances and/or circumstances relating to a given corporate governance practice to evidence how they have applied the Principles;
• Use more cross-references, as in several cases the disclosure of some items could be found in other sections of the annual reports, but these were difficult to track down without the provision of cross-references.

The press release and report are available on the FRC website. 

Mr Mackenzie, who is an IASB Board member and before that served six years as a member of the IFRS Interpretations Committee, follows Sue Lloyd who has been appointed Vice Chair of the newly formed the International Sustainability Standards Board (ISSB).

Please click for more information in the press release on the IFRS Foundation website.

The proposal establishes a corporate sustainability due diligence duty to address negative human rights and environmental impacts by identifying, preventing, mitigating, monitoring and communicating on potential or actual adverse impacts, as well as bringing actual adverse impacts to an end where possible or taking action to neutralise or minimise impacts including through paying damages.

The proposed new rules apply to:

• All EU limited liability companies with 500 or more employees and a net turnover over €150 million worldwide (‘group 1’).
• Other EU limited liability companies operating in defined high impact sectors with over 250 employees and a net turnover over €40 million worldwide (‘group 2’).  The sectors are:
  • the manufacture of textiles, leather and related products (including footwear), and the wholesale trade of textiles, clothing and footwear;
  • agriculture, forestry, fisheries (including aquaculture), the manufacture of food products, and the wholesale trade of agricultural raw materials, live animals, wood, food, and beverages; and
  • the extraction of mineral resources regardless from where they are extracted (including crude petroleum, natural gas, coal, lignite, metals and metal ores, as well as all other, non-metallic minerals and quarry products), the manufacture of basic metal products, other non-metallic mineral products and fabricated metal products (except machinery and equipment), and the wholesale trade of mineral resources, basic and intermediate mineral products (including metals and metal ores, construction materials, fuels, chemicals and other intermediate products).
• Non-EU companies active in the EU with turnover thresholds and activities aligned with groups 1 and 2, generated in the EU.

The proposal applies to the company's own operations, their subsidiaries and their value chains (direct and indirect established business relationships).  

The proposal requires companies to:

• integrate due diligence into company policies;
• identify actual or potential adverse human rights and environmental impacts;
• prevent or mitigate potential impacts; and bring to an end or minimise actual adverse impacts;
• establish and maintain a complaints procedure;
• monitor the effectiveness of the due diligence policy and measures; and
• publicly report on due diligence via an annual statement on company websites (for those companies not already subject to the reporting requirements of the Non-Financial Reporting Directive (NFRD) and the future Corporate Sustainability Reporting Directive (CSRD)). The Commission will also adopt delegated acts to determine additional rules on the content and criteria of such reporting.

In addition, the new proposal requires group 1 companies (both EU and non-EU) to adopt a plan to ensure that their business strategy is compatible with limiting global warming to 1.5 °C in line with the Paris Agreement and to take this into account when setting variable Director remuneration if this is linked to contribution to the company's business strategy and long-term interests and sustainability.

Timing and next steps:

• The proposed directive needs to be adopted by both the Council and the European Parliament (EP) and then implemented in the 27 Member States. The EP is expected to begin its discussions soon
• The new rules will then apply to group 1 (EU and non-EU) companies from the date of implementation of the directive (at least two years after the entry into force) and to group 2 (EU and non-EU) two years after the date of implementation of the directive

The press release, the proposal and the associated annex are available on the European Commission website.

The SMEIG discussed the following topics related to the second comprehensive review of the IFRS for SMEs Standard:

• Definition of a business and reacquired rights in IFRS 3 Business Combinations.
• Simplifications to IFRS 15 Revenue from Contracts with Customers.
• Cryptocurrency.
• Recognition and measurement of development costs.
• Update on recent IASB decisions.

View the report is available on the IFRS Foundation website.

The full agenda for the meeting is sum­marised below:

Agenda papers for this meeting are available on the IFRS Foundation’s website.