Trustees meeting

Meeting ac­tiv­i­ties included the following:

• Reports of the Chair of the Trustees and the Managing Director
• Report of the Chair of the IASB
• Presentation by Jean-Paul Servais, Chair, IOSCO
• Report of the Chair of the ISSB
• IASB Strategy — Generation 3
• Strategic Direction Considerations for the ISSB
• ISSB Funding Update
• Trustee Strategic Engagement
• Report of the Chair of the Advisory Council
• Integrated Reporting and Connectivity Council
• Vision for Corporate Reporting
• Reports from recent Trustee Committee meetings
• Stakeholder engagement
• Meeting with the Monitoring Board
• Farewell for departing Managing Director

DPOC meeting

Meeting ac­tiv­i­ties included the following:

• IASB-re­lated matters
  • Update on IASB technical ac­tiv­i­ties
  • Subsidiaries without Public Accountability: Disclosures Due process ‘lifecycle’ review
• ISSB-re­lated matters
  • Update on ISSB technical ac­tiv­i­ties
  • Material to support the application of ISSB Standards — Update
• Composition of the IFRS Taxonomy Consultative Group
• Cor­re­spon­dence

For more in­for­ma­tion, see the summary of both meetings on the IFRS Foun­da­tion’s website.

IFRS 18 was issued in April 2024, and is effective for annual reporting periods beginning on or after 1 January 2027.

The webcast which is a discussion between UKEB Technical Director Seema Jamil-O’Neill and International Accounting Standards Board (IASB) Member Nick Anderson covers:

• requirements for new categories and subtotals in the income statement;
• management-defined performance measures;
• aggregation and disaggregation of information; and
• limited changes to the statement of cash flows.

The webcast is available on the UKEB website.

According to the press release, the document, which is also referred to as “educational material”, has been designed to reduce complexity, fragmentation and duplication for entities applying both the ISSB standards and ESRS.

The guidance contains the following sections:

• Section 1 discusses the general reporting requirements in the ISSB standards and ESRS and explains the extent to which the standards are compatible with each other in terms of materiality, presentation and disclosures on non-climate-related sustainability topics.
• Section 2 provides a paragraph-by-paragraph analysis of the climate-related disclosure requirements of the ISSB standards and the ESRS in a tabular format.
• Section 3 lists reporting elements and areas for which ESRS preparers may need to provide additional disclosures in order to comply with the climate-related disclosure requirements in the ISSB standards.
• Section 4 lists reporting elements and areas for which IFRS preparers may need to provide additional disclosures in order to comply with the climate-related disclosure requirements in ESRS.

For more information, including access to the guidance, please see the press release on the IFRS Foundation website.

Note: On 23 May 2024, the ISSB and EFRAG will hold a joint event (in Brussels and online) on the guidance. Please click here for more information on the event on the EFRAG website.

The pronouncement includes minor improvements sourced from recent IFRS improvements and narrow scope projects. 

Please click for more information and access to finalised pronouncement on the IPSASB website.

In its draft comment letter, EFRAG welcomes the IASB's efforts in trying to achieve the right balance to improve the disclosure requirements in IFRS 3 and goodwill impairment test in IAS 36 at a reasonable cost to preparers.

However, EFRAG still has significant concerns and is seeking additional input from constituents on:

• specific aspects of the package of new disclosures;
• the proposal to provide quantitative information on expected synergies; and
• whether the IASB should deal with existing tax issues, including the treatment of deferred taxes.

Comments on EFRAG's draft comment letter are requested by 28 June 2024. For more information, see the press release and the draft comment letter on the EFRAG website.

The topics covered during the meeting were the following (numbers in brackets are ref­er­ences to the cor­re­spond­ing para­graphs of the summary):

• Agenda planning and feedback from previous ASAF meeting (1-2): The ASAF members discussed topics for its next meeting to be held on 8–9 July 2024 and will include dis­cus­sions on Business Combinations — Disclosures, Goodwill and Impairment; Provisions — Targeted Improvements; Pollutant Pricing Mechanisms; and Intangible assets.
• Disclosure Initiative-Subsidiaries without Public Accountability: Disclosures (3–6): The ASAF were provided with a overview of the forthcoming IFRS Accounting Standard IFRS 19 and were updated on the IASB’s next steps after issuing the Subsidiaries Standard.
• Rate-regulated Activities (7–15): The purpose of the session was to update ASAF members on the redeliberations of the Exposure Draft Regulatory Assets and Regulatory Liabilities and provide comments on tentative decisions reached in Q3 and Q4 2023.
• Post-implementation Review of IFRS 9 — Impairment (16–28): The purpose of the session was to provide an overview of feedback on the post-implementation review of impairment requirements in IFRS 9 and the ASAF provided comments on the general approach to recognizing expected credit losses and determining significant increases in credit risk. In addition, the members provided views on the prevalence and significance in ASAF members’ jurisdictions of some application matters raised during the PIR.
• Amendments to the Classification and Measurement of Financial Instruments (29–37): The purpose of the session was to summarise the IASB’s tentative decisions responding to feedback on the Exposure Draft Amendments to the Classification and Measurement of Financial Instruments (the Exposure Draft). ASAF members were asked for their initial views on the IASB's tentative decisions.
• Post-implementation Review of IFRS 15 — Revenue from Contracts with Customers (38–46): The purpose of this session was to update members on the Post-implementation Review of IFRS 15 project and seek members’ views on the matters discussed by the IASB in January– March 2024.
• Climate-related and Other Uncertainties in the Financial Statements (47–55): The purpose of this session is to provide the ASAF members with an update on the project and discuss topics discussed at the IASB’s March 2024 meeting.
• EFRAG’s project on Variable Consideration (56–57): A summary of feedback received on the EFRAG’s Discussion Paper Accounting for variable consideration — From a purchaser’s perspective was presented.
• Financial Instruments with Characteristics of Equity (58–63): A summary of results of the EFRAG’s survey on the Exposure Draft Financial Instruments with Characteristics of Equity.

A full summary of the meeting is available on the IFRS Foun­da­tion website.

This com­pi­la­tion includes three agenda decision:

• Payments Contingent on Continued Employment during Handover Periods (IFRS 3 Business Combinations);
• Merger between a Parent and Its Subsidiary in Separate Financial Statements (IAS 27 Separate Financial Statements); and
• Climate-related Commitments (IAS 37 Provisions, Contingent Liabilities and Contingent Assets).

For more in­for­ma­tion, see the press release and com­pi­la­tion on the IFRS Foundation website.

The following webinars are scheduled:

• Subtotals and categories in the statement of profit or loss — This webinar will cover the introduction of three defined categories for income and expenses under IFRS 18 (operating, investing, and financing). Participants will gain insights into the improved structure of income statements and the requirement to provide new defined subtotals, including operating profit. This webinar will have two sessions held on 16 May (Morning: 9:30am—10:30am BST and Afternoon: 15:30–16:30 BST).
• Management-defined performance measures — This webinar will discuss the IFRS 18 requirement for companies to disclose explanations of company-specific measures related to the income statement, referred to as management-defined performance measures. This webinar will have two sessions held on 30 May (Morning: 9:30am—10:30am BST and Afternoon: 15:30–16:30 BST).
• Grouping of information in the financial statements — This webinar will explore enhanced guidance on organising information in financial statements and deciding whether to provide it in the primary financial statements or in the notes. This webinar will have two sessions held on 6 June (Morning: 9:30am—10:30am BST and Afternoon: 15:30–16:30 BST).

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

Since 1 October 2021, new regulations came into effect for trustees to improve the quality of governance and reporting with respect to climate change risks and opportunities for Occupational pension schemes.  The regulations require trustees to identify, assess, and manage climate-related risks and opportunities and report on what they have done.  

The TPR review was based on 30 reports with scheme year-end dates between 1 October 2022 and 30 September 2023 covering defined benefit, hybrid, single-employer DC schemes and a DC master trust.  The review considered:

• quality and consistency of reporting against the Climate and Governance Regulations and the Department for Work and Pension's (DWP's) statutory guidance.
• whether trustees had considered the issues TPR raised in its 2023 statement on climate-related disclosures.
• how well trustees understood the range of climate-related risks and opportunities for their scheme, and explained the results of their analysis.
• how trustees intend to address the risks and opportunities they have identified, proportionate to the scheme's circumstances and other risk exposures.

The key observations from the reports reviewed which the TPR expects trustees to consider were:

• Context.  Information, such as scheme size, structure of DB sections, DC popular default funds and funding level is most helpful when reported early in the report to help put the rest of the report into context for readers.
• Materiality.  Where reports refer to specific investment mandates, it is helpful to explain their size in relation to total scheme assets to help the reader understand the materiality of the issue.
• Generic wording.  A number of the reports reviewed contained generic wording.  The quality of reports can be improved by including specifics on policies, steps to manage risks and information received from advisers.
• Developments between reports.  Some trustees reporting in the second year of reporting reused some parts of the previous report.  TPR indicates that this is a sensible way of producing the report provided any legal requirements continue to be met.  However, where trustees take this approach, TPR expects them to supplement these elements with a summary of developments and activities during the year.
• Length.  A longer report does not correlate to better quality with better reports demonstrating how disclosure requirements had been addressed in a concise way.  
• Member summaries.  Some reports had excellent plain English summaries and that format allowed the remainder of the report to be written with a more informed/technical reader in mind.
• Action plans.  Where trustees have used the reporting process to identify additional work that needs to be carried out, they should set a plan for this, monitor progress and update on progress in their next report.

The review also found examples of trustee action on climate risk including:

• updating defined contribution default lifestyle strategies to include sustainable funds.
• increasing allocation to low carbon tracker funds. and/or to companies with 'high levels of green revenue'.
• exploring opportunities such as forestry, green bonds and/or committing funds to private market renewables.
• encouraging fund managers to engage with top carbon dioxide emitters.

In addition to the high level observations, the review also sets out specific findings in the areas of Governance, Strategy, Scenario analysis, Risk Management and Metrics and Targets with examples of better practice, areas of perceived weakness and ways to improve future reports.

The press release and the review can be found on the TPR website. 

The podcast high­lights some of the projects that were discussed during the meeting, including:

• Start of a thorough review concerning intangible assets
• Developments within the climate-related and other uncertainties in the financial statements project
• Finalisation of the agenda decision pertaining to net-zero commitments
• Insights into the ongoing post-implementation reviews of IFRS 15 and IFRS 9

The podcast can be accessed here on the IFRS Foun­da­tion website.