The ISSB will discuss the following:

• An investor perspective on the ISSB’s work plan
• Enhancing the SASB Standards
• Biodiversity, ecosystems and ecosystem services and human capital

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 Board will discuss the following:

• Cash flows and related matters
• Addendum to the Exposure Draft Third edition of the IFRS for SMEs Accounting Standard
• Amortised Cost Measured
• Dynamic Risk Management
• Power Purchase Agreements
• Management Commentary

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.

Members will discuss the initial membership of the IFRS Sustainability Reference Group (SRG). Please see the agenda and meeting paper on the IFRS Foundation website.

A summary of the agenda is set out below:

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

The thematic review summarises the key findings from the Corporate Reporting Review (CRR) team’s review of disclosures in companies’ first annual reports and accounts following their adoption of IFRS 17. It is a follow-up to the FRC’s report published in November 2023 which considered the disclosures made in 2023 interim accounts relating to the implementation of IFRS 17.

The FRC noted that the overall quality of disclosure of insurance contracts under IFRS 17, including transition-specific disclosures, in the FRC’s sample was good.

The thematic review showed that while some further areas for improvement were identified, many of these related to areas commonly raised with companies, such as judgements and estimates, and alternative performance measures.

Some of the other key observations from the thematic review are:

• The FRC was pleased that most companies avoided disclosing insignificant information. It expects companies to consider the appropriate level of disaggregation for disclosures of insurance contracts and provide appropriately disaggregated qualitative and quantitative information to allow users to understand the financial effects of material portfolios of insurance (and reinsurance) contracts.
• The FRC identified a number of areas, such as disclosures relating to insurance finance income or expense, and risks relating to insurance contracts, where disclosures were not always provided in a way that met the requirements of the standard. The FRC reminds companies that disclosures of significant judgements and estimates, and accounting policies, are more useful when they are entity specific.
• While the FRC noted that most of the insurance companies in its sample clearly explained the impact of IFRS 17 on their Alternative Performance Measures (APMs), it also identified a number of areas for improvement consistent with the findings from its previous thematic reviews of APMs, including commonly used measures such as premium metrics, and claims and expense ratios.

As IFRS 17 is a new accounting standard, with a significant impact on the insurance sector, the FRC expects that practice will continue to develop and improve over time.

The press release and the full publication are available on the FRC website. 

The FRC’s report on offsetting reflects the Corporate Reporting Review (CRR) team’s experience in relation to offsetting in annual reports and accounts over recent years and focuses on the requirements for offsetting in areas where the CRR found more frequent application issues.

The FRC notes that although the requirements for offsetting are reasonably well established, it regularly identifies material errors in this area, even in fairly straightforward scenarios.

In the thematic, the FRC reminds companies that:

• Cash flows should be presented gross, unless otherwise required or permitted. The FRC also clarifies that the accounting requirements for including overdrafts within cash and cash equivalents in the cash flow statement differ significantly from those relating to the offset of overdrafts and cash and cash equivalents in the statement of financial position.
• Bank overdrafts and positive bank balances that form part of a cash pooling arrangement are offset in the statement of financial position only when there is an intention to exercise a legally enforceable right to set off period-end bank balances. The FRC emphasises that the existence of this right, in itself, is insufficient for offsetting conditions in IAS 32 Financial Instruments: Presentation to be met and that the second part of the offset criteria relates to an intention to exercise this right. 
• High quality disclosures are important where financial instruments have been offset or are subject to a master netting arrangement or similar agreement. Companies should disclose material accounting policy information relating to offsetting as well as any significant judgements made by management in applying these policies.
• A reimbursement asset is required to be separately presented from the associated provision. Further, any reimbursement rights that satisfy the contingent asset requirements of IAS 37 Provisions, Contingent Liabilities and Contingent Assets should be appropriately disclosed.

The thematic review also provides observations related to offsetting in other areas including, but not limited to, deferred taxes, revenue from contracts with customers, refund liabilities and right of return assets, employee benefits and non-current assets held for sale and discontinued operations.

The report also clarifies that while IAS 34 Interim Financial Reporting does not contain explicit requirements for disclosures on offsetting, it does require an entity to include in its interim report an explanation of events and transactions that are significant to an understanding of the changes in financial position and performance since the end of the last annual reporting period which may include disclosures on offsetting when it was not applied previously.

The press release and the full publication are available on the FRC website. 

Guarantees issued on obligations of other entities: The IFRS IC received a submission about how an entity, in its separate financial statements, accounts for guarantees that it issues on obligations of its joint venture in certain fact patterns. As the fact patterns submitted are highly specific and subtle differences in the specific facts and circumstances could change the conclusion, the staff considers that it would be inappropriate for the IFRS IC to conclude on the matter. Instead, the staff recommends that the IFRS IC publish a tentative agenda decision identifying the IFRS Accounting Standards an entity considers in accounting for guarantees that it issues.

IFRS 15 — recognition of revenues from tuition fees: The IFRS IC received a submission about the period over which an entity that provides educational services recognises revenue from tuition fees when applying IFRS 15. The staff concluded that there is no evidence of diversity in how those educational institutions recognise revenue from tuition fees and recommends that the IFRS IC publish a tentative agenda decision explaining the reasons for not adding this matter to its agenda.

IFRS IC input into IASB projects:

• Pollutant pricing mechanisms: The purpose of the session is to obtain IFRS IC members’ input on the prevalence and significance of pollutant pricing mechanisms, and whether IFRS IC members have observed deficiencies in the accounting for these mechanisms. This information will contribute to the IASB’s horizon scanning activities and helping the IASB make an informed decision on whether to prioritise a project on the topic.
• Post-implementation review (PIR) of IFRS 16: The purpose of this session is to seek IFRS IC members’ views on the implementation and ongoing application of IFRS 16 and to identify matters to include in the forthcoming request for information (RFI) for public consultation.

The full agenda for the meeting and our com­pre­hen­sive pre-meet­ing summaries can be found here.

A summary of the agenda is set out below:

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

Mr Liikanen explained once more why the ISSB was founded as a sister board to the IASB and then stressed the need to now work with other bodies to achieve global interoperability. He also noted that the two IFRS Foundation boards, the IASB and the ISSB, and their work complement each other.

Mr Barckow explained that at last year's exchange of views, the IASB had been working on 25 different projects, a number which has now been brought down to 17. He especially noted the issuance of IFRS 18, which brings increased global comparability of the presentation and disclosure in financial statements, and IFRS 19, which is a response to the calls to not only always increase the amount of IFRS literature, but also to reduce it where possible. He also noted the IASB's project on contracts for renewable energy and its close ties to the European Green Deal.

Mr Faber expanded on the recent achievements on interoperability citing the EFRAG/ISSB guidance released in May and also noted the progress in international adoption of the ISSB standards. He also pointed out the digital taxonomies that will help switching back and forth between the different frameworks. 

Questions from the Parliamentarians in attendance covered the following topics:

• SME reporting. Mr Faber explained that the ISSB standards are not focused on SMEs, but they are included in the value chain. Therefore, SMEs are very much the focus of the capacity building the ISSB is supporting. 
• Interoperability. Mr Faber once again noted the ongoing exchange with EFRAG, but also said that while the EU was one of the first players on the field, others are now joining the race. He noted that wile the close exchange with the EU would continue, the ISSB could not work bilaterally with every jurisdiction around the world. He concluded that now was the time to start building on the global baseline the ISSB has provided.
• Audit. Mr Liikanen noted that audit is a very important factor of reporting. He pointed out that a new IAASB standard will be issued this autumn that will also cover sustainability disclosures. He noted that markets not only work through proper disclosure but also through the ability to compare them.
• Proactive standard setting. Mr Barckow responded to a claim that standard setting always seemed to follow major crises and would it not be better if standards were set before the crises came along. He wholeheartedly agreed with the statement and pointed at the new horizon-scanning programme the IASB has set up. However, given that the world is developing ever faster, he also noted the IASB's agility in responding to upcoming concerns. He also mentioned positive and negative trends: intangibles, where the IASB has recently activated a project, and crypto currencies, which are hyped, but where no company reporting under IFRS has so far any material amount of crypto currencies on their balance sheet.
• Double materiality. Mr Faber noted once again the character of the ISSB global baseline. While the ISSB standards do not include double materiality, a multi-stakeholder perspective can always be build on top of them.

A recording of the session is available on the website of the European Parliament. The exchange of views begins at 16:23 hrs. Please note that the audio options include translations into twelve languages. The presentation slides used by the speakers are also available on the website of the Parliament. 

In addition, EFRAG has published the XBRL Taxonomy for information required under Article 8 on how and to what extent an entity's activities are associated with taxonomy-aligned economic activities. 

The taxonomy on ESRSs and Article 8 information will form the basis for the European Securities and Market Authority (ESMA) to develop Regulatory Technical Standards for tagging the sustainability statement prepared under ESRSs.

More information is available in the press release on the EFRAG website.