The three apparent paradoxes Mr Maijoor identified were:

• the need to ensure that reporting standards are, at the same time, international and jurisdiction-specific;
• the importance of ensuring that the disclosure standards are sufficiently robust to help prevent the risk of greenwashing, while at the same time allowing for sufficient flexibility for entities to tell their own story; and
• the difficulty of establishing a robust and extensive disclosure regime covering as many companies as possible so to ensure that information by (actual or potential) investee companies is available, while maintaining a proportionate set of requirements especially for smaller companies.

On the first paradox, he stated that he did not believe that global and EU-specific standardardisation are in contradiction, rather, he said, they would be complementary to one another. Mr Maijoor explained that to be effective, a set of international standards would need to be modular to cater for the needs of jurisdictions that are at different stages of progress in the area of sustainable finance.

On the second paradox, Mr Maijoor explained that principles-based standards are typically well-suited to support the efforts of those issuers that aim at innovating in their reporting practices, but they are also helpful in preventing the risk that non-financial reporting is merely based on a check-list approach.

And on the third paradox, he suggested that one potential way forward would be to acknowledge that the size of a company alone is an imperfect proxy of its ESG impact, but that at the same time it is a relatively good indicator of the resource constraint that a company might face if a heavy reporting burdens is imposed on it.

Mr Maijoor concluded his speech by noting:

The future of sustainability reporting depends, in my view, upon good international cooperation, robust, proportionate and principles-based reporting requirements and, most importantly, on a standard-setting process that is centred around the public interest. Like for any standard setting process, extensive and thorough consultation of all relevant stakeholders will also be essential.

Please click to access the full text of Mr Maijoor's speech on the ESMA website.

Maintenance and Consistent Application — IFRIC Update: At its December meeting the IFRS Interpretations Committee finalised an agenda decision in relation to supplier financing. At this meeting, the Board will be asked to clear that decision. If four or more Board members object, the decision will not be published. This is the first agenda decision to be subjected to the revised due process.

Disclosure Initiative — Subsidiaries that are SMEs: The IASB is developing a Standard setting out reduced disclosure requirements for subsidiaries that apply IFRS Standards, but meet the definition of an SME. At this meeting, the staff is seeking views on whether the consultation document should include proposed reduced disclosure requirements for IFRS 17; and recommend that IFRS 1 not be amended and that transition provisions are not required. The staff also recommend that if an entity stops applying the reduced disclosure Standard that the comparatives should apply full IFRS; that the reduced disclosures can be applied for the ‘first time’ more than once; and that the Standard is optional and an entity can reverse its decision to apply it.

SME Standard review and update: The IASB published Request for Information (RFI) ‘Comprehensive Review of the IFRS for SMEs Standard' in January. The IASB received 66 comment letters, mainly from accountancy bodies and standard-setting bodies. Overall, respondents expressed support for the IFRS for SMEs Standard to be based on full IFRS Standards. The paper also contains feedback on the specific questions asked in the RFI. The staff recommend that the SME Implementation Group (SMEIG) be asked to develop a set of recommendations for the Board in its review of the IFRS for SMEs Standard. The next meeting of the SMEIG is planned for February 2021.

Disclosure Initiative — Accounting Policies: The Board is amending IAS 1 and its Practice Statement on applying materiality. The staff recommend that the Board does not add transition requirements or an effective date to the amendments to the Practice Statement, as well as a small change to the wording in IAS 1:117B.

Primary Financial Statements: In December 2019, the IASB published Exposure Draft ED/2019/7 General Presentation and Disclosures. The staff have summarised feedback from the 215 comment letters it received, outreach activities, fieldwork and a review of academic literature. There are 11 papers, each summarising an aspect of the feedback. To give a flavour of the feedback, there was support for many aspects of the proposals, such as defined subtotals and categories in the statement of profit or loss and introducing a definition for unusual items. But many respondents thought additional guidance was required and most did not agree with the proposed definition of unusual items. There was broad support for the proposed roles for the primary financial statements and the notes. However, there was almost no support for separating integral and non-integral associates and joint ventures and the proposals related to management performance measures received mixed, and strongly expressed, views. The staff is not asking the Board to make any decisions but are asking for feedback and for the Board to identify areas which would require further research.

Post-implementation review of IFRS 9 — Classification and Measurement: In October 2020, the Board decided to begin the post-implementation review (PIR) of the IFRS 9 classification and measurement requirements. The staff plan to identify and assess the matters to be examined, which will then form the basis for a public Request for Information (RFI). The staff expect the PIR will take around 18-24 months to complete, with the RFI being issued in the third quarter of 2021. The staff will ask the Board if they have any comments on the PIR project objectives or timeline.

Financial Instruments with Characteristics of Equity: The staff recommend that the Board move the FICE project from the research programme to the standard-setting programme.

Pensions Benefits that depend on Asset Returns: In January, the Board decided to develop examples to illustrate how a proposed capped approach would compare to the outcome of the existing requirements in IAS 19 for defined benefit plans with benefits that vary with asset returns. The staff are asking the Board to provide feedback on an illustrative example.

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

The post-implementation review process for IFRS 10, IFRS 11, and IFRS 12 was officially added to the IASB's agenda in September 2019. The IASB has been gathering information to determine the scope of the review and to identify the main questions that need to be answered before the implementation of IFRS 10, IFRS 11, and IFRS 12 can be assessed.

The information gathered so far indicates that many stakeholders believe that the standards work, however, IASB stakeholders have also indicated that there are areas where the standards to their mind might still benefit from improvements. Based on this feedback, the Board agreed the following matters be examined further in the RFI:

IFRS 10 Consolidated Financial Statements provides a single consolidation model that identifies control as the basis for consolidation for all types of entities. The following areas might warrant further investigation:

• power over an investee, including relevant activities, rights that give an investor power over an investee and control without a majority of voting rights;
• the link between power and returns, including principal and agent and non-contractual agency relationships;
• investment entities, including criteria for identifying an investment entity and subsidiaries that are investment entities; and
• accounting requirements for
  • transactions that give rise to a change in ownership; and
  • the partial acquisition of a subsidiary that does not constitute a business.

IFRS 11 Joint Arrangements establishes a principle-based approach for the accounting for joint arrangements, in which the parties recognise their rights and obligations arising from the arrangements. The following areas might warrant further investigation:

• collaborative arrangements outside the scope of IFRS 11;
• classification of joint arrangements; and
• accounting requirements for joint operations.

IFRS 12 Disclosure of Interests in Other Entities combines, enhances and replaces the disclosure requirements for subsidiaries, joint arrangements, associates and unconsolidated structured entities. There were relatively few comments on IFRS 12 requirements and feedback was mixed. Therefore, the RFI aims to establish to what extent the requirements assist an entity to meet the objective of the standard.

After the comment period ends, the IASB will consider the comments received along with information gathered through other consultation activities. The final conclusions of the IASB will be presented in a report and a feedback statement which will also set out the steps the IASB believes should be taken as a result of the review. The Board could decide to add a standard-setting project to its agenda, consider one or more matters further as part of its research programme, or both. The Board could also decide to take no action.

Comments on the RFI are requested by 10 May 2021. The request for information and a corresponding press release are available on the IASB website. Deloitte has released an Need to Know newsletter outlining the contents of the RFI.

On COVID-19, Ms Lloyd noted that the IASB's approach to dealing with the effects of the pandemic was similar to the FASB’s approach. The IASB published educational material to explain how to apply the existing requirements in IFRSs in the context of COVID-19 and issued one small amendment to IFRS 16. The IASB also reconfigured its work plan to allow for the extra demands that have been put on the stakeholders.

Regarding other important Board developments in 2020, Ms Lloyd pointed out that the IASB finalised amendments to IFRS 17, completed important changes to several standards in response to the IBOR reform, and launched two important consultations — on primary financial statements and on goodwill and impairment.

As an example of important developments to be expected next year, Ms Lloyd noted the agenda consultation the IASB will launch in early 2021. She especially encouraged responding to the consultation as this is an important opportunity for the stakeholders to tell the IASB which standard-setting projects they think are important for the IASB to consider and how the IASB should prioritise its work.

Lastly, Ms Lloyd discussed developments in sustainability reporting and pointed at the Trustees' consultation paper published to assess demand for global sustainability standards and, if demand is strong, to assess whether and to what extent the IFRS Foundation might contribute to the development of such standards.

The full text of the speech is available on the IASB website.

Oliver Gottlieb, Matthias Meitner, and Larissa van Deventer will join the CMAC for a three-year term beginning 1 January 2021, renewable once for an additional three-year term.

Additional information, including information on the backgrounds of the new members, is available on the IASB website.

The amendments replace the 2019 IFRS Taxonomy with the most recent one published by the IFRS Foundation in March 2020 as core taxonomy. The ESEF is amended on a yearly basis to reflect updates to the IFRS Taxonomy published by the IFRS Foundation.

Please click for the following additional information on the ESMA website:

• Press release
• Amendments

Note: A corresponding delegated regulation was published in the Offical Journal of the European Union on 18 December 2020.

By the end of April 2021, several of the EFRAG Board members will have served their maximum term of six years and will rotate off the Board. Other members for which the term expires are eligible for reappointment. European stakeholder organisations and national standard setters in countries that are part of EFRAG’s membership and new organisations that are joining the EFRAG membership are invited to nominate candidates.

Please click for more information on the EFRAG website.

Each day of the event offers a keynote address by a member of the Deloitte Global IFRS Leadership Team (addressing IFRS 9, IFRS 15, and IFRS 16, respectively), which is then followed by a roundtable on industry perspectives or on technical and implementation questions, followed again each day by a Q&A session. Spanning all three days of the event, there is a three-part series on the impact of COVID-19 on financial reporting.

Please click for more information and registration for the event.

The update reports on the EFRAG TEG webcast meeting on 10 November.  The publication also covers the activities of the European Reporting Lab.

The update also lists EFRAG publications issued in November including:

• EFRAG' draft endorsement advice letter and separate invitation to comment relating to the endorsement for use in the EU of Classification of Liabilities as Current or Non-current and Deferral of Effective Date (Amendments to IAS 1);
• EFRAG's final comment letter in response to the IASB's Exposure Draft 2019/7 General Presentation and Disclosures;
• EFRAG's feedback statement on the draft comment letter to the IASB's ED/2020/1 Interest Rate Benchmark Reform – Phase 2: Proposed Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16;
• EFRAG's feedback statement that summarises the main comments received by EFRAG on its draft comment letter to the IASB ED/2019/7 General Presentation and Disclosures and explained how those comments were considered by EFRAG during its technical discussions leading to the publication of EFRAG’s final comment letter.

Please click to download the November EFRAG Update from the EFRAG website. 

During the meeting, the IASB will discuss the following:

• Maintenance and consistent application
• Comprehensive review of the IFRS for SMEs
• Disclosure initiative — Accounting policies
• Primary financial statements
• Post-implementation review of IFRS 9
• Disclosure initiative — Subsidiaries that are SMEs
• Financial instruments with characteristics of equity
• Pension benefits that depend on asset returns

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.