The update reports on the EFRAG Board conference call on 6 July and webcast meeting on 16 July, the EFRAG TEG webcast meeting on 1-2 July, 8 July and a conference call on 6 July and the EFRAG TEG and EFRAG CFSS webcast meeting on 1 July.  The publication also covers the activities of the European Reporting Lab.

The update also lists EFRAG publications issued in July including:

• EFRAG's final endorsement advice relating to Extension of the Temporary Exemption from Applying IFRS 9 (Amendments to IFRS 4 Insurance Contracts);
• EFRAG's discussion paper to gather constituents' views on the accounting for crypto-assets (liabilities) from the hiolder and issuer perspective; and
• EFRAG's call for TEG members.

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

The webinars will be hosted by IASB Board Member Darrel Scott and the IASB’s technical staff. Participates are allowed to submit question prior to the webinars.

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

Most of the 20 jurisdictions surveyed for the paper expressed the belief that IFRS 17 will contribute to financial stability through greater transparency as the current international accounting standards for insurance contracts permit a variety of approaches, which complicate comparison between insurers’ financial results. The paper states:

Overall, IFRS 17 is a welcome development. It is aimed at improving global comparability with respect to the structure of liability valuation and transparency in insurer balance sheets, thus benefiting policyholders, investors and, ultimately, financial stability.

Please click to access the paper on the BIS website.

Please click for more information and registration for the event on the EFRAG website.

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

The IASB issued amendments to IFRS 17 in June 2020 to address concerns and implementation challenges. Specifically, the webcast focuses on implementation issues related to the amendments related to (1) requirements other than transition and (2) transition requirements.

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

The podcast discusses:

• IBOR Reform and its effects on financial reporting — Phase 2;
• Disclosure initiative — Accounting policies;
• Management commentary;
• Extractive activities; and
• Maintenance and consistent application.

The podcast (8 minutes) can be accessed through the press release on the IASB website.

The detailed notes taken by Deloitte observers at the meeting are available here.

Among the proposals included in the consultation document was the suggestion that an EU standard-setter could be installed that would set European non-financial reporting standards. Only recently, the Commission tasked the European Financial Reporting Advisory Group (EFRAG) to undertake preparatory work for possible European standards on non-financial reporting.

While respondents to the consultation agreed that standardisation in the area would be beneficial, the idea of a Europe only solution met resistance. These comments are not reflected in the summary on the EC website. The only paragraph acknowledging that non-financial reporting is not solely a European issue notes that "the EU should cooperate with other major jurisdictions and non-EU investors to make sure that the EU standard is widely recognised".

Beyond the EC consultation, there have been repeated calls for international standard-setting in this area. More often that not, the IFRS Foundation is believed to be the right place to establish such a standard-setter (a parallel Board to the IASB). Most recently, the Eumedion Foundation published a position paper Towards a global, investor focused standard setter for corporate non-financial reporting.

Please see the press release on the IASB website for more information.

Disclosure Initiative: Accounting Policies: In August 2019, the Board published the Exposure Draft (ED) Disclosure of Accounting Policies, which proposed amendments to IAS 1 and IFRS Practice Statement 2. At this meeting, the IASB decided to amend the transition requirements to require entities to disclose material accounting policy information for the current period and disclose comparative accounting policy information if it is relevant to understanding the current period’s financial statements. They also decided that the amendments will apply to annual reporting periods beginning on or after 1 January 2023 with early application permitted and that the effective date of the amendments to IAS 8 resulting from the Accounting Policies and Accounting Estimates project be changed to the same date.

Management Commentary: The IASB supported the recommended potential guidance on reporting financial resources. The IASB discussed requirements and possible supporting guidance on reporting progress in managing key matters, a disclosure objective for performance and position; and possible guidance supporting that objective, including on identifying key facets of performance and position that need to be addressed in management commentary. They also discussed measures and indicators.

Extractive Activities: The staff papers summarise their assessment on how activities within the scope of IFRS 6 would be accounted for in the absence of that Standard, applying the requirements in IAS 16 and IAS 38.

The staff concluded that costs incurred during the exploration phases would not meet the requirements of IAS 16 or IAS 38 for recognition as an asset. The staff also assessed expenditure acquiring the legal rights from a third party and concluded that it could meet the definition of an intangible asset and the recognition criteria, but that application of IAS 36 without the specific requirements in paragraphs 18-22 of IFRS 6 would generally lead to an immediate write‑off of exploration and evaluation assets. Applying the guidance in paragraphs 54 and 55 of IAS 38, exploration and evaluation expenditure incurred subsequent to the acquisition of the legal right would be recognised as an expense as it is incurred. No decisions were made.

Maintenance and Consistent Application—Lack of exchangeability: In April, the IASB decided on how to amend IAS 21 to address the accounting when the spot exchange rate is not observable (because of a lack of exchangeability between two currencies). The IASB decided that the proposed changes be applied prospectively. The staff will prepare the ED, which will be open for comment for 120 days.

IBOR Reform and the Effects on Financial Reporting: The IASB discussed feedback on the proposals for qualifying hedging relationships and groups of items. The IASB decided to permit, rather than require, entities to reset cumulative fair values to zero for the purpose of performing the retrospective effectiveness assessment as proposed in paragraph 102S of the ED and confirmed the proposals in the ED related to the accounting for qualifying hedging relationships subject to clarifications and drafting suggestions as explained in the staff analysis. That completes the deliberations and the staff expect to finalise the amendments.

IFRS Taxonomy: The staff expect to finalise the update the IFRS Taxonomy for the COVID-19-related amendments to IFRS 16 with no changes. There was no paper for this session.

Please click to access the detailed notes taken by Deloitte observers for the entire meeting.