The report aims to provide issuers with an example of an annual report in the ESEF format for their submissions to the national Officially Appointed Mechanisms.

Please click for access to the report and more information on the ESMA website.

As reported in April 2020, the responses to the cogito paper show strong support for a global solution to non-financial reporting. Accountancy Europe summarises the key takeaways from the comment letters received as follows:

• The ultimate objective should be a system solution to deliver global NFI reporting standards connected to financial information.
• The ‘system solution’ could be achieved in steps such as bilateral moves to closer align or converge NFI reporting standards, policy developments, and expand the mandates for multilateral organisations.
• A ‘building blocks’ approach could address global challenges and varying policy needs with a core set of global metrics for NFI reporting to ensure comparability and address global challenges and with optional further blocks to reflect jurisdictional priorities or address sector-specific topics.
• Quickest progress could be made by building on the best of NFI frameworks and standards (CDP, CDSB, GRI, and SASB).
• The European Union should collaborate with different organisations to help catalyse a global solution.

Please click to access the follow-up paper on the Accountancy Europe website.

The Board will discuss the following:

• Maintenance and consistent application
• Disclosure initiative — Accounting policies
• Disclosure initiative — Targeted standards-level review of disclosures
• Classification of liabilities as current or non-current
• Extractive activities
• IBOR reform and the effects on financial reporting — Phase 2

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 reports found that investors recognise COVID-19 may create a wide range of issues for companies, but that the provision of transparent and timely information helps investors in their decision-making and drives the allocation of capital when companies are looking to the markets for support.

Specific elements of uncertainty relevant to the next 12 months might include (but are not limited to):

• Timing of resumption of operations.
• Further restrictions that limit the return to normal operations.
• Restrictions placed on government (or other) capital.
• Timing and continuation of government schemes and support packages.
• The outcome of capital raising actions, discussions with banks, and landlords.
• Short-term impacts of pricing changes to revenue and expenses.
• Impacts on human capital, the supply chain and customers.

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

• Press release
• Report with practical advice to companies and infographic setting out the disclosures investors expect to see from companies during this time of uncertainty
• Report with specific guidance on going concern, risk and viability disclosures

While respondents to the consultation agree that standardisation in the area would be beneficial and that the scope of the NFRD could be expanded, the idea of a Europe only solution meets resistance.

A coalition of ten organisations including ACCA, Accountancy Europe, CDSB, and WWF warns to "keep up the international role for reporting standards" and notes that "we need to bear in mind that challenges such as the worldwide climate crisis requires global efforts and solutions"; ESMA notes that it "is of the view that international alignment should be the objective"; and the IFAC "urges the Commission to adopt a global mindset".

Deloitte has also submitted a comment letter. We note:

We support global standardisation because the issues faced are global ones and many businesses have global supply and value chains and global investors.

The AIM Rules for Companies require a half-yearly financial report to be published within three months from the end of the period to which it relates.  The announcement by the London Stock Exchange will permit such companies that need extra time to prepare their half-yearly report an additional one month.  The London Stock Exchange has indicated that the temporary extension will be kept under review and, at a suitable time, will announce how the policy will be removed in a fair, orderly and transparent way.

AIM companies that wish to utilise the aditional month must notify via an RIS its intention to do so prior to the company's reporting deadline under AIM Rule 18 and the company's nominated advisor must separately inform the AIM Regulation.

A press release is available on the London Stock Exchange website.

Previous guidance was provided in March 2020 containing, amongst other things, the approach that should be taken by banks, building societies and PRA-designated investment firms in assessing expected loss provisions under IFRS 9 Financial Instruments.  The aim of the guidance was to ensure that the requirements of IFRS 9 were applied in a consistent way and avoid the risk that they approach the standard differently potentially leading to inappropriate or inconsistent levels of expected credit losses.

The March guidance related to payment holidays, moratoria or deferrals.  As the first payment deferrals are now coming to an end, the FCA has published updated guidance (link to FCA website) on how lenders should treat the payment deferrals at the end of the initial deferral period.  The guidance issued by the PRA is intended as an update to the March guidance to address the accounting consequences of exits from initial payment deferrals. 

Click here for the guidance on the PRA website.  Further updated guidance is available on the PRA website here.

Supply Chain Financing Arrangements — Reverse Factoring: In its April 2020 meeting, the staff presented the research performed on supply chain financing ("SCF") arrangements submitted. The staff recommend that the Committee:

• publish a tentative agenda decision outlining how IFRS applies to different aspects of accounting for them; and
• develop new disclosure requirements for arrangements entered in to fund payables to suppliers.

IFRS 16 Leases — Sale and Leaseback with Variable Payments: In March 2020, the Committee published a tentative agenda decision stating that for a sale and leaseback transaction with variable payments the seller-lessee recognises a lease liability at the date of the transaction, even if all the payments for the lease are variable and do not depend on an index or rate, reflecting how the right-of-use asset is measured to determine the gain or loss on the sale and leaseback transaction. The staff recommend that the Committee finalise the tentative agenda decision, but to refer to the liability as a financial liability rather than a lease liability.

IAS 12 Income Taxes — Deferred Tax Related to an Investment in Subsidiary: In March 2020, the Committee published a tentative agenda decision that when an entity expects to recover the carrying amount of its investment in the subsidiary through distributions of profits by the subsidiary, the entity uses the distributed tax rate to measure the deferred tax liability related to its investment in the subsidiary. The staff recommend that the Committee finalise the tentative agenda decision with minor editorial changes.

IAS 38 Intangible Assets — Player Transfer Payments: In November 2019, the Committee published a tentative agenda decision stating that when a football club transfers a player to another club it recognises the gain or loss in profit or loss applying IAS 38, and not revenue (IFRS 15). However, the agenda decision suggested that the intangible asset could be classified as inventory (IAS 2) if it was is acquired for development and sale in the ordinary course of business. The staff recommend finalising the agenda decision, but with all references to IAS 2 removed.

Work in progress: The staff are analysing requests related to the hedge of variability in cash flows in real terms and sale and leaseback in a corporate wrapper.

The full agenda for the meeting can be found here. We will update this page for any changes to the agenda and our Deloitte pre-meeting summaries for the meeting as they become available.

The document offers the chapters 'Finding Value in Changing Landscape', 'Delivering Value — managing intangibles', 'Communicating value creation from Intangibles', 'Tools', and 'Experience & Cases', all of which are supported by examples, cases and interviews.

The chapter on communicating value creation from intangibles looks at two main aspects:

Why should companies report value creation from intangibles?

• Supporting and evidencing strategic positioning
• Building confidence and relationships with key stakeholders
• Differentiating from competitors
• Demonstrating progress on existing commitments and values

And what should companies report on?

• Unique value creation mechanism
• Strategic intangible assets
• Strategy, mission, vision, values
• Strategy for the future business, development and utilisation of intangible assets
• Governance
• Risks and opportunities related to intangibles
• Business environment

The WICI website offers a press release and access to the draft guidance. Comments on the guidelines are invited by 31 August 2020.

The International Monetary Fund (IMF) has released a report arguing that investors and equity markets have been ignoring the growing risk of financial losses associated with the continued rise in global temperatures, and suggesting that climate risk should be made a part of international reporting standards. Please click to access the report on the IMF website.

The Climate Disclosure Standards Board (CDSB) has released a report Falling short? analysing the 2019 environmental and climate-related disclosures of Europe’s top 50 largest listed companies. While the findings show some improvement in company disclosure compared to 2018, current reporting practices often still fail to provide investors with a clear understanding of a company’s development, performance, position and impact. Please click to access the report on the CDSB website.

The CDSB has also released a "TCFD to-do list" with nine steps to ensure that issuers are making effective TCFD aligned disclosures. The list can be accessed on the CDSB website.

The Global Reporting Initiative (GRI) has released a new standard, GRI 306: Waste 2020, which updates previous GRI disclosures on waste, requires organisations to report on waste generated throughout the value chain, and release detailed information on its composition and how it is managed. The new standard is available free of charge on the GRI website.

The GRI has also issued new document, Linking the SDGs and the GRI Standards, that covers the 17 SDGs and maps them against the standards and disclosures that apply for each. Please click to access the document on the GRI website.

In addition, the GRI has published a new report, Using Corporate Reporting to Strengthen Sustainable Development Goals, with five key recommendations for how governments and other policy actors can use corporate reporting to strengthen SDGs progress at the national level. Please click to access the report on the GRI website.

The three European Supervisory Authorities (EBA, EIOPA and ESMA - ESAs) will organise a public hearing on proposed ESG disclosure standards for financial market participants, advisers and products. More information is available on the ESMA website.

The United Nations Sustainable Stock Exchanges (SSE) initiative has launched a database of all guidance documents provided by stock exchanges for listed companies so that other stock exchanges can learn from their peers. Please click to access the database on the SSE website.

The Basel Committee on Banking Supervision (BCBS) has published a stocktake report on its members' existing regulatory and supervisory initiatives on climate-related financial risks. The report can be accesses on the BCBS website.

The International Integrated Reporting Council (IIRC) has published its 2019 Integrated Report Building Consensus Towards a Global System. The report can be accessed on the IIRC website.

The German Federal Ministry of Justice and Consumer Protection (BMJV) has appointed the Accounting Standards Committee of Germany (ASCG) with an extensive investigation of non-financial reporting. The investigation is meant to contribute to the further development of non-financial reporting at European level. Click for more information on the ASCG website.

The United Nations Conference on Trade and Development (UNCTAD) Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting (ISAR) is offering a webinar "Assurance on sustainability reports: current practices and challenges" on 16 June 2020. More information is available on the UNCTAD website.

The Japan Exchange Group (JPX) has announced the publication of a new handbook to support listed companies who are choosing to work on ESG disclosure. The handbook is also available in the English language and can be accessed on the JPX website.