In light of the amendments the IASB has proposed to the standard, EFRAG has now launched a limited update of the 2018 case studies.

Please click for more information on the EFRAG website.

IFRS for SMEs was first issued in July 2009. A first comprehensive review of the standard took place between 2012 and 2014. The IASB has now launched a second review with the objective of seeking views on whether and how to align the IFRS for SMEs with full IFRSs.

The Request for Information is divided into three parts:

• Part A contains strategic and general questions.
• Part B contains questions on specific sections of the IFRS for SMEs and their alignment with the full IFRSs; and
• Part C contains questions on new topics and other matters related to the IFRS for SMEs.

A summary of the questions asked in each Part is set out in the table at the bottom of the article.

The SMEIG is expected to review comments on the request for information and make recommendations to the IASB on possible amendments.

Click for:

• Press release (link to IASB website)
• Request for information: Comprehensive Review of the IFRS for SMEs Standard
• Snapshot overview of the request for information on the IASB website

Stakeholders can submit feedback by:

• Comment letter process — For stakeholders that currently have this process in place
• Optional response document — For stakeholders without an existing comment letter process, but with the time and resources to provide one
• Online survey — For stakeholders with limited time and resources

The IPTF's discussion document for the 19 November 2019 meeting is now available and states the following view of the Task Force:

Countries with three-year cumulative inflation rates exceeding 100%:

• Argentina
• South Sudan
• Sudan
• Venezuela
• Zimbabwe

Countries with projected three-year cumulative inflation rates exceeding 100%:

• Islamic Republic of Iran

Countries where the three-year cumulative inflation rates had exceeded 100% in recent years:

There are no countries in this category for this period.

Countries with recent three-year cumulative inflation rates exceeding 100% after a spike in inflation in a discrete period:

• Angola
• Suriname

Countries with projected three-year cumulative inflation rates between 70% and 100% or with a significant (25% or more) increase in inflation during the current period

• Democratic Republic of Congo
• Liberia
• Yemen

The IPTF also notes that there may be additional countries with three-year cumulative inflation rates exceeding 100% or that should be monitored which are not included in the analysis as the necessary data is not available. An example cited is Syria.

The full list, including exact numbers, detailed explanations of the calculation of the numbers, and observations of the Task Force is available on the CAQ website. We also offer the overview of the IPTF's assessment of hyperinflationary jurisdictions at the end of our summary of IAS 29.

EFRAG published its final comment letter on 12 December 2019.

This feedback statement summarises the comments received by EFRAG on its draft comment letter and explains how those comments were considered by EFRAG during its technical discussions leading to the publication of EFRAG's final comment letter.

A press release and the feedback statement are available on the EFRAG website.

Provisions (Thu 0945-1030): The staff recommend that the Board add a project to amend IAS 37 to align the IAS 37 liability definition and requirements for identifying liabilities with the Conceptual Framework (including potentially withdrawing IFRIC 21); clarifying which costs to include in the measure of a provision; and specifying whether the rate at which an entity discounts a provision for the time value of money should reflect the entity’s own credit risk.

Amendments to IFRS 17 Insurance Contracts (Thu 1320-1535): The Board will discuss some of the topics where it had decided to consider the feedback from respondents further, specifically:

• the scope exclusion from IFRS 17 for some credit card contracts (recommend confirm the proposed scope exclusion with some changes);
• Transition—the prohibition from applying the risk mitigation option retrospectively (recommend to retain, unchanged);
• Business combinations—contracts acquired in their settlement period (recommendation to retain, unchanged);
• Interim Financial Statements (recommend changing the requirements); and
• Asset for insurance acquisition cash flows—transition and business combinations (recommend changing the requirements).

IBOR Reform and the Effects on Financial Reporting (Thu 1050-1220): The Board will consider recommendation from the staff in relation to the end of application of the Phase 1 exceptions from specific hedge accounting requirements in IFRS 9 and IAS 39 in the context of interest rate benchmark reform (IBOR reform); the potential effects of IBOR reform on IFRS Standards other than those related to financial instruments accounting; and potential disclosure requirements to accompany the tentative decisions the Board has made during Phase 2 of the IBOR project.

Pension Benefits that Depend on Asset Returns (Wed 1530-1600): The staff are recommending that the Board consider amending IAS 19 to cap the projected cash flows when benefits vary with the level of returns on specified assets, so that they do not exceed the discount rate specified by IAS 19. The change would be to address the inconsistency in IAS 19 that the variability (risk) in the future asset returns is reflected only in the cash flows and not in the discount rate applied to those cash flows. The staff are asking Board members for comments.

Disclosure Initiative (Wed 1630-1800): The Board will continue its discussions of potential revisions to the disclosure requirements in IAS 19 and recommend that the Board refine some of its tentative decisions relating to defined benefit plans, multi-employer plans and group plans. 

IFRS 3 reference to the Conceptual Framework (Thu 0930-0945): The staff recommend that the effective date of the updated references to the Conceptual Framework in IFRS 3 be 1 January 2022. The new references would apply to business combinations that occur in any annual reporting period starting after that date, with earlier application permitted.

Subsidiaries that are SMEs (Tue 1100-1230): The staff recommend that the Board develop an ED as soon as possible proposing reduced disclosure requirements for subsidiaries that are SMEs.

Business Combinations under Common Control (Wed 1400-1530): The Board has decided that the acquisition method, as set out in IFRS 3, should be required for listed acquirers that have NCI. They have received feedback from some sectors that a predecessor should apply to all common-control business combinations. The staff recommend no change to the decisions already made.  The staff also set out their recommendations for recognition and measurement applying a predecessor approach.

The staff will give updates on:

• the feedback received on the proposed update to the IFRS Taxonomy to reflect the amendments made to IFRS Standards in 2019 in response to IBOR reforms (Thu 1535-1605);
• the ED for rate-regulated activities (Thu 1045-1050);
• work being undertaken on research projects and the research pipeline (Thu 1030-1045); and
• recent activities of the IFRS Interpretations Committee (Wed 1600-1615).

More information

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

The International Business Council (IBC) of the WEF discussed a proposal prepared by the Forum in collaboration with the Big Four accounting firms – Deloitte, EY, KPMG and PwC – titled Toward Common Metrics and Consistent Reporting of Sustainable Value Creation. The proposal recommends a set of core metrics and recommended disclosures. The intent is for the metrics to be reflected in the mainstream annual reports of companies on a consistent basis across industry sectors and countries.

The proposed metrics and recommended disclosures have been organized into four pillars that are aligned with the UN Sustainable Development Goals (SDGs) and principal Environmental, Social, and Governance (ESG) domains. They are:

The metrics are drawn, wherever possible, from existing standards and disclosures such as GRI, SASB, TCFD, CDSB and others. Instead of reinventing the wheel by creating a new standard, they aim to amplify and elevate the rigorous work that has already been done by these initiatives, bringing their most material aspects into mainstream reports on a consistent basis.

Adoption of such recommended universal metrics and disclosures by IBC companies is intended to be a catalyst for greater alignment and synergy among existing ESG standards and ultimately a system-wide solution, such as a generally accepted international accounting or other reporting standard drawn from best practice.

Please click to download Toward Common Metrics and Consistent Reporting of Sustainable Value Creation from the WEF website.

The group is made up of over 50 organisations globally that have convened to develop a model and share expert insights.

The model that they have developed is defined as follows: ‘Integrated thinking is a multi-capital management approach that enables organizations to deliver their purpose to the benefit of their key stakeholders overtime. It is about creating and preserving value and enabling better decision-making based on interconnected, multi-capital information.’

The group’s underlying thinking comes from the fundamental concepts and other aspects of the International <IR> Framework and therefore aims to make an explicit link between reporting and enhanced decision-making within the organisation. The report therefore considers, for example:

• How taking a broader and more integrated view of the resources (‘capitals’) that organisations rely on to create value can be used in decision-making.
• Better understanding of factors in value creation and how these are realised over time – especially in the longer term.
• Better alignment of the company with its role in relation to society and the environment (which the report calls ‘system value’).
• An enhanced ability to understand and make decisions on optimising value creation, taking into account longer-term performance, the needs of stakeholders, and the impacts on the capitals that are used in the value creation process.

In his foreword to the report, IIRC Chair Emeritus Professor Judge Mervyn King writes:

A collaborative management culture, a multicapital mindset and outcome-based corporate governance – these are the building blocks of integrated thinking, the output of which is an integrated report. Above all, integrated thinking is a unifying concept and a strategic tool that helps management to bring order to the manifestly complex environment in which businesses must operate in the 21st century.

The report’s authors invite feedback on the initial ideas set out in the report and promise a further paper at the end of 2020.  Our report A Directors Guide to Integrated Reporting is available here.

The Required IFRS Standards 2020 publication contains all official pronouncements that are mandatory on 1 January 2020. It does not include IFRSs with an effective date after 1 January 2020. The Annotated Required IFRS Standards 2020 includes the same content as Required IFRS Standards 2020, but with additional annotations containing extensive cross-references, explanatory notes and IFRS Interpretations Committee agenda decisions.

The books are available in electronic format for subscribers to eIFRS Professional. Printed copies of the books are available for sale through the IASB's web shop.

Agenda decision to finalise

IFRS 16 Leases—Definition of a Lease-Shipping Contract: The Committee decided, by a vote of 11, to finalise the agenda decision with two amendments to wording.

Work in progress

There were no new matters that have not yet been presented to the Committee.

More information

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