The proposed amendments are intended to help preparers in deciding which accounting policies to disclose in their financial statements.

EFRAG supports the proposal to replace the undefined reference to 'significance' with the defined concept of 'materiality'. EFRAG believes that this, with other Disclosure Initiative projects, may help entities to identify and disclose accounting policies that provide material information to users and the connection to the application of materiality to other information. However, EFRAG notes the possible inconsistencies of the proposed guidance with the existing disclosure requirements in IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors regarding accounting policies choices and changes.

Comments on EFRAG's draft comment letter are requested by 22 November 2019. For more information, see the press release and the draft comment letter on the EFRAG's website.

The forum will see the pre­sen­ta­tion of four academic papers, followed either by a response of an academic and an IASB/NNS rep­re­sen­ta­tive or by a panel dis­cus­sion. In both cases, the audience will be invited to par­tic­i­pate in the dis­cus­sion. The papers are the following (all links to the IASB website):

• Standard Precision and Aggressive Financial Reporting—The Influence of Incentive Horizon
• Real Effects of Intangibles Capitalization—Empirical Evidence from Voluntary IFRS adoption in Japan
• Mandatory IFRS and Corporate Governance in Peruvian Corporations
• The impact of IFRS 10 on consolidated financial reporting

The guidance sets out minimum requirements that must be met, provides some best practice examples and also indicates the underlying principles that should be adopted in preparing the information for reporting on sustainability within annual reports and accounts.

The guidance is applicable to all central government bodies that fall within the scope of the Greening Government Commitments (i.e. departments, non-ministerial departments, agencies and Non departmental public bodies) and which produce annual reports and accounts in accordance with HM Treasury’s Government Financial Reporting Manual (FReM). These bodies are required to report on sustainability (unless exempt from doing so).

The press release and guidance are available on the HM Treasury website.

The participants discussed:

• Effect of technology on the investment process — Council members advised on the impact technology have on the need for IFRSs and the IFRS Taxonomy in the future and whether market forces are supplanting benefits of an IFRS Taxonomy.
• Consistent adoption and application of IFRSs — Council members considered to what extent the IFRS Foundation should refresh its approach to monitoring consistent adoption and application.
• Effective risk management — Council members generally agreed with the risks that had been identified by the Foundation. However, there was a suggestion that risks around financing should be considered for inclusion.
• Update on Trustees and Foundation activities and Update on the Board’s activities — Council members received updates on recent trustee activities and on recent activities of the Board and the IFRS Foundation.
• Digital experience for customers and stakeholders — Council members considered how the Foundation’s digital experience should evolve, what developments should be prioritised over the next three years and who the Foundation learn can from.
• 2020 Agenda Consultation — Proposed approach — The majority of council members supported the proposal to include a shortlist of potential projects and some form of preliminary Board thoughts on the topics, rather than the Board’s full preliminary views of which potential projects from the shortlist it proposes to add to its work plan.

The full meeting summary is available on the IASB's website. There are also recordings of the individual sessions.

The AASB recently published published the bulletin Climate-related and other emerging risks disclosures: assessing financial statement materiality using AASB Practice Statement 2, with AASB Practice Statement 2 being essentially the same as the IASB Practice Statement on Materiality. The paper now released provides an outline of the guidance in the practice statement and motivation behind the issuance of the bulletin on climate‐related risk disclosures, key takeaways and recommendations, and the AASB's suggestions on the type of evidence that would be useful for standard-setters.

Climate-related Risk and Financial Statements: Implications for Regulators, Preparers, Auditors and Users was published in the Australian Accounting Review and can be accessed free of charge in the Wiley Online Library.

The second podcast (23 minutes) focuses on IFRS Interpretations Committee activities and developments between June and September 2019. Among the topics covered are two finalised agenda decisions to do with hedge accounting and disclosures of financial liabilities, and five tentative agenda decisions relating to IFRS 15, IFRS 16, IAS 21, IAS 29 and hyperinflation.

Please click to access the podcast through the press release on the IASB website.

The update reports on the EFRAG board meeting on 24 September 2019, the EFRAG board conference call on 10 September 2019, the EFRAG TEG meetings on 16-17 and 25-26 September 2019, the EFRAG TEG conference call on 6 September 2019, the EFRAG CFSS and EFRAG TEG meeting on 25 September 2019 and the meeting of the European Lab Steering Group on 10 September 2019. 

The update also lists publications issued in September 2019:

• EFRAG's draft endorsement advice on amendments to the interest rate benchmark reform;
• EFRAG's final comment letter in response to the IASB's Exposure Draft ED/2019/4 Amendments to IFRS 17;
• EFRAG's final comment letter in response to the IASB's Exposure Draft ED/2019/3 Reference to the Conceptual Framework (Proposed amendments to IFRS 3;
• EFRAG's draft comment letter in response to the IASB's Exposure Draft ED/2019/5 Deferred Tax related to Asset and Liabilities arising from a Single Transaction (Proposed amendments to IAS 12); and
• EFRAG's call for input from crypto-assets experts on its research project.

Please click to download the September EFRAG Update from the EFRAG website

The amendments deal with issues affecting financial reporting in the period before the replacement of an existing interest rate benchmark with an alternative interest rate and address the implications for specific hedge accounting requirements in IFRS 9 Financial Instruments and IAS 39 Financial Instruments: Recognition and Measurement, which require forward-looking analysis. There are also amendments to IFRS 7 Financial Instruments: Disclosures regarding additional disclosures around uncertainty arising from the interest rate benchmark reform.

EFRAG recommends the endorsement of the Amendments. EFRAG’s initial assessment is that the Amendments meet the technical requirements of the Regulation (EC) No 1606/2002 of the European Parliament and of the Council on the application of international accounting standards.

Comments are requested by 10 October 2019.

For more information, see the press release, draft endorsement advice letter and the invitation to comment on the EFRAG’s website.  EFRAG has also updated its endorsement status report which is available here.

The exposure draft contains three proposed amendments to IFRS 3 'Business Combinations' that would update an outdated reference in IFRS 3 without significantly changing the requirements of the standard.

EFRAG agrees with all three proposed amendments.

A press release and the comment letter are available on the EFRAG website.

The revisions have been made in response to recent enforcement cases and a number of corporate failures where the auditor’s report failed to highlight concerns about the prospects of entities which collapsed shortly after.

The revised standard requires:

• greater work on the part of the auditor to more robustly challenge management’s assessment of going concern, thoroughly test the adequacy of the supporting evidence, evaluate the risk of management bias, and make greater use of the viability statement;
• improved transparency with a new reporting requirement for the auditor of public interest entities, listed and large private companies to provide a clear, positive conclusion on whether management’s assessment is appropriate, and to set out the work they have done in this respect; and
• a stand back requirement to consider all of the evidence obtained, whether corroborative or contradictory, when the auditor draws their conclusions on going concern.

As a consequence of introducing the new standard, the FRC has withdrawn  Bulletin 2008/01 Audit issues when financial market conditions are difficult and credit facilities may be restricted and Bulletin 2008/10 Going concern issues during the current economic conditions.

ISA (UK) 570 is effective for audits of financial statements for periods commencing on or after 15 December 2019. Early adoption is permitted. 

The FRC press release and the revised standard are available on the FRC website.