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Financial Reporting Lab publishes first newsletter of 2020

04 May 2020

The Financial Reporting Lab ("the Lab") has published its first newsletter of 2020.

The newsletter provides an update of the Lab's current projects and a brief overview of its other activities.  Some highlights include:

  • that the Lab's work on business models is being paused with a greater focus on those areas where investors are currently demanding more information.  To feed into this work the Lab have launched a survey on what information investors might want and need.
  • the release, in January, of the Lab's workforce reporting report.
  • flagging guidance issued by the FRC on COVID-19.

The full newsletter is available on the FRC website here.

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EFRAG publishes April 2020 issue of 'EFRAG Update'

04 May 2020

The European Financial Reporting Advisory Group (EFRAG) has published an 'EFRAG Update' summarising public technical discussions held and decisions made during April 2020.

The update reports on the EFRAG Board webcast meeting on 21 April, the EFRAG webcast meetings on 6, 8 and 29 April, the EFRAG TEG webcast meeting on 16 April and the meeting of the European Lab Steering Group on 22 April.

The update also lists EFRAG publications issued in April:

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

ICAEW (Institute of Chartered Accountants in England and Wales) (lt green) Image
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ICAEW publishes a two-part guide on COVID-19 considerations for auditing going concern and reporting of material uncertainties

04 May 2020

The Institute of Chartered Accountants in England and Wales (ICAEW) Financial Reporting Faculty has published a two part guide for auditors covering COVID-19 considerations for auditing going concern, and how to report when a material uncertainty relating to going concern exists. The guide builds upon the Financial Reporting Council’s (FRC’s) March 2020 Bulletin for auditors which set out considerations for auditors in relation to COVID-19.

The first part of the guide provides advice for auditors when testing the going concern assessments of reporting entities impacted by COVID-19. It offers practical considerations in relation to ISA 570 requirements. It covers:

  • the going concern basis of accounting;
  • auditing going concern; and
  • concluding on going concern

The second part of the guide sets out the steps auditors need to take to ascertain whether material uncertainty disclosures in relation to going concern in the financial statements are adequate, and how these disclosures will then impact the audit report. It supplements the guidance in the Financial Reporting Faculty’s audit report guides. It covers:

  • determining whether there are material uncertainties;
  • determining whether disclosures are adequate;
  • how auditors should approach disclosures included within other information;
  • how to make the necessary changes to the auditor’s report;
  • how to report on key audit matters; and
  • what to do if the auditor concludes that disclosures are not adequate

A press release and the two part guide is available on the ICAEW website. Our news item on the FRC’s March 2020 Bulletin for auditors is here.

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IASB proposes to defer effective date of IAS 1 amendments

04 May 2020

The International Accounting Standards Board (IASB) has published an exposure draft 'Classification of Liabilities as Current or Non-current — Deferral of Effective Date (Proposed amendment to IAS 1)' proposing to defer the effective date of the January 2020 amendments to IAS 1 by one year. Comments are requested by 3 June 2020.


On 23 January 2020, the IASB issued Classification of Liabilities as Current or Non-current (Amendments to IAS 1) providing a more general approach to the classification of liabilities under IAS 1 Presentation of Financial Statements based on the contractual arrangements in place at the reporting date. The amendments currently have an effective date of 1 January 2022.

In April 2020, the IASB held a supplementary IASB meeting to consider COVID-19-related matters including the Board's timelines in view of the COVID-19 pandemic. The Board tentatively decided to delay by one year the effective date of Classification of Liabilities as Current or Non-current (Amendments to IAS 1) to annual reporting periods beginning on or after 1 January 2023.

The proposed amendment published today is solely seeking to delay the effective date of the January 2020 amendments by one year.


Suggested changes

The changes proposed in ED/2020/3 Classification of Liabilities as Current or Non-current — Deferral of Effective Date (Proposed amendment to IAS 1) would defer the effective date of Classification of Liabilities as Current or Non-current (Amendments to IAS 1) to annual reporting periods beginning on or after 1 January 2023. Earlier application of the January 2020 amendments would continue to be permitted.


Comment period

Comments on the exposure draft are requested by 3 June 2020. The shortened comment period of 30 days was approved in a DPOC meeting on 16 April 2020.

Additional information

Please click for:

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IFRS Interpretations Committee holds April 2020 meeting

01 May 2020

The IFRS Interpretations Committee met via video conference on 29 April 2020. We have posted Deloitte observer notes for the technical issues discussed during this meeting.

Comments on Tentative Agenda Decision

IAS 12 Income Taxes—Multiple Tax Consequences of Recovering an Asset (Agenda Paper 2): The Committee decided to finalise the agenda decision, with some suggested changes to the drafting.

Research Summary

Supply Chain Financing—Reverse Factoring (Agenda Paper 3): The Committee members provided suggestions for the questions to be addressed in the upcoming agenda paper for supply chain financing.

More Information

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

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Agenda for the May 2020 IFRS Advisory Council meeting

01 May 2020

An agenda has been released for the upcoming meeting of the IFRS Advisory Council, which was originally scheduled for March 2020 and will now be held by remote participation on 27 and 28 May 2020.

A summary of the agenda is set out below:

Wednesday 27 May 2020 (12:00-15:00)

  • Update on Trustees and Foundation Activities
  • Chairman’s preview
  • Monitoring adoption (panel discussion and general discussion)
  • Customer’s digital experience (introduction and discussion)

Thursday 28 May 2020 (12:00-14:15)

  • Update on the Board’s activities
  • KPIs Board’s activities (introduction and discussion)
  • Focus on the Advisory Council
  • Summing up of the meeting

Agenda papers for the meeting are available on the IASB website.

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EFRAG draft comment letter on rent concessions ED

01 May 2020

The European Financial Reporting Advisory Group (EFRAG) has published a draft comment letter on the IASB exposure draft ED/2020/2 'Covid-19-Related Rent Concessions (Proposed amendment to IFRS 16)'.

In the draft comment letter, EFRAG agrees with the proposals in the exposure draft published last Friday that would provide lessees with an exemption from assessing whether a COVID-19-related rent concession is a lease modification. However, EFRAG would support expanding the scope of the amendment to include all rent concessions granted during 2020 and not just payments due in 2020.

EFRAG has also published a preparatory draft of an endorsement advice of the amendment. Doing so before issuance of the final amendment by the IASB is intended to allow for the finalisation of the endorsement advice as soon as possible after the IASB has issued the amendment to IFRS 16. The preparatory draft of the endorsement advice is based on the assumption that the final amendment will not be substantially different from the proposals in the exposure draft.

Comments on EFRAG's draft comment letter are requested by 7 May 2020, comments the preparatory draft of an endorsement advice by 20 May 2020. For more information, see the press release, the draft comment letter and the preparatory draft of an endorsement advice on the EFRAG website.

EFRAG is also offering a public outreach event on the exposure draft on Thursday 7 May 2020. More information is available here.

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IASB issues podcast on latest Board developments (April 2020)

30 Apr 2020

The IASB has released a podcast featuring IASB Chair, Hans Hoogervorst and Vice-Chair, Sue Lloyd discussing the deliberations at (1) the April IASB meeting and (2) the Board's supplementary meeting on COVID-19-related matters.

The podcast features discussions related to the effects of COVID-19 on stakeholders, specifically changes in the work plan timeline and proposed rent concession amendments to IFRS 16, Leases. The podcast also discusses:

  • Amendments to IFRS 17, Insurance Contracts.
  • Post-implementation reviews of IFRS 10, IFRS 11 and IFRS 12.
  • Management commentary.
  • Maintenance and consistent application.

The podcast can be accessed through the press release on the IASB website. More information on the topics discussed is available through our comprehensive notes taken by Deloitte observers at the April IASB meeting as well as the Board's supplementary COVID-19 meeting.

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Responses to Accountancy Europe cogito paper show strong support for a global solution to non-financial reporting

30 Apr 2020

In December 2019, Accountancy Europe published a paper describing and calling for a global solution to interconnected standard-setting that can meet the need for reliable, consistent information in non-financial reporting that is interconnected with financial reporting. The comment deadline for the paper has now ended and the responses received show strong support for a global approach to standard setting in this area.

The paper had noted that the hundreds of non-financial information (NFI) reporting initiatives available are leading to confusion and the potential for greenwashing. For an effective response to these global issues and stakeholder demands, NFI reporting needs to be harmonised and interconnected with financial reporting. The paper then explored four approaches how this can be achieved, being (1) an international non-financial reporting standards board within the IFRS structures, (2) regional consolidation, (3) separate governance structure for financial and NFI reporting; and (4) global corporate reporting structure.

The responses so far made available on the Accountancy Europe website (17 responses that can be accessed here) show strong support for approach number four.

Of the large accounting organisations, ACCA very much supports overall the content and conclusions of the paper and agrees that approach 4 represents the best model for setting the standards needed to address the issues at hand. IFAC states that a global approach to international standard-setting is an optimal solution and notes: "IFAC strongly supports a global, versus regional or local, approach to “non-financial” standard setting, including the process of establishing a conceptual framework and standards, for the same reasons international standards were critical for the maturity of financial reporting. A regional or local approach ultimately leads to inefficiency and increased costs — for both companies and investors and might be challenging to retrofit at an international level."

The majority of national standard-setters also support the global approach. The German standard-setter ASCG states: "[W]e do not share the view of those that believe Europe should be first, go regional and create its own non-financial reporting environment. The reporting requirements are primarily targeting companies that are sourcing, selling and doing business beyond Europe's borders" and the Dutch standard-setter DASB believes that for any global initiative, clear support of major national and international stakeholders and jurisdictions is essential and notes that approach four may be most appropriate given the fact that also the United Nations have made promising progress in developing their SDGs.

The sustainability and integrated reporting organisations, apart from promoting their own standards and frameworks, favour global solutions as well. The CDSB warns that a "regional approach may not be the best method to develop a global standard. This problem is further exacerbated by the issue that jurisdictions outside of Europe may be hesitant to adopt regional concepts", GRI notes that a "globalized system will unlock the value of the information by easing comparability and analysis while minimizing reporting burden", and the IIRC comments: "We endorse the approach taken by Accountancy Europe in encouraging dialogue between stakeholders that will lead to a globally coordinated solution involving many different constituents on an inclusive basis."

Responses from academia offer careful analysis of all approaches and general statements in the paper. One comment letter notes: "Approach 4 has much greater potential with respect to global acceptance. It is unrealistic to expect global adoption of an approach that is designed and controlled locally. [...] This is especially important for NFI because the underlying challenges are global. [...] By creating barriers to global acceptance, Approach 2 risks undermining the EU’s policy ambition in this regard. Conversely, if the EU were to initiate, promote and support Approach 4, and commit to adopting the resulting standards (with appropriate endorsement process), then it would be in a strong position to ensure that the specific implementation of Approach 4 would reflect the EU’s views, against criteria such as public accountability and balanced member ship of the standard-setting body."

The responses from audit firms all support a global solution as well. Our Deloitte comment letter notes: "We agree that there is a need for a global solution in view of the global flow of capital and the urgent need to address issues such as climate change which have no borders. We urge capital market regulators and multi-lateral authorities to engage urgently in putting a robust global systemic solution in place."

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Summary of the March 2020 GPF meeting

30 Apr 2020

Representatives from the International Accounting Standards Board (IASB) met with the Global Preparers Forum (GPF) in London on 5 March 2020. Notes from the meeting have now been released.

The topics discussed at the meeting included:

  • Primary financial statements — Overview over the ED and preliminary views of the members
  • IASB update
  • Goodwill and impairment — Overview of the Board’s preliminary views that will be included in the discussion paper and GPF members’ views on the feedback process for the project and areas of focus during the comment and outreach period
  • Disclosure initiative: Targeted standards-level review of disclosures in IAS 19 and IFRS 13 — next steps in the project

The next GPF meeting will be held jointly with the CMAC on 18 and 19 June 2020.

For more information, see the meeting page and the meeting summary on the IASB's website.

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