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News

IFRS Trustees meeting (blue) Image

Trustees decision on the ISSB expected in October

28 Sep 2021

The IFRS Foundation Trustees held a video conference on 20 September 2021.

The Trustees were provided with a briefing on the work of the Technical Readiness Working Group, which included the planning for the appropriate transfer of technical expertise, content and resources to the proposed ISSB and steps taken in order to provide the proposed ISSB with a ‘running start’. In addition, the Trustees were updated on (1) the capital funding and other support received from jurisdictions and (2) feedback received on the proposed amendments to the IFRS Foundation Constitution.

The next meeting is scheduled for the week of 18 October 2021. During that meeting, the Trustees will make a final determination about establishing the new board.

For more in­for­ma­tion, see the full summary on the IASB’s website.

Deloitte document (mid gray) Image

We comment on the proposed narrow-scope amendment to IFRS 17

28 Sep 2021

Deloitte has commented on the IASB's exposure draft 'Initial Application of IFRS 17 and IFRS 9 — Comparative Information (Proposed amendment to IFRS 17)' published in July 2021.

We support the proposals in the exposure draft and provide recommendations in a number of areas. These regard:

  • The scope of financial assets to which the classification overlay applies;
  • the application of the expected credit loss impairment model; and
  • the disclosure of the impact of the classification overlay.

Please click to download our full comment letter here.

UK Endorsement Board (UKEB) Image

UK Endorsement Board publishes final comment letter on the IASB’s proposed narrow-scope amendment to IFRS 17

28 Sep 2021

The UK Endorsement Board (UKEB) has published its final comment letter and feedback statement on the International Accounting Standard Board’s (IASB's) Exposure Draft ED/2021/8 'Initial Application of IFRS 17 and IFRS 9 - Comparative Information (Proposed Amendment to IFRS 17)'.

In the final comment letter, the UKEB:

  • Supports the proposals in the exposure draft indicating that the classification overlay will enable insurers to increase the relevance and understandability of comparative information on transition to IFRS 17 Insurance Contracts by permitting them to avoid classification mismatches that arise purely from differences in transition requirements between IFRS 9 Financial Instruments and IFRS 17.
  • Agrees that the classification overlay should be optional and be applied on an instrument-by-instrument basis.
  • Agrees that entities should present comparative information as if the classification and measurement requirements of IFRS 9 had been applied to financial assets within the scope of the classification overlay based on reasonable and supportable information available at the transition date.
  • Supports permitting, but not requiring, entities to apply the impairment requirements in IFRS 9 to financial assets within the scope of the classification overlay.  However the UKEB recommends that the proposals in the ED be enhanced by clarifying that the chosen approach to the application of IFRS 9 impairment requirements is an accounting policy decision that shall be consistently applied in accordance with paragraph 13 of IAS 8 and is not made on an instrument-by-instrument basis.
  • Provides some recommendations to enhance the proposals in the ED including enhancements to the disclosure requirements to allow greater transparency for users of financial information.

The final comment letter and the feedback statement are available on the UKEB website.

UK Endorsement Board (UKEB) Image

UK Endorsement Board publishes its final comment letter on the IASB’s Third Agenda Consultation Request for Informtion

28 Sep 2021

The UK Endorsement Board (UKEB) has published its final comment letter and feedback statement on the International Accounting Standard Board’s (IASB's) Third Agenda Consultation Request for Information.

The UK Endorsement Board's final comment letter has been informed through desk-based research and outreach with its stakeholders.  The final comment letter recommends that the IASB:

  1. Retains sufficient flexibility in its work plan to address the interaction between IFRS and any future international sustainability standards to be developed by the International Sustainability Standards Board (ISSB).
  2. Allocates more resource to its work on digital financial reporting.
  3. Includes in its work on Standards development a structured and cohesive research programme which anticipates and addresses emerging issues.
  4. Resource the suggested priorities by pausing projects such as the Management Commentary and the Second Comprehensive Review of the IFRS for SMEs projects and rationalising the Extractive Activities project.
  5. Adds three large-scope high-priority projects to its work plan: climate-related risk, intangibles, and statement of cash flows and related matters.  The final comment letter recommends suggested scope for these projects.  It also suggests that where projects impact multiple standards, that the IASB applies a thematic approach where amendments to all relevant Standards can be addressed at once as part of the same project.

The final comment letter and the feedback statement are available on the UKEB website.

IASB speeches (blue) Image
WSS (World Standard Setters) (mid blue) Image

IASB Chair addresses WSS meeting

27 Sep 2021

IASB Chair Andreas Barckow today delivered his inaugural speech at the World Standard Setters (WSS) conference that is currently being held in a virtual format. His key topics were his first impressions in his new role as IASB Chair, the IASB's agenda for the coming years, and the relationship between the IASB and national standard setters.

Mr Barckow, who is the former president of the German standard setter ASCG, noted that his previous role had prepared him well for the new job as "technical issues are technical issues, wherever you sit". However, he also noted that working for a global standard setter means building consensus and creating standards that work globally, which would be more difficult given the wider variety of economic backgrounds and reporting challenges. Concluding his remarks on his experience in his new role, Mr Barckow noted that as IASB Chair he would surely want to "make my mark, set out my ideas and pursue my priorities", but he noted that given the enduring pandemic and its consequences on everybody's lives he counted as one of the first big successes of his chairmanship that the changeover from his predecessor Hans Hoogervorst has been effective, seamless and quiet.

Mr Barckow then turned to the IASB's agenda for the coming years and in this context noted the IASB agenda consultation and consultations and changes in general, the interaction with the new possible sister board ISSB, and intangibles. On the agenda consultation, he noted, while the Board was seeking feedback on areas of focus, on criteria for new projects and on possible new projects themselves, the IASB has an ongoing work plan based on feedback to the previous agenda consultation and also needs to allocate resources to undertake post-implementation reviews of major standards. Mr Barckow also noted that the IASB has to be mindful of how many consultations and how much change it imposes on stakeholders.

Working with a sister board, the proposed International Sustainability Standards Board (ISSB) would also require resources, as Mr Barckow explained. The necessary connectivity and joined-up standard-setting would mean that each Board commits resources and at the same time benefits from the other Board’s expertise and resources while while acknowledging each other’s independence.Mr Barckow stressed that working together and developing requirements from joint principles and concepts was, in fact, one of the key selling points for having both Boards in the same organisation.

Turning to intangibles, Mr Barckow noted that IAS 38 Intangible Assets is more than 20 years old and has never been revisited other than for consequential changes resulting from other projects while the significance of intangibles, especially self-generated intangibles, has increased substantially over the last two decades. Therefore, he stated, he would like the IASB to explore what can be done to increase transparency in this area.

Concluding his speech, Mr Barckow commented on the relationship between the IASB and national standard setters. He noted that as a result of his previous role as national standard setter he could step back and look at the IASB’s work from the perspective of a national standard setter and to identify what is working well and where the IASB can get better. And he had learned in recent years what national standard setters are able to do. Mr Barckow mentioned the many examples of excellent research and outreach by national standard setters he had seen and that he was keen to explore whether the IASB can tap into those capabilities even more. He noted:

National standard-setters are essentially the eyes and ears of the IASB. They also have valuable expertise. You will always be closer to local stakeholders, especially investors, than the IASB can ever be, no matter how much outreach we do. Furthermore, you are more likely to see issues arising in your jurisdiction far sooner and help us to resolve them before they boil up in other jurisdictions as well. You provide a very helpful interface when it comes to the IASB liaising with stakeholders from your jurisdiction — whether in conducting outreach, addressing agenda item requests that have come to the IFRS Interpretations Committee or developing educational material, to name but a few.

And this was, Mr Barckow concluded, why the relationship with national standard setters will always be an important cornerstone in the IASB's work.

Please click to access a transcript of Mr Barckow's full speech on the IASB website.

IASB (International Accounting Standards Board) (blue) Image

Updated IASB work plan — Analysis (September 2021)

27 Sep 2021

Following the IASB's September 2021 meeting, we have analysed the IASB work plan to see what changes have resulted from the meetings and other developments since the work plan was last revised in July 2021. The updated work plan shows that the request for information on the post-implementation review of IFRS 9 is to be expected this week.

Below is an analysis of all changes made to the work plan since our last analysis on 24 July 2021.

Standard-setting projects

  • Disclosure initiative — Subsidiaries that are SMEs An exposure draft was published on 26 July 2021 with comments requested by 31 January 2022; feedback received will be discussed in H1 2022; in addition, the project was renamed to Disclosure initiative — Subsidiaries without public accountability: Disclosures
  • Disclosure initiative — Targeted standards-level review of disclosures  The discussion of feedback is now expected in Q1 2022 (previously H1 2022)
  • Rate-regulated activities The discussion of feedback is now expected in October 2021 (previously Q4 2021)

Maintenance projects

  • Classification of debt with covenants as current or con-current — An exposure draft is now expected November 2021 (previously Q4 2021)
  • Initial application of IFRS 17 and IFRS 9 — Comparative Information — An exposure draft was published on 28 July 2021 with comments requested by 27 September 2021; feedback received will be discussed in October 2021
  • IAS 21 — Lack of exchangeability — The discussion of feedback is now expected in Q1 2022 (previously Q4 2021)
  • Supplier finance arrangements — An exposure draft is now expected November 2021 (previously Q4 2021)

Research projects

  • Extractive activities — A decision on the project direction is now expected in H1 2022 (previously September 2021)
  • Goodwill and impairment — A decision on the project direction is now expected in H1 2022 (previously September 2021)
  • Pension benefits that depend on asset returns Research will now be reviewed in October 2021 (previously Q4 2021)
  • Post-implementation review of IFRS 10-12 A feedback statement is now expected in Q1 2022 (previously H1 2022)
  • Post-implementation review of IFRS 9 A request for information is still expected in September 2021, which would mean "this week"

Other projects

  • Agenda consultation 2020 The discussion of feedback is now expected in November 2021 (previously Q4 2021)

The above is a faithful comparison of the IASB work plan at 24 July 2021 and 27 September 2021. For access to the current IASB work plan at any time, please click here.

FRC Image

FRC publishes frequently asked questions on International Sustainability Standards Setting

27 Sep 2021

The Financial Reporting Council (FRC) has published Frequently Asked Questions (FAQ's) on International Sustainability Standards Setting.

The objective of the FAQs is to inform UK company stakeholders of developments in sustainability standard setting by the International Financial Reporting Standards Foundation (IFRS Foundation).

The press release and the FAQs are available on the FRC website.

FRC Image

FRC to host a webinar on proposals to update and strengthen the Audit Firm Governance Code

27 Sep 2021

The Financial Reporting Council (FRC) is to host a webinar and a roundtable to discuss its consultation to update and strengthen the Audit Firm Governance Code.

The FRC published its consultation paper on its proposals to update and strengthen the UK's Audit Firm Governance Code in August 2021.

The webinar will be held on 12 October 2021 with the roundtable event on 19 October 2021.  The objective of the roundtable event is to allow stakeholders the opportunity to discuss the proposals in more detail and share views directly.  The FRC is particularly keen to hear from the following stakeholders:  

  • Investors and users of audited accounts
  • Finance Directors  
  • Audit Committee Chairs and Audit Committee Members
  • Academics

A press release which includes details of how to register for the events is available on the FRC website.

Deloitte document (mid gray) Image

We respond to the IASB's third agenda consultation

24 Sep 2021

Deloitte has responded to the request for information the IASB published in March 2021 to seek broad public input on the strategic direction and overall balance of its future work programme.

Overall, we believe that the Board’s time is appropriately allocated to the different activities and that this allocation will remain largely appropriate for the next few years. However, we believe that two key areas will require further direct attention by the Board:

  • Sustainability reporting related issues: As noted earlier, we support the IFRS Foundation continued efforts to establish a sustainability standard-setter under its institutional framework. We also noted that it will be crucial that the two Boards cooperate on fundamental elements that will be common to both Boards to ensure connectivity between financial and sustainability reporting. Amongst others, this would include work on the conceptual framework and on management commentary (beyond the project currently on the work plan of the IASB Board). We believe that the proposed projects on disclosure of intangible assets and on climate and other sustainability-related risks disclosures discussed in the request for information would also benefit from the collaboration between the Board and a future new board working on international sustainability reporting standards.
  • Digital reporting: We note that currently the time spent by the Board in this area is largely focused on taxonomy. We believe that Board should explore how digital reporting is changing the way investors consume information with a view to determine how this should be reflected in the way IFRS Standards are written. This seems to be a critical factor to consider as part of the Board’s project on improving disclosure.

Please click to download our full comment letter, which also includes a list of the key projects that we believe should be added to Board’s work plan, here.

Book badge (green) Image

Value Reporting Foundation publishes guide around transition to integrated reporting

23 Sep 2021

The Value Reporting Foundation has published a guide to help report preparers develop a custom-fit transition plan to integrated reporting.

The guide is a companion to the <IR> Framework.  Like the <IR> Framework, the guide is written in the context of private sector, for-profit companies of any size, but can also be applied by public sector and not-for-profit organizations. 

The Guide explores the basics of integrated reporting, identifies potential catalysts for change, and offers a steppingstone approach to implementation.  Specifically the guide is intended for those interested in:

  • learning the basics of integrated reporting;
  • identifying the catalyst for integrated reporting;
  • preparing for a successful transition to integrated reporting;
  • selecting a starting point for the integrated report; and
  • developing a roadmap for <IR> Framework adoption.

The press release and guide are available on the Value Reporting Foundation website.

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