The guide sets out five steps for boards of British companies to follow to ensure that their company:

1. embeds the responsibility to respect human rights into its culture, knowledge and practices;
2. identifies and understands its salient, or most severe, risks to human rights;
3. systematically addresses its salient, or most severe, risks to human rights and provides for remedy when needed;
4. engages with stakeholders to inform its approach to addressing human rights risks; and
5. reports on its salient, or most severe, human rights risks and meets regulatory reporting requirements. 

A pdf version of the guide can be obtained from the Equality and Human Rights Commission website.

The GSSB is currently working on transitioning the G4 Guidelines into a new set of modular, interrelated GRI Standards that can then be updated individually and indepent of each other to ensure that the standards will remain relevant in today’s rapidly-evolving sustainability reporting landscape.

The second set of exposure drafts comprises 30 topic-specific draft standards each covering a separate sustainability topic such as anti-corruption, emissions, biodiversity, or child labor. They are open for comment until 17 July 2016. Please click to access the exposure drafts and a corresponding press release on the GRI website.

The eight new proposed IVS are:

• IVS 101 Scope of Work,
• IVS 102 Investigation and Compliance,
• IVS 103 Reporting,
• IVS 200 Businesses and Business Interests,
• IVS 300 Plant and Equipment,
• IVS 400 Real Property Interests,
• IVS 410 Development Property, and
• IVS 500 Financial Instruments.

The exposure drafts can be accessed through the press release on the IVSC website and are open for commnt until 31 August 2016.

The earlier exposure drafts published in April can also still be commented on (until 7 July 2016).

FRS 102 explicitly states that where a loan agreement contains a provision requiring the borrower to compensate the lender for early repayment in the event that the current market interest rates are lower than the fixed rate specified in the agreement, this does not stop the loan from being classified as ‘basic’.  As well as including such provisions, in the social housing sector, loan agreements can also include provisions for the lender to pay the borrower should the market interest rate be above the fixed rate in the agreement. 

FRS 102 does not specifically address this latter scenario and there are divergent views on whether such loans can be classified as ‘basic’.  The FRC accepts that “FRS 102 does not explicitly address every transaction, other event or condition that an entity may need to account for, and preparers and auditors will need to apply judgement in the application of FRS 102” and highlights that this might lead to diversity in practice in certain areas.  It concedes that in certain circumstances, different interpretations of the standard might occur and indicates that “the classification of loans with two-way compensation clauses appears to be one such case”. 

Concluding the FRC comments:

In relation to this specific issue, the FRC notes that diversity in practice may arise and reminds preparers that FRS 102 (paragraph 8.6) requires disclosure about judgements that have had a significant effect on the amounts recognised in the financial statements. Looking forward, the FRC is starting work on the triennial review of FRS 102, and expects to reconsider the conditions in paragraph 11.9 as part of that process. As well as considering this compensation clause, this will also include consideration of any other issues raised in relation to the application, in practice, of paragraph 11.9. As a result any amendments will reflect wide experience of applying FRS 102. The FRC expects to consult on any proposed amendments early in 2017, which would be effective from 1 January 2019, although early application may be available.

The press release is available on the FRC website.

In the paper the ICAEW provides a review of the current state of the assurance market and invites comments on five propositions on where and how it feels assurance should be taken next.

The propositions, which are expanded upon in the paper, are:

1. Rather than focusing on the annual report – or any other single report of an organisation – we should think about the right way to use assurance to meet the needs of the organisation itself.
2. The role of the board in determining the need for assurance, internally and externally, is vital to understanding the future of assurance.
3. Getting the right assurance in the right place is essential. This means asking the right questions about risks and information flows, and in a complex organisation it means keeping track of the situation with an assurance map.
4. Assurance can be provided over risk disclosures or forward-looking information, even if the question asked is different from ‘is this true and fair?'.
5. Assurance can add value to narrative information using current principles and techniques, and the skilled judgement of preparers and assurance providers.

Comments on the paper are invited until 22 July 2016.

The thought leadership paper and details of how to comment are available on the ICAEW website.

EFRAG received eight comment letters in response to its discussion paper, which covered the following topics:

According to the feedback statement:

All respondents shared concerns about the relevance of the statement of cash flows for financial institutions and thus were supportive for the EFRAG’s proactive initiative. However, the views on how this issue should be addressed diverged significantly among respondents. Nevertheless the comments received provide valuable inputs for further research.

The feedback statement is available on EFRAG's website.

This Statement of Protocols builds upon the protocol arrangement issued by the same organisations in September 2013 by outlining objectives for each of the following interactions between IOSCO and the IFRS Foundation:

• Strategic discussions — Discussion of broad financial reporting issues between the leadership of IOSCO and the IFRS Foundation;
• Development of IFRS Standards — Sharing of information and active contribution from IOSCO to the standard-setting process; and
• Implementation of IFRS Standards — Sharing information to support both parties in their work in the application of IFRS Standards on a globally consistent basis.

For more information, see the press release and Statement of Protocols on the IASB's website.

In his opening remarks, the candidate, Mr Jean-Paul Gauzès, described the role as EFRAG president as he saw it as one of liaison and reflection. He stressed that that the European Union does not have its own standard-setter and therefore has to make its voice heard directly and prominently with the IASB to make sure IASB standards do not conflict with European regulations and needs.

Mr Gauzès hearing was rather a home game - he is a former member of the ECON and stressed that the EP voice needs to be given more consideration. He offered regular meetings with ECON to discuss technical matters and praised the ECON report on current accounting standard-setting. He stated that the new EFRAG leadership "won't be held captive by previous practice" and admitted that while EFRAG is a body to advise the European Commission "the institution close to my heart is the EU Parliament". In response, the ECON congratulated itself that the fact that a former ECON member was proposed as EFRAG president showed the wisdom the European commission and growing influence of the EP and asked the candidate to reverse the role where EFRAG was an advocate of the IASB standard-setting to one where the IASB would listen to EFRAG.

On technical issues, the hearing briefly touched on IFRS 9, prudence, simplifications for SMEs, and the financial crisis. However, Mr Gauzès stressed that technical matters should be discussed in the regular meetings he offered.

In the final vote, 36 ECON members voted for the candidate, 5 against and 2 abstained.

The European Parliament has issued a press release and the recording of the session is available here (hearing begins at 17:49h, please note that you can choose the language you want to listen in).

As well as seeking to understand the current practice of human capital reporting, the research sought to understand whether the 2014 Financial Reporting Council (FRC) Guidance on the Strategic Report had improved current practice.  Analysis was performed of the annual reports of FTSE 100 companies in both 2013 and 2015.  The analysis performed was of key human capital terms included within the annual reports.  Key human capital elements were grouped together under the categories of: knowledge, skills and abilities (KSA), human resource development (HRD), employee welfare/stability and employee equity.   

To understand whether those companies were reporting human capital issues accurately within their annual reports, a comparison was made between the narrative reported in the annual reports and any human capital issues that might have been reported in the media.

Key findings show:

• There has been an “overall increase” in the reporting of human capital issues particularly in the area of human resource development. 
• Specifically there was a 127% increase in human rights reporting under the employee equity heading.
• Within KSA the two largest increases were the key terms of ethics (22%) and employee well-being (21%).
• In the employee equity category, equality had increased by 34% and diversity by 29%.
• Companies working in the areas of property and recreation saw largest increases in human capital reporting.
• The review of the media highlighted that whilst some company’s annual reports were referring to stories appearing in the media others left out important details or did not report adverse incidents at all.
• There was “clear evidence” that companies are focusing on workforce and succession planning and the research indicates that there were good practice examples in this area.
• Companies are attaching a “high importance” to illustrating how they care for the well-being of their employees.  Findings also highlighted that many companies are focused on understanding the capabilities of their workforce and “frequently” illustrate in their reports how their approach to skills development is linked to risk issues such as skills shortages.

The report concludes that overall the quantity and quality of human capital reporting has increased across FTSE 100 companies between 2013 and 2015.  The report also concludes that “the majority of FTSE 100 companies are doing more than simply fulfilling their statutory duties in terms of reporting”.   However the report does warn that even though there has been an improvement in reporting, investors might still struggle to make informed decisions based upon the information reported.  It highlights: 

Even though it would appear that there has been an overall increase in HC reporting, it is debatable whether investors and other stakeholders will be able to make informed decisions based on what are, on the whole, generally positive reports on a variety of HC issues.

The report recommends that companies continue to focus on the reporting of human capital issues but seek to adopt a “broadly consistent terminology to describe human capital items” as this would allow easier comparison between companies.  However, the report is clear that this does not mean a boilerplate approach to reporting.

A press release is available on the CIPD website.  The full report, Valuing your Talent: Illustrating your company’s true value, is available on the Valuing your Talent website.

Companies with total consolidated group revenue of at least €750 million will be required to report information, detailed country-by-country, on revenues, profits, taxes paid, capital, earnings, tangible assets and the number of employees. 

The information must be reported for the first time for the 2016 fiscal year.  Information must be reported to the tax authorities of the member state where the group’s parent company is tax resident.  If the parent company is not EU tax resident there is an option to disclose information through “secondary reporting” via its EU subsidiaries.  Such “secondary reporting”, although optional for the 2016 fiscal year, will be mandatory from 2017 onwards.

The reports will have to be filed within 12 months of the end of the relevant fiscal year.

Note that the directive is related to tax information exchange between competent tax authorities and reporting by companies to those tax authorities.  It is different to proposals made by the European Commission in April to require large multinationals to report publicly on the tax that they pay and where they pay it

Click for press release and directive on the European Council website.