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February 2024 ISSB meeting notes posted

29 Feb, 2024

The ISSB met in New York on 21 February 2024. We have posted our comprehensive Deloitte observer notes for all projects discussed during the meeting.

The following topics were discussed:

Supporting implementation of IFRS S1 and IFRS S2: The ISSB discussed focus areas for educational material that the staff is currently developing to support the implementation of IFRS S1 and IFRS S2. The focus areas for the discussion were: using ISSB standards to prepare sustainability-related financial disclosures; definition of material information; sustainability-related risks and opportunities; and information that is material might change over time. No decisions were made.

ISSB consultation on agenda priorities: The ISSB decided to proceed with the criteria for assessing the priority of new research and standard-setting projects that could be added to the ISSB’s work plan. The ISSB voted to modify the criterion on how a potential project would relate to other projects in the work plan to incorporate the concept of interoperability (i.e. consider the work of other standard-setters).

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

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FRC launches a review of the 2020 UK Stewardship Code

29 Feb, 2024

The Financial Reporting Council (FRC) has launched a review of the 2020 UK Stewardship Code (the Code) to ensure it supports growth and the UK's competitiveness.

The Code was last revised in 2019 and, following feedback received during the 2023 consultation on the UK Corporate Governance Code, it became apparent that now was the right time for a fundamental review of the Code.

The review will focus on, amongst other topics, the extent to which the Code:

  • supports long term value creation through appropriate investor-issuer engagement that drives issuers’ prospects and performance;
  • creates reporting burdens on issuers as well as Code signatories; and
  • has led to any unintended consequences, such as short-termism in targets and outlook for issuers.

The review will be undertaken in three phases:

  • Phase 1 - targeted outreach, focussed around the four main groups affected by the Code’s principles and application – issuers, asset managers, asset owners and service providers, on the topics outlined above. 
  • Phase 2 - public consultation which is planned to launch after the 2024 AGM voting season during the summer.
  • Phase 3 - publication of the revised Code which is expected in early 2025.

The current Code will operate as usual throughout the review process, with existing signatories required to submit their renewal application to remain a signatory. Once the revised Code is updated, the FRC will set out a clear implementation pathway and ensure the effective date allows current signatories sufficient time to respond to any changes.

Please click here for more information on the FRC website.

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February 2024 IASB meeting notes posted

27 Feb, 2024

The IASB met in London on 19-22 February 2024. We have posted our comprehensive Deloitte observer notes for all projects discussed during the meeting.

The following topics were discussed:

Work plan: The staff gave an oral update on the forthcoming IFRS 19 Subsidiaries without Public Accountability: Disclosures.

Equity method: The IASB decided to clarify several matters arising from its tentative decisions and to propose amendments to IFRS Accounting Standards. The IASB also decided which of the disclosure requirements to be proposed in the future exposure draft will also be proposed as amendments to the forthcoming IFRS 19.

Second comprehensive review of the IFRS for SMEs standard: The IASB made decisions on the proposals in the ED Third edition of the IFRS for SMEs Accounting Standard on Section 9 Consolidated and Separate Financial Statements, Section 19 Business Combinations and Goodwill and Section 23 Revenue from Contracts with Customers.

Maintenance and consistent application: The IASB confirmed the proposed amendments in exposure draft Annual Improvements to IFRS Accounting Standards—Volume 11. The IASB also discussed its project on use of a hyperinflationary presentation currency by a non-hyperinflationary entity (IAS 21), and made decisions on the disclosure and transition requirements.

Post-implementation review (PIR) of IFRS 9—impairment: The IASB considered the feedback received in response to its request for information Post-implementation Review—IFRS 9 Financial Instruments—Impairment. The IASB made decisions on the two overarching areas of the impairment requirements—the general approach to recognition of the expected credit loss (ECL) and determining significant increases in credit risk (SICR).

PIR of IFRS 15 Revenue from Contracts with Customers: The IASB considered the feedback received in response to its request for information Post-implementation Review—IFRS 15 Revenue from Contracts with Customers. The IASB made decisions with regard to identifying performance obligations in a contract, principal versus agent considerations and licensing.

Power purchase agreements: The staff provided an update on the project and outlined the next steps for the project.

IFRS 9 amendments to classification and measurement: The IASB made decisions on the disclosure requirements relating to contractual terms that could change the contractual cash flows of financial assets and financial liabilities not measured at fair value through profit or loss; and the effective date and transition requirements for the final amendments. The IASB also gave permission to begin the balloting process for the final amendments and decided which of the new or amended disclosure requirements should apply to subsidiaries without public accountability.

Rate-regulated activities: The IASB made decisions on the proposals in the exposure draft Regulatory Assets and Regulatory Liabilities, in particular on the boundary of a regulatory agreement, amendments to IAS 36 and disclosure.

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

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IFRS Foundation releases summary of national standard-setters' research on materiality judgement guidance

27 Feb, 2024

The IFRS Foundation has issued a comprehensive summary that compiled evidence from national accounting standard-setters concerning the impact of guidance on materiality judgements within IFRS Accounting Standards and related materials.

Materiality judgement demands that companies assess whether information could reasonably influence investor decisions.

In 2017 and 2018, the IASB's refined the definition of materiality and furnish guidance along with case studies to facilitate informed judgements. In 2022, the IFRS Foundation issued a call for research as it was seeking to partner with national standard-setters to gather research and information related to the changes and additions to the IASB’s literature on making materiality judgements. 

The findings of the research underscored a robust understanding of materiality's concept. While utilisation of the 2017 and 2018 guidance exhibited disparities across regions, where implemented, it proved beneficial. Moreover, the research advocates for sustained efforts to raise awareness among stakeholders regarding the available guidance. Looking ahead, the IASB remains committed to providing further assistance to companies navigating materiality judgements, with insights from its research poised to influence ongoing discussions, including those within projects such as the initiative regarding climate-related and other uncertainties in the financial statements.

The national standard-setters taking part in the research initiative, working in partnership with academics from their jurisdictions, are from Australia, Botswana, China, Malaysia, Mexico and New Zealand.

Please click to access the research summary on the IFRS Foundation website.

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ISSB publishes February 2024 podcast

27 Feb, 2024

The ISSB has released a podcast hosted by ISSB Chair Emmanuel Faber and Vice-Chair Jingdong Hua discussing the latest developments from the ISSB.

The podcast discusses the following:

For more information and access to the podcast, please see the press release on the IFRS Foundation website.

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IOSCO Chair speaks on adoption of the ISSB standards

27 Feb, 2024

In a speech at the IFRS Sustainability Symposium on 22 February 2024, Jean-Paul Servais, Chair of the International Organization of Securities Commissions (IOSCO), highlighted the role of jurisdictions in the adoption of the ISSB standards.

In the speech, Mr Servais said that after the publication of the ISSB standards and their endorsement by IOSCO, it is now up to jurisdictions to consider ways in which they will adopt, apply or be informed by the ISSB standards in their own local settings. In his view, these jurisdictional decisions on adoption will determine how entities behave and whether global comparability of sustainability reporting can be achieved. He pledged that IOSCO will play its role in assisting jurisdictions as they consider implementing the ISSB standards.

He also acknowledged the ongoing efforts of the ISSB to develop an adoption guide to support jurisdictions in their implementation considerations of its standards, as well as to provide educational materials to help entities in applying the standards.

Please click to access the full text of the speech on the IOSCO website.

 

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March 2024 IFRS Interpretations Committee meeting agenda posted

26 Feb, 2024

The IFRS Interpretations Committee has posted the agenda for its next meeting, which will be held on 5 March 2024.

The Committee will discuss the following:

  • IAS 37 Pro­vi­sions, Con­tin­gent Li­a­bil­i­ties and Con­tin­gent Assets: Cli­mate-re­lated Com­mit­ments
  • IFRS 3 Business Combinations: Payments Contingent on Continued Employment during Handover Periods
  • Post-implementation Review of IFRS 9 Financial Instruments — Impairment
  • Ad­min­is­tra­tive matters

The full agenda for the meeting can be found here. We will post any updates to the agenda, our com­pre­hen­sive pre-meet­ing summaries as well as observer notes from the meeting on this page as they become available.

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Agenda for the February 2024 DPOC meeting

26 Feb, 2024

The Due Process Oversight Committee (DPOC) will meet on 27 February 2024 in Madrid, Spain.

The agenda for the DPOC meeting is sum­marised below.

Tuesday, 27 February 2024

  • In­tro­duc­tion
  • Monitoring compliance with due process
    • IASB technical activities
    • Due process lifecycle review of the development of IFRS 19
    • ISSB technical activities
    • Report on material to support the application of ISSB Standards
  • Other DPOC matters
    • Proposed composition of the IFRS Taxonomy
      Consultative Group
    • DPOC correspondence — update since papers distributed
    • Summary

Agenda papers for the meeting are available on the IFRS Foun­da­tion's website.

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FRC publishes updated list of successful signatories to the UK Stewardship Code

26 Feb, 2024

The Financial Reporting Council (FRC) has published an updated list of successful signatories to the UK Stewardship Code (the Code) which sets high standards of stewardship for those investing money on behalf of UK savers and pensioners.

The updated list includes 1 new signatory, taking the total number of signatories to 273, with assets under management (AUM) of £43.3tn.

The FRC has also published a short document, collating previously published guidance, which aims to help signatories and applicants to the Code prepare a fair, balanced and understandable stewardship report to submit in 2024.

Further information is available on the FRC website

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IFAC and AICPA & CIMA study observes more detail in sustainability reporting

23 Feb, 2024

The International Federation of Accountants (IFAC), together with AICPA & CIMA, has published an update to its study on the sustainability reporting and assurance practices of the largest global companies. The study reveals that there is now more detail and breadth in these companies' sustainability reporting.

The study, which is an annual benchmark that has now been updated for 2022 data, also shows that the companies included in the study are obtaining a greater scope of assurance on their sustainability disclosures. In detail, the study finds that 98% of companies reported some level of detail on sustainability with 69% obtaining assurance on at least some of their sustainability disclosures.

The study also found that companies are still using a mix of reporting standards, which, according to the press release, makes it challenging for investors, lenders and other stakeholders to find consistent and comparable sustainability information. The study therefore identifies a need for entities worldwide to move toward a global system of sustainability disclosure requirements.

For more information, including access to the study, please see the press release on the IFAC website.

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