The following topics are on the agenda:

Sources of guidance to identify sustainability-related risks and opportunities and disclosures

The staff recommend that the ISSB amend the references to ‘other standard-setting bodies whose requirements are designed to meet the needs of users of general purpose financial reporting’ and ‘entities that operate in the same industries or geographies’ to state that preparers may consider such sources, both in the identification of sustainability-related risks and opportunities and in the identification of disclosures about those risks and opportunities, but that such consideration is not a requirement. The staff also recommend that the ISSB amend the sources of guidance to explicitly state that preparers may consider the GRI Standards and ESRS to identify disclosures about sustainability-related risks and opportunities that meet the objectives of [draft] S1.

Effective date

The staff recommend that the ISSB require both IFRS S1 and IFRS S2 are effective for annual reporting periods beginning on or after 1 January 2024. The staff also recommend that the ISSB confirm that early application of IFRS S1 and IFRS S2 is permitted, but only if an entity applies both IFRS S1 and IFRS S2 at the same time. An entity would be required to disclose that it applies IFRS S1 and IFRS S2 early. ISSB members are also asked to vote on the staff recommendation related to the applicable timing of the transitional relief from the requirement for an entity to report their sustainability-related financial disclosures at the same time as their financial statements; from the requirement for an entity to measure Scope 1, Scope 2, and Scope 3 emission in accordance with the GHG Protocol Corporate Standard, when they are doing so for the first time by applying IFRS S2; and from the requirement for an entity to disclosure its Scope 3 GHG emissions.

Due process and permission to ballot

In this session, the staff will summarise the due process steps undertaken throughout the General Sustainability-related Disclosures and the Climate-related Disclosures projects and ask the ISSB if it is satisfied that the mandatory due process steps have been met in finalising redeliberations of the [draft] S1 and [draft] S2. The staff will also request permission for the staff to begin the balloting process for IFRS S1 and IFRS S2 and ask whether any ISSB member intends to dissent from the publication of IFRS S1 or IFRS S2. 

Our pre-meet­ing summaries is available on our February meeting notes page and will be sup­ple­mented with our popular meeting notes after the meeting.

The Board will discuss the following:

• Maintenance and consistent application
• Post-implementation review of IFRS 9 — Impairment
• Rate-regulated activities
• Dynamic risk management
• Financial instruments with characteristics of equity
• Business combinations — Disclosures, goodwill and impairment

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.

FRED 82 was issued in December 2022.

To support its review, the FRC will be holding a series of roundtables to discuss the proposals in more depth with stakeholders to help inform responses to the consultation.

The rountables will cover both general topics as well as subject specific topics related to revenue and lease accounting. 

Further details and informaion on how to register for the meeting are available on the FRC website.

Main theme of the conference was the relation between academic research and standard-setting and, especially, how academics and their research can contribute to post-implementation reviews.

A recording of the one-hour chat is now publicly available. (Please note that the first eight minutes of the recording are a general introduction of the conference followed by a further five minutes of introduction of the speakers.)

The webinars were:

• Part 1: Better information for better decisions — Introduction to investor-focused sustainability disclosure
• Part 2: Any size or stage — Getting started on climate disclosure
• Part 3: Connectivity and controls — The path to investor-grade disclosure

Recordings of the webinars as well as the supporting slides are now available on the IFRS Foundation website.

In November 2022, the IFRS Interpretations Committee came to the conclusion not to take onto the Committee’s agenda a request about how to assess whether a contract contains a lease.

While we agree with the decision as regards the first issue (the level at which to evaluate whether a contract contains a lease), we have concerns regarding the second issue (how to assess whether a contract contains a lease when the supplier has particular substitution rights).

Please click to download our full comment letter here.

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.

The update reports on the EFRAG Financial Reporting Board (EFRAG FRB) webcast meeting on 27 January 2023, the EFRAG Financial Reporting Technical Expert Group (EFRAG FR TEG) webcast meetings on 18 and 19 January 2023 and the joint physical meeting of the EFRAG FR TEG and EFRAG Sustainability Reporting Technical Expert Group (EFRAG SR TEG) on 17 January 2023.

The update also lists EFRAG publications issued in January including:

• EFRAG's Final Endorsement Advice Letter relating to its due process regarding Lease Liability in a Sale and Leaseback (Amendments to IFRS 16)
• EFRAG's Draft Comment Letter in response to the IASB's
  Exposure Draft 2023/1 International Tax Reform - Pillar Two Model Rules (Proposed Amendments to IAS 12)
• EFRAG and ICAS's Academic Study: Do companies disclose relevant information about intangibles? – insights from business model reporting and risk reporting
• EFRAG and ICAS's Academic Study: The theory and practice of discounting in financial reporting under IFRS

The update also covers EFRAG's sustainability reporting and related activities.

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

The following topics were discussed:

Maintenance and consistent application

The IASB deferred the final decisions on its project on Supplier Finance Arrangements to the February meeting. The staff recommended that entities be required to apply the amendments for annual reporting periods beginning on or after 1 January 2025, with earlier application permitted. However, some IASB members preferred an earlier effective date. 

Equity Method

IFRS 10 requires that when a parent loses control of a subsidiary it recognises a gain or loss. However, if the subsidiary is sold to an associate or joint venture of the parent, IAS 28 requires that the gain be limited to the  extent of the unrelated investors’ interests. This is perceived as a conflict. The IASB discussed four ways of addressing the issue and decided to continue exploring two of the alternatives in a future decision-making session.

Business Combinations—Disclosures, Goodwill and Impairment

In September 2022, the IASB tentatively decided to exempt entities from some disclosure requirements but did not establish the conditions for that exemption. The IASB decided that the exemption be based on whether disclosing the information could be expected to prejudice seriously any of the entity’s objectives for a business combination. Application guidance would set out the factors that would need to be considered when assessing if the exemption applies and entities would need to disclose the reason for applying the exemption.

The IASB also decided that, subject to the proposed exemption, an entity be required to disclose quantitative information about total expected synergies disaggregated by nature (e.g. total revenue, total cost synergies), when the synergistic benefits are expected to start, and how long they are expected to last.

Primary Financial Statements

The IASB decided:

• Disaggregation: not requiring disaggregation of material information in relation to information about the nature of operating expenses that are included in a function line item in the statement of profit or loss; clarify the requirements for how disaggregated amounts are labelled (described); add a requirement that any line items presented in the statement(s) of financial performance and the statement of financial position must be recognised and measured in accordance with IFRS Accounting Standards but not prohibit the disaggregation of income and expenses in the notes to the financial statements into components not recognised and measured in accordance with IFRS Accounting Standards; and extend the proposals in the ED for the label ‘other’ to be used only if no more informative label can be found
• Comprehensive income: withdraw the proposal to relabel the two categories of other comprehensive income as remeasurements permanently reported outside profit or loss and income and expenses to be included in profit or loss in the future
• Statement of cash flows: confirm that entities other than entities with specified main business activities classify interest received as cash flows arising from investing; and confirm that entities with specified main business activities classify dividends received (other than dividends received investments accounted for using the equity method), interest paid and interest received in a single category of the statement of cash flows (either as cash flows from operating, investing or financing activities)

IFRS Accounting Taxonomy

In November 2022, the IASB published the Proposed IFRS Taxonomy Update—Lease Liability in a Sale and Leaseback and Non-current Liabilities with Covenants. The purpose of this meeting was to summarise the feedback received on the PTU and set out the next steps in the publication of the Update. As a next step, the IASB will begin the balloting process for these updates.

Disclosure Initiative—Subsidiaries without Public Accountability: Disclosures

The IASB decided to proceed with the proposal to include reduced disclosure requirements for IFRS 1. The IASB also decided that when an eligible subsidiary that elects, revokes an election or is no longer eligible to apply the Standard, it does not apply the requirements in IAS 8 on changes in accounting policies. Neither is it required to present a third statement of financial position. Finally, the IASB confirmed its proposal to consider amendments to the Standard when it publishes an exposure draft of a new or amended IFRS Accounting Standard.

An analysis of how the IASB’s work plan has changed as a result of the meeting is available here.

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

The FRC first published its Statement of Intent on ESG in 2021.  In it the FRC identified underlying challenges with the production, audit and assurance, distribution, consumption, supervision and regulation of ESG information.  

The update sets out areas of ongoing challenges with ESG reporting, actions to address these, and the FRC's planned activities in this area.  It also sets out a number of initiatives that have been undertaken by the FRC to support its wide range of stakeholders in driving high-quality and comparable ESG reporting and disclosure.  

Looking forwards, the FRC’s key areas of focus regarding ESG reporting during 2023 will include projects and thematics on:

• ESG Data - how and where to find it and use it effectively
• Materiality disclosures – what should be considered when determining what are material issues?
• Support for FRS 102 preparers
• What are the ESG reporting requirements of the Corporate Governance Code?
• The link between investors and ESG reporting

A press release and the updated Statement of Intent on ESG is available on the FRC website.