The topics discussed at the meeting included:

• IASB and ISSB update
• Financial Instruments with Characteristics of Equity
• Post-Implementation Review of IFRS 9 — Impairment

The meeting summary is available on the IFRS Foundation’s website.

The report focuses on IFRS Accounting Standards and does not consider sustainability reporting standards such as the European Sustainability Reporting Standards (ESRSs) or standards issued by the International Sustainability Standards Board (ISSB).

According to the report, minor amendments in the following areas would have positive implications for financial stability:

• The application of the materiality principle in IAS 1 may need to be enhanced, as even if the transaction involved is immaterial in quantitative terms, user expectations or peer practice may justify information on it
• The addition of climate factors to the list of indicators of impairment of non-financial assets in IAS 36
• How provisions and contingent liabilities should be recognised according to IAS 37 in view of climate-related risks
• Additional disclosure requirements, examples and guidance on how climate-related risks should be incorporated into the estimation of expected credit losses and the fair value of financial instruments.

In addition, the ESRB recommends that the IASB prioritise the work on pollutant pricing mechanisms. This project is currently on the IASB's reserve list.

For access to the full report, please see the ESRB website.

The IFRS Accounting Standards 2024 — Issued publication contains the Standards as approved by the International Accounting Standards Board for issue up to 31 December 2023. These Standards include changes that are not yet required at 1 January 2024. The IFRS Accounting Standards 2024 — Issued Annotated includes the same content as IFRS Accounting Standards 2024, but with additional annotations containing extensive cross-references, explanatory notes and IFRS Interpretations Committee agenda decisions.

The books are available in electronic format to IFRS Digital subscribers through the IFRS Accounting Standards Navigator. Printed copies of the books are available for sale through the IFRS Foundation's web shop.

The podcast is hosted by IFRS IC Chair and IASB member Bruce Mackenzie. Topics discussed include two finalised agenda decisions about climate-related commitments (IAS 37) and payments contingent on continued employment during handover periods (IFRS 3).

The IASB has also published a short video that explains how the IFRS IC helps maintain and support consistent application of IFRSs, what happens when the IFRS IC receives an application question; and how it works with the International Accounting Standards Board (IASB).

Please click to access the podcast and the video via the press release on the IFRS Foundation website.

ASAF was set up in 2013 to formalise and streamline the relationships between the IFRS Foundation and IASB with representatives from across the standard-setting community, in order to bring important regional perspectives to the IASB's technical work and to offer feedback on the most important issues of the day.

The ASAF was originally comprised of 12 members and a non-voting chair (being the IASB chair or vice-chair). The number of members will now be increased to 12-16 members given the more widespread knowledge about and application of IFRS accounting standards. They will be sourced from the following geographical regions:

• Africa: 1 member
• Americas (North and South): 3 members
• Asia/Oceania: 3 members
• Europe (including non-EU): 3 members
• World at large*: up to 6 members

* subject to maintaining overall geographical balance.

Membership of the ASAF is open to all recognised accounting standard-setters of jurisdictions and regional bodies. Existing ASAF members are eligible for reappointment.

The closing date for applications is 30 June 2024. 

Please click for more information in the press release on the IFRS Foundation website.

ED 88 Arrangements Conveying Rights over Assets proposes amendments to IPSAS 47 Revenue and IPSAS 48 Transfer Expenses. The proposed amendments to IPSAS 47 are consistent with the principles already exposed in ED 84 Concessionary Leases and Right-of-Use Assets In-kind (Amendments to IPSAS 43 and IPSAS 23) that were strongly supported by stakeholders. Additionally, ED 88 proposes illustrative examples to accompany IPSAS 47 and IPSAS 48 on other types of arrangements conveying rights over assets that are common in the public sector. Feedback to both ED 88 and ED 84 will inform the final pronouncement on other lease-type arrangements.

Comments on the exposure draft are requested by 31 May 2024. Please click for additional information and access to the drafts in the press release on the IPSASB website.

The new members will initially serve a five-year term with the pos­si­bil­ity of being renewed for another three years. Nom­i­na­tions for IASB board mem­ber­ship close on 31 May 2024. For more in­for­ma­tion, see the press release on the IASB’s Web site.

Trustees’ re­spon­si­bil­i­ties include oversight of the organisation in the public interest, its strategic direction, ap­point­ments to the IASB, the ISSB, the IFRS In­ter­pre­ta­tions Committee and the IFRS Advisory Council, and ensuring the financing of the organisation and approving its budget. Trustees are expected to engage with the markets in their regional ju­ris­dic­tion.

Please click for ad­di­tional in­for­ma­tion in the press release on the IFRS Foun­da­tion website.

Background

In September 2022, the International Accounting Standards Board (IASB) published the exposure draft of a third edition of the IFRS for SMEs accounting standard. For this exposure draft, the IASB had considered alignment with full IFRS Accounting Standards that are effective on or before 1 January 2020. Nevertheless, during the redeliberation of the proposals in the exposure draft, the IASB also looked at all amendments to full IFRSs with an effective date after 1 January 2020 to see whether any of these would warrant inclusion in the final amendments.

At its meeting in October 2023, the IASB decided to include the amendments to full IFRSs for supplier finance arrangements and lack of exchangeability. As these amendments had not been part of the original exposure draft and as the IASB wanted the public to be able to comment on these amendments before including them in the third edition of the IFRS for SMEs, the IASB decided to develop an addendum to the original exposure draft that would be exposed for public comment prior to finalising the amendments.

Suggested changes

The proposed amendments in exposure draft IASB/ED/2024/2 Addendum to the Exposure Draft 'Third edition of the IFRS for SMEs Accounting Standard' are:

Alignment with IAS 7 as amended by Supplier Finance Arrangements

The IASB proposes that an SME would disclose the following information about its supplier finance arrangements:

• the terms and conditions - aggregated, but with separate disclosure of the terms and conditions of supplier finance arrangements that are dissimilar;
• at the beginning and end of the reporting period for reportable supplier finance arrangements:
  • the carrying amounts of the financial liabilities and where they are included in the statement of financial position,
  • the carrying amounts of the financial liabilities for which suppliers have already received payment from the finance providers; and
  • the range of payment due dates of the financial liabilities compared to trade payables that are not part of a supplier finance arrangement; and
• the type and effect of non-cash changes in the carrying amounts of the financial liabilities.

Alignment with with IAS 21 as amended by Lack of Exchangeability

The IASB proposes to amend the IFRS for SMEs:

• to specify when a currency is exchangeable into another currency;
• to set out the factors an SME would need to consider when assessing whether a currency is exchangeable and to specify how those factors affect the assessment;
• to specify how an SME determines the spot exchange rate when a currency is not exchangeable into another currency; and
• to require an SME to disclose information that would enable users of its financial statements to understand the effects of a lack of exchangeability.

Comments on the proposed changes are requested by 31 July 2024.

Effective date

The IASB proposes that the amendments have the same effective date as the other amendments to the IFRS for SMEs. 

Additional information

Please click for:

• IASB press release
• Access to the exposure draft on the IFRS Foundation website
• Our UK Accounting Plus project page for the Second comprehensive review of the IFRS for SMEs
• Our related Need to know publication

As the FRC continues its work to restore public trust and confidence in audit, corporate reporting and governance, while embedding its remit to support UK economic growth and competitiveness, the Plan and Budget sets out how it intends to deliver on its strategic priorities.

The five strategic objectives of the FRC will remain unchanged and, in 2024-25, the FRC will particularly focus on the following areas highlighted in its new remit letter:

• Embedding its growth duty into its decision-making processes wherever this is not clear.
• Finalising work associated with its review of the UK Corporate Governance Code and its associated guidance.
• Commencing a full review of the Stewardship Code.
• Building on improvements in audit quality where they have been achieved, including in its role as shadow System Leader for local authority audit. The FRC will also support challenger and smaller audit firms to deliver better audit quality alongside their ambitions to scale in size and scope.
• Supporting the simplification and streamlining of corporate reporting by continuing its close engagement with the government on its review of non financial reporting requirements.
• Making the UK’s sustainability reporting framework world-class through its work with international standard setters and other regulators, and in its role as secretariat to the UK Sustainability Advisory Committee.
• Continuing its actuarial work and engagement with all parts of the pensions system in support of reliable and consistent pension projections.

The Plan and Budget provides details of the priorities and key deliverables of each of the FRC's five divisions (Regulatory Standards, Supervision, Enforcement, Corporate Services and CEO division) which highlight how the FRC intends to deliver on the above Government priorities set out in its new remit letter.  It also covers the operational requirements and resourcing of the FRC and the UK Endorsement Board (UKEB) and sets out targets to measure success.

In 2024-25 the FRC will pause planned further growth due to delays to legislation which would have given the FRC a broader remit and new powers and will instead prioritise existing resources.  The combined budgeted cost of the FRC and the UKEB is also set to increase to £71.5m from £66.3m in the prior year as set out in the proposed expenditure and funding budget.

During 2024-25 the FRC has signalled its intention to undertake a full review of its strategy and objectives, with a view to subsequently publishing a 3-year strategy, supplemented each year with an annual plan and budget.

A press release and the Plan and Budget 2024-25 are available on the FRC website.