The FRC is making five immediate changes to reduce the reporting burden on existing signatories. These reporting changes will apply for the next application window being 31 October 2024. The changes are:

• Removal of the requirement to annually disclose all ‘Context’ reporting expectations, except for new reports or material changes.
• Removal of the requirement to annually disclose against ’Activity‘ and ’Outcome‘ reporting expectations for certain Principles.
• To explicitly allow use of content from previous reporting and cross-referencing of such reports.
• To set clear expectations of what is considered an ‘outcome’ for stewardship purposes.
• To emphasise that reporting against Principles 10, collaborative engagement, and 11 escalation can occur ‘where necessary’.

The FRC has also announced that, following stakeholder engagement, it will focus on five themes in the Code’s revision as follows:

• Purpose – The FRC will consider all stakeholder views and set out its expectation of what defines effective stewardship, what this looks like in practice, and how reporting against the Code can help to deliver this.
• Principles – The FRC is considering what reporting will be necessary to deliver on a renewed purpose of the Code.
• Proxy Advisors – The FRC will carefully consider how the Code might support greater transparency of their activities.
• Process – The FRC will take forward proposals to reduce the reporting burden currently associated with being a Code signatory and ensure that information included in reports is useful and accessible to all underlying investors and other stakeholders.
• Positioning – The FRC is working closely with other regulators such as the DWP, TPR and the FCA to support clarity in understanding the revised Code and its successful implementation. The Code will continue to support the objectives of those other regulators to avoid any confusion and duplication that signatories may encounter.

The press release, webcast recording and podcast can be found on the FRC website.

The guid­ance out­lines the minimum stat­utory re­port­ing re­quire­ments that must be met, provides some best prac­tice ex­amples and also in­dic­ates the un­der­ly­ing prin­ciples that should be adopted in pre­par­ing the in­form­a­tion.

The guid­ance is ap­plic­able to all central gov­ern­ment bodies that fall within the scope of the Green­ing Gov­ern­ment Com­mit­ments, and which produce annual reports and ac­counts in ac­cord­ance with HM Treas­ury's Gov­ern­ment Fin­an­cial Re­port­ing Manual (FReM). 

The press release and guid­ance are avail­able on HM Treas­ury website.

HM Treas­ury has set out a three-year phased ap­proach to im­ple­ment the TCFD re­com­mend­a­tions in central gov­ern­ment annual reports and ac­counts.  In July 2023 it pub­lished its phase 1 guid­ance which ad­dressed the re­com­men­ded dis­clos­ures for the 'Gov­ernance' pillar ap­ply­ing to in-scope central gov­ern­ment bodies' annual reports and ac­counts from 2023-24. In March 2024, the application guidance for Phase 2 was published, addressing the 'Risk Management' and 'Metrics and Targets' pillars applying from 2024-25.

The exposure draft for Phase 3 sets out the disclosure requirements for the third year of implementation and covers the recommended disclosures for the 'Strategy' pillars of the TCFD framework. Phase 3 re­quire­ments will apply to annual reports and accounts for 2025-26 (pro­posed ef­fect­ive date 1 April 2025) and expand upon the ex­ist­ing re­port­ing re­quire­ments in Phase 1 and Phase 2.  

The guid­ance will apply to all de­part­ments (min­is­terial and non-min­is­terial), as well as some central gov­ern­ment and wider public sector bodies that meet certain cri­teria, or where they have been dir­ec­ted/in­struc­ted to follow the guid­ance by their re­spect­ive rel­ev­ant au­thor­ity. Other central gov­ern­ment and public sector bodies may vol­un­tar­ily choose to follow the guid­ance in full or in part. 

Com­ments on the ex­pos­ure draft are re­ques­ted by 19 September 2024.  

A press release and the ex­pos­ure draft are avail­able on HM Treas­ury website.

The key areas that the study will explore include:

• Supply of auditors, including barriers to entry and expansion for audit firms.
• Demand for audit, including the audit tendering process and engagement by NHS bodies.
• The regulatory framework, including unique features of NHS provider and ICB audits.
• Capacity constraints and potential impacts on the wider local audit market.

The FRC invites all in­ter­ested parties to submit com­ments and evid­ence on the NHS audit market by 17 October 2024.  The market study is ex­pec­ted to con­clude in spring 2025.

A press release in­clud­ing further in­form­a­tion and details on how to take part in the study is avail­able on the FRC website

The Review analyses high-profile cases concluded in the last year and also draws out important themes and lessons from recently concluded cases highlighting how proportionality is embedded throughout the FRC's approach to investigatory and enforcement work.   Recurring themes in investigations  include failures in relation to fundamental aspects of an audit such as auditor objectivity and integrity, understanding the entity, audit planning and evidence, professional scepticism, and the approach to the risk of fraud. 

A press release and the Annual En­force­ment Review 2024 are avail­able from the FRC website.  A podcast is also available on the FRC website which discusses insights from the review.

In the podcast, ISSB Vice-Chair Sue Lloyd, ISSB member Veronika Pountcheva and an ISSB staff member discuss the key points from the questions from the meeting. 

The TIG discussed:

• Revision of preceding period estimated amounts when estimating information from an entity in the value chain

• Application of the requirements on comparative information when acquiring or disposing of a subsidiary

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

Background

In June 2022, the IFRS Interpretations Committee (IFRS IC) discussed a request about the accounting applied by a parent, whose functional currency is the currency of a hyperinflationary economy, when it consolidates a subsidiary, whose functional currency is the currency of a non-hyperinflationary economy. Through research on this matter, the Committee also became aware of a related matter, where an entity that has a non-hyperinflationary functional currency presents its financial statements in hyperinflationary presentation currency.

The Committee decided to refer the matter to the IASB by recommending that the IASB develop a narrow-scope amendment that provides a relevant translation method applicable to address the original question asked to the Committee and the related matter. The IASB now proposes amendments to IAS 21 to address the matters.

Suggested changes

The proposed amendments in exposure draft IASB/ED/2024/4 Translation to a Hyperinflationary Presentation Currency (Proposed amendments to IAS 21) are:

• When an entity translates amounts from a functional currency that is the currency of a non-hyperinflationary economy to a presentation currency that is the currency of a hyperinflationary economy, the entity translates those amounts, including comparative amounts, using the closing rate at the date of the most recent statement of financial position; and
• the entity would have to disclose that it has applied the method, including summarised financial information about its foreign operations translated applying the proposed translation method; it would also have to disclose if the economy concerned ceased to be hyperinflationary.

The exposure draft also proposes that there should be no disclosure reliefs for entities applying IFRS 19 Subsidiaries without Public Accountability: Disclosures.

Comments on the proposed changes are requested by 22 November 2024.

Effective date and transition

The exposure draft does not specify an effective date for the amendments. The effective date will be decided when the IASB redeliberates the proposals. However, the exposure draft notes that entities would be required to apply the amendments retrospectively and would be permitted to apply them before the effective date.

Additional information

Please click for:

• IASB press release
• Access to the exposure draft on the IFRS Foundation website
• Our UK Accounting Plus project page on Use of a hyperinflationary presentation currency by a non-hyperinflationary entity

The discussion features perspectives from both Global Preparers Forum (GPF) and IASB members.

Please click to access the webcast on the IFRS Foundation website.

The topics discussed at the meeting included:

• Intangible assets
• Statement of cash flows and related matters
• IFRS 19 update
• Exposure Draft Business Combinations — Disclosures, Goodwill and Impairment
• Exposure Draft Contracts for Renewable Electricity

For more in­for­ma­tion, see the meeting page and the meeting summary on the IFRS Foundation's website.

The amendments contain guidance to specify when a currency is exchangeable and how to determine the exchange rate when it is not.

The amendments are effective for annual reporting periods beginning on or after 1 January 2025, with early application permitted.

The Endorsement Criteria Assessment and Adoption Statement are available on the UKEB website.

The UKEB has also updated its adoption statement report which is available on its website.