Cover paper (Agenda Paper 24)

Both the IASB and the FASB have recently finalised their agenda consultations. The purpose of this meeting was to provide both boards with an opportunity to share comments and ask questions about these consultations. The boards were not asked to make any decisions.

FASB: Overview (Agenda Paper 24A)

This paper sets out the background for the FASB’s agenda consultation together with an overview of respondents. It also illustrated which areas have been identified as high priority by respondents and which as low priority.

The agenda paper gaves detail on the following areas:

• Disaggregation of financial information—investors and other financial statement users cited a general need for greater disaggregation of a range of financial reporting information to better understand the performance of the company and assess future operating results, cash flows, and risks
• Emerging areas in financial reporting—stakeholders cited a need for the FASB to maintain and improve the relevancy of US GAAP by addressing financial reporting for several emerging areas
• Reduction of unnecessary complexity in US GAAP—stakeholders provided feedback that there are specific areas of US GAAP that should be revisited to reduce unnecessary cost and complexity in the system
• Improvements to FASB standard-setting processes—stakeholders provided feedback that enhancements and education about certain FASB standard-setting processes would be helpful to increase transparency and communication

The following actions have been taken in response to the feedback received on the agenda consultation:

• Projects added to the technical agenda:
  • Accounting for and Disclosure of Crypto Assets (formerly Accounting for and Disclosure of Digital Assets)
  • Accounting for and Disclosure of Software Costs
  • Accounting for Environmental Credit Programs
• Refined scope and objective of existing projects on the technical agenda:
  • Disaggregation—Income Statement Expenses (formerly the Financial Performance Reporting— Disaggregation of Performance Information project)
  • Targeted Improvements to Income Tax Disclosures (formerly the Disclosure Framework: Disclosure Review—Income Taxes project)
• Removed projects from the technical agenda:
  • Consolidation Reorganisation and Targeted Improvements
  • Distinguishing Liabilities from Equity (Phase 2)
  • Identifiable Intangible Assets and Subsequent Accounting for Goodwill
  • Improving the Accounting for Asset Acquisitions and Business Combinations (Phase 3 of the Definition of a Business Project)
  • Lease Modifications (will be monitored as part of the post-implementation review (PIR))

The following projects were on the research agenda at the end of Q2 2022:

• Accounting for and Disclosures of Intangibles
• Accounting for Exchange-Traded Commodities
• Accounting for Financial Instruments with Environmental, Social, and Government (ESG)-Linked Features
• Accounting for Government Grants, Invitation to Comment (ITC)
• Consolidation for Business Entities
• Key Performance Indicators for Business Entities
• Statement of Cash Flows

FASB: Consultation Report (Agenda Paper 24B)

This agenda paper reproducd the 2021 FASB Agenda Consultation Report that was published in June 2022.

IASB: Overview (Agenda Paper 24C)

In March 2021, the IASB published Request for Information (RFI) Third Agenda Consultation. The IASB sought views on:

• The strategic direction and balance of the IASB’s activities
• The criteria for assessing the priority of financial reporting issues that could be added to the IASB’s work plan
• New financial reporting issues that could be given priority in the IASB’s work plan

The agenda paper sets out the IASB’s activities and questions asked in the RFI, as well as key considerations. It went on to give an overview of the respondents by stakeholder type and region.

The IASB took the following actions in response to the feedback received:

• After considering cross-cutting themes, such as implications of connectivity with the International Sustainability Standards Board (ISSB), and consistent with stakeholders’ feedback, the IASB decided to begin no new activities within the current scope of its work and to leave its current level of focus on its main activities largely unchanged
• The IASB decided not to make any changes to the list of criteria for assessing the priority of financial reporting issues but to proceed with the list as proposed in the RFI. The IASB used the criteria to assess the priority of potential projects suggested by respondents
• The IASB’s added the following new projects:
  • Intangible Assets—this project will aim to review IAS 38 comprehensively
  • Statement of Cash Flows and Related Matters—as part of the research phase of such a project, the IASB will consider whether the project should aim to review IAS 7 comprehensively or make more targeted improvements
  • Climate-related Risks in the Financial Statements—this project will consider whether and, if so, what narrow-scope actions might be needed in relation to accounting for climate-related risks in the financial statements
  • Projects on Pollutant Pricing Mechanisms and Operating Segments were added to the reserve list
• The IASB decided not to reprioritise projects on its current work plan

IASB: Snapshot (Agenda Paper 24D)

This paper reproduced the IASB’s Snapshot document that was published on the Third Agenda Consultation.

IASB: Feedback Statement (Agenda Paper 24E)

This paper reproduced the IASB’s Feedback Statement that was published on the Third Agenda Consultation.

Discussion

The papers were discussed together.

IASB and FASB members discussed some of the projects the boards had taken on as a result of the agenda consultation and also informed each other about what has not been taken on. It was noted that issues on intangible assets seemed important for stakeholders of both boards. Especially the FASB’s new project on software costs sparked some interest among IASB members.

The IASB Chair noted that both boards will look into issues around intangibles and cash flow statements. He noted that US GAAP and IFRS are not converged for those areas, however it would be good to exchange information between the boards on these projects, keeping the broader constituency of both boards in mind.