January

EC expert group issues report on disclosure of climate-related information

10 Jan 2019

The Technical Expert Group on Sustainable Finance set up by the European Commission (EC) has published its first report on companies' disclosure of climate-related information. It contains recommendations that will allow the EC to update its non-binding guidelines on non-financial reporting with specific reference to climate-related information, in line with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) established by the Financial Stability Board.

The report marks another step in the implementation of the EC's action plan on sustainable finance published in March 2018 and follows up on the EC's legislative proposal on the disclosure of climate-related information presented in May 2018.

The report contains proposals for disclosing not just how climate change might influence the performance of a company, but also the impact of the company itself on climate change.

The guidance proposed in the report intends to assist companies in developing high quality climate-related disclosures that comply with the Non-Financial Reporting Directive and address the recommendations of the TCFD. Specific disclosures and guidance are described under each element of the Non-Financial Reporting Directive requirements, including metrics for all in-scope companies, for non-financial companies, and for banks and insurance companies. In doing so, the report distinguishes between three types of disclosure:

  • Type 1 disclosures – those that companies should disclose (high expectation that all reporting companies disclose them)
  • Type 2 disclosures – those that companies should consider disclosing (expected of companies with significant exposure to climate-related risks and opportunities)
  • Type 3 disclosures – those that companies may consider disclosing (additional or innovative disclosures that provide more enhanced information)

The EC will take the report into consideration when it updates the non-binding guidelines on non-financial disclosure that accompany the Non-Financial Reporting Directive.

Stakeholders are invited to provide with written comments on the report by 1 February 2019.

Please click to access the Report on Climate-related Disclosures on the EC website.

Additional educational module on the IFRS for SMEs on consolidated and separate financial statements

10 Jan 2019

The IFRS Foundation has issued an additional new stand-alone educational module, which supports the learning, application, and reading of financial statements prepared with the IFRS for SMEs Standard.

The module focuses on the general requirements for presenting financial statements applying Section 9 Consolidated and Separate Financial Statements of the IFRS for SMEs.

Please click to access all 23 IFRS for SMEs modules available so far (free registration required).

Additional educational module on the IFRS for SMEs on income tax

09 Jan 2019

The IFRS Foundation has issued an additional new stand-alone educational module, which supports the learning, application, and reading of financial statements prepared with the IFRS for SMEs Standard.

The module focuses on the accounting and reporting of income tax applying Section 29 Income Tax of the IFRS for SMEs.

Please click to access all 22 IFRS for SMEs modules available so far (free registration required).

EFRAG TEG appointment and reappointments

09 Jan 2019

The Board of the European Financial Reporting Advisory Group (EFRAG) has announced the appointment of Isabelle Grauer-Gaynor to its Technical Experts Group (TEG).

In addition, EFRAG has reappointed the following members: Geert Ewalts, Günther Gebhardt, Heinz Hense, Andrew Spooner, and Ambrogio Virgilio. The EFRAG TEG composition becomes effective on 1 April 2019.

For more information, see the press release on the EFRAG website. The press release also notes that a new TEG Chairman will be announced "in due course".

CMAC call for members

08 Jan 2019

The IASB's Capital Markets Advisory Committee (CMAC) is currently seeking applications for membership after the terms of a number of members expire at the end of 2019. New candidates would join the CMAC for a three-year term beginning 1 January 2020, renewable once for an additional three-year term.

The CMAC is a group of professional financial analysts who meet three times a year with members of the IASB to provide the views of professional investors on financial reporting issues.

For more information, see the press release on the IASB's website.

Additional educational module on the IFRS for SMEs on liabilities and equity

08 Jan 2019

The IFRS Foundation has issued an additional new stand-alone educational module, which supports the learning, application, and reading of financial statements prepared with the IFRS for SMEs Standard.

The module focuses on the general requirements for presenting financial statements applying Section 22 Liabilities and Equity of the IFRS for SMEs.

Please click to access all 21 IFRS for SMEs modules available so far (free registration required).

Pre-meeting summaries for the January 2019 IFRS Interpretations Committee meeting

07 Jan 2019

The IFRS Interpretations Committee will meet via Video Conference Call on Wednesday 16 January 2019. The Committee will discuss four tentative agenda decisions. The meeting starts at 12 noon London time and the meeting is scheduled to last just over one hour.

The Committee will consider recommendations from the staff to finalise the following:

  1. IAS 37 Provisions, Contingent Liabilities and Contingent Assets: whether a voluntarily payment made by an entity to a tax authority in relation to a disputed assessment (to avoid possible penalties or interest) is an asset.
  2. IFRS 15 Revenue from Contracts with Customers: whether fees for admitting an entity to a stock exchange and fees for an ongoing listing service are distinct or relate to only one service.
  3. IAS 27 Separate Financial Statements: when an entity loses control of a subsidiary as a result of disposing some of its interest, can the entity elect to measure the retained interest at FVOCI and can any gain or loss on initial disposal be presented in profit or loss.
  4. IAS 27 Separate Financial Statements: whether the cost of a subsidiary acquired in stages is the fair value of the tranches (as deemed cost) or the sum of the consideration actually paid.

Other work in progress

The Committee will discuss feedback on tentative agenda decisions in relation to the application of the highly probable requirement in a cash flow hedge relationship and the recognition of a lease liability by a joint operator at a future meeting. 

The staff are working on potential amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates to provide more guidance when a spot exchange rate is not observable.

The staff are analysing requests in relation to (a) whether an entity applies IFRS 16 Leases or IAS 38 Intangible Assets to a contract that gives it rights to space below the ground for a period of time; and (b) whether the right to potential discounts affects the classification of an entity’s pension plan as defined benefit or defined contribution.

The full agenda for the meeting and our pre-meet­ing summaries can be found here. We will update this page for any changes to the agenda and our Deloitte observer notes from the meeting as they become available.

IVSC consults on the valuation of non-financial liabilities

07 Jan 2019

The International Valuation Standards Council (IVSC) has published an exposure draft IVS 220 'Non-Financial Liabilities' for public comment.

The IVSC's project on the valuation of non-financial liabilities resulted from feedback received during its agenda consultation process conducted in 2017 and 2018.

In the introductory comments, the IVSC notes that the determination of whether a liability is financial or non-financial may be difficult. While non-financial liabilities have limited accounting and valuation guidance, financial liabilities are often subject to specific accounting, valuation, and regulatory requirements (the exposure draft contains extensive references to both IFRSs and US GAAP). Therefore, the IVSC warns that valuers must use judgement and rely on the applicable accounting and/or regulatory guidance when defining the subject liability as non-financial or financial.

Please click to access the exposure draft on the IVSC website. Comments are requested by 1 April 2019.

Agenda for the January 2019 IFRS Interpretations Committee meeting

04 Jan 2019

The IASB's IFRS Interpretations Committee will be meeting by video conference call on 16 January 2019. The Committee will discuss four agenda decisions to finalise and the Committee's work in progress.

The meeting starts at 12 noon London time and is scheduled to last 70 minutes.

The agenda for the meeting can be found here. We will update this page for any changes to the agenda and our Deloitte pre-meeting summaries and observer notes from the meeting as they become available.

AAOIFI issues two new financial accounting standards

04 Jan 2019

The Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) has issued financial accounting standard (FAS) 33 'Investments in Sukuk, Shares and Similar Instruments' and FAS 34 'Financial Reporting for Sukuk-holders'.

FAS 33, which supersedes FAS 25, sets out improved principles for classification, recognition, measurement, presentation and disclosure of investment in Sukuk, shares and other similar instruments of investments made by Islamic financial institutions in line with Sharia’a principles. It defines the key types of instruments of Sharia’a compliant investments and defines the primary accounting treatments commensurate to the characteristics and business model of the institution under which the investments are made, managed and held.

FAS 34 aims to establish the principles of accounting and financial reporting for assets and businesses underlying the Sukuk to ensure transparent and fair reporting to all relevant stakeholders, particularly including Sukuk-holders.

The two standards are effective for financial periods beginning on or after 1 January 2020 with earlier adoption permitted. The press release on the AAOIFI website offers more information and access to the new standards.

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