At its April 2019 meeting, the Board gave the staff permission to begin the balloting process for an exposure draft of proposed amendments to IFRS 17. The comment letter period is to be discussed at the May 2019 meeting of the Board.

The staff argues that the matter is narrow in scope and urgent, thus the Board might want to consider a period of less than 120 days. As the comment period needs to strike a balance between the need to allow stakeholders time to consider the proposals and provide further input to the Board and timely finalisation of the amendments, the staff intends to propose that the Board sets a comment letter period of 90 days.

The papers for the conference call have been made available on the IASB website.

The podcast features discussions of the following topics in more detail (length of the podcast: 16 minutes):

• 2 April speech on sustainability reporting and the IASB's work to update the Management Commentary Practice Statement
• 4 April meeting of the TRG for IFRS 17 and 9 April Board discussions on IFRS 17
• Primary financial statements
• Business combinations under common control
• Goodwill and impairment
• Dynamic risk management
• Disclosure initiative - Amendments to IAS 1 IFRS Practice Statement 2

The podcast can be accessed through the press release on the IASB website. More information on the topics discussed is available through our comprehensive notes taken by Deloitte observers at the April IASB meeting.

The Board considered the package of amendments to IFRS 17 Insurance Contracts it has been considering since June 2018 and decided to proceed with them. In June 2018 the Board decided to propose some minor changes that it planned to include in the next Annual Improvements cycle. These will instead be included with the exposure draft for the package of IFRS 17 amendments. The Board also decided that the effective date of IFRS 17 and the proposed amendments should be for annual periods beginning on or after 1 January 2022 (with earlier application permitted). The Staff will be seeking clearance from the Due Process Oversight Committee to have a shorter than normal comment period.

The Board considered the feedback it received on the exposure draft Accounting Policies and Accounting Estimates (Amendments to IAS 8). A majority of members thought that any clarification of such fundamental principles as accounting estimates, which affect many balances reported, provides valuable benefits to preparers, users and regulators and therefore worth the costs of implementing, at least some of, the proposed amendments.

The project looking at goodwill and impairment returned to the Board. The Board decided to include in the Discussion Paper possible new disclosures that the acquirer of a business be required to provide information to help a user of the financial statements assess whether a business combination was a good investment decision and whether that business is performing as expected.

In Dynamic Risk Management the Board reached a preliminary view that negative balances within the target profile should not be permitted within DRM model; the changes to the risk management strategy and the target profile must occur infrequently; and the risk management strategy must be clearly documented within a specified time horizon and cannot be defined in a way that is contingent. They also reached a preliminary view that separate line items in the primary financial statements should not be required for derivatives designated in the DRM model from other derivatives or for accumulated changes in fair value of designated derivatives. That information would be provided in the notes to the financial statements. Also, net interest margin should include the aligned portion but not the misaligned portion.

For the Disclosure Initiative the Board decided to proceed with an exposure draft to propose adding two examples to the Materiality Practice Statement related to accounting polices.

The Board decided that it need not pursue a single measurement approach for all business combinations under common control.  

In the Primary Financial Statements project the Board decided to clarify that MPMs (management performance measures) are subject to the general requirement that information included in the financial statements must provide a faithful representation. They also decided that entities can only identify a measure as an MPM if they use the same measure in their public communications. The Board also decided that they need to clarify presentation issues related an entity’s “main business activities.”

There were updates on Implementation Matters, the Research Programme and (orally) Management Commentary.  

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

The Climate Disclosure Standards Board (CDSB) has published Roadmap for Adopting the TCFD Recommendations: To the French G7 Presidency and the G7 Ministers of Finance and Environment noting that disclosure and accounting in line with the TCFD is the bedrock for implementing Paris Agreement Article 2.1c “Making finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development”. Please click to access the roadmap here.

The CDSB has also published a checklist to help preparers to integrate the TCFD recommendations into standard business processes. It can be accessed through the press release on the CDSB website.

The Corporate Reporting Dialogue (CRD) has launched a six week consultation to gather views from stakeholders on how to drive better alignment of sustainability reporting frameworks, as well as with frameworks that promote integration between non-financial and financial reporting. Please click to access the survey on the CRD website.

Deloitte has commented on the European Commission's targeted consultation on the update of the non-binding guidelines on non-financial reporting. We support the Commission's efforts to improve climate-related disclosures and welcome its approach in encouraging companies to implement the TCFD and incorporating them into the European Commission's guidelines.

The Alliance for Corporate Transparency has assessed over 100 European companies to analyse how effectively they are disclosing the environmental, social and governance (ESG) impact information required by the EU Non-financial Reporting Directive. The analysis concludes that companies are failing to disclose meaningful information about their ESG impact. The press release on the Alliance for Corporate Transparency website offers an overview of the findings and access to the full report.

The World Business Council for Sustainable Development (WBCSD) has released an ESG Disclosure Handbook and Indicator Library providing practical resources for addressing key disclosure questions, dilemmas and decisions to support effective and efficient disclosure practice.  Please click for more information on the WBCSD website.

The International Integrated Reporting Council (IIRC) has published a set of answers to some of the most frequently asked questions, as corporate reporting is being reformed worldwide to embrace the concept of integrated reporting. Please click to access the frequently asked questions on the IIRC website.

The Global Reporting Initiative (GRI) announces that

• there is increasing sustainability reporting in Sri Lanka and Bangladesh (press release);
• GRI is inviting nominations to join an expert working group to produce the first GRI Sector Standard, for oil, gas and coal (press release);
• the GRI 303 and GRI 403 Standards (2018) are now available in Spanish (press release); and
• the Organizing Committee for the Tokyo Olympic and Paralympic Games 2020 make use of the GRI Standards to produce a progress report for their sustainability plan (press release).

The United Nation's Sustainable Stock Exchanges (SSE) initiative notes that

• it has partnered with the Capital Market Authority in Rwanda and the Rwanda Stock Exchange to raise ESG standards of listed companies in Rwanda (press release); and
• the Moscow Exchange (MOEX) has become an SSE Partner Exchange (press release).

The New Zealand External Reporting Board (XRB) has released a Position Statement strongly supporting the reporting of EER information by entities within their annual report to the extent that the information is relevant to the intended users of annual reports. Please see the Position Statement on the XRB website.

The International Auditing and Assurance Standards Board (IAASB) is seeking feedback on progress in developing draft guidance in the first phase of a project to develop guidelines for assurance on extended external reporting (EER). The consultation paper is available on the IAASB website.

We support the decision of the Board to limit the proposed amendments to the addition of a definition of what constitutes cost of fulfilling a contract when assessing whether a contract is onerous and we agree that defining the cost of fulfilling a contract as those costs that relate directly to the contract provides the most relevant information.

Please download the full comment letter here.

Below is an analysis of all changes that were made to the work plan since our last analysis on 21 March 2019.

Standard-setting projects

• No changes.

Maintenance projects

• The following exposure drafts are now expected in June 2019 (formerly Q2 2019):
  • Amendments to IFRS 17 Insurance Contracts
  • Deferred Tax Related to Assets and Liabilities Arising from a Single Transaction (Amendments to IAS 12)
  • Fees in the ‘10 per cent’ Test for Derecognition (Amendments to IFRS 9)
  • Lease Incentives (Amendment to Illustrative Example 13 accompanying IFRS 16)
  • Subsidiary as a First-time Adopter (Amendments to IFRS 1)
  • Taxation in Fair Value Measurements (Amendments to IAS 41)
  • Updating a Reference to the Conceptual Framework (Amendments to IFRS 3)
• Disclosure Initiative—Accounting Policies — An Exposure Draft is expected in Q3 2019 (formerly H2 2019).
• Onerous Contracts—Cost of Fulfilling a Contract (Amendments to IAS 37) — Exposure Draft feedback is expected in May 2019 (formerly Q2 2019).

Research projects

• Extractive Activities — The review of research is now expected in H2 2019 (no date given before).

Other projects

• Due Process Handbook Review — An Exposure Draft is expected in June 2019 (formerly Q2 2019).
• The following projects were removed from the work plan, as the 2019 IFRS XBRL taxomomy was issued in March 2019:
  • IFRS Taxonomy Update—2018 General Improvements
  • IFRS Taxonomy Update—Common Practice (IFRS 13)

The above is a faithful comparison of the IASB work plan at 21 March 2019 and at 12 April 2019. For access to the current IASB work plan at any time, please click here.

Not yet reflected in the work plan are two annoucements made by the staff during the update on the research programme at the April 2019 meeting:

• The staff expect to start work on the PIR of IFRS 10 Consolidated Financial Statements, IFRS 11 Joint Arrangements and IFRS 12 Disclosure of Interests in Other Entities in Q2 of 2019.
• The staff also expect to start work on the pipeline project on the Equity Method in Q2 or Q3 of 2019 because there is some overlap with some of the issues that will be considered in the PIR of IFRS 11.

The podcast discusses the meeting of the Transition Resource Group (TRG) for Insurance Contracts on 4 April 2019 and the IASB discussion of possible amendments to IFRS 17 on 9 April 2019. The IASB's discussion considered some of the TRG findings.

The 10-minute podcast can be accessed on YouTube.

The purpose of the TRG is to seek feedback on potential issues related to implementation of IFRS 17 Insurance Contracts. Specifically, the TRG discussed the following two papers:

• Investment components within an insurance contract
• Reporting on other questions submitted

The meeting summary and audio recordings of each session are available on the TRG meeting page on the IASB’s website. For more information, see Deloitte's related IFRS in Focus newsletter. The IASB's discussion on amendments to IFRS 17 on 9 April also considered the TRG findings.

This issue features:

• Spotlight — Crypto-assets: The standard-setting perspective
• Preview — The Essentials: Analysing lessee financial statements and Non-GAAP performance measures
• We need your views
• Stay up to date
• Resources for investors

The Investor Update newsletter is available on the IASB’s website.

The Board discussed the following topics and questions:

• Sweep issues. The Board discussed additional stakeholder concerns relating to IFRS 17 (and IFRS 9) that have arisen in the project on the amendments to IFRS 17. On the effective date of the proposed amendments to IFRS 17, the staff recommended that the effective date is aligned with that of IFRS 17. On all other issues, the staff recommended that the Board not undertake any further action. The Board agreed unanimously with the staff recommendations.
• Annual improvements.
  • The Board discussed a number of minor changes the staff have become aware of through the ongoing implementation activities on IFRS 17 that would fall within the scope of the annual improvements process. There were some questions by the Board and additional clarifications will be added to the wording proposed by the staff. The Board agreed unanimously to include these changes in the forthcoming exposure draft.
  • The Board also agreed to include the minor changes to IFRS 17 identified as candidates for the annual improvements process in June 2018 in the forthcoming exposure draft.
• Overview of the amendments to IFRS 17. The Board was provided with an overview of all the amendments to IFRS 17 that the Board has tentatively decided to propose, the likely effects of the proposed amendments to IFRS 17, and a cost-benefit analysis for all amendments. This part of the session was educational in nature, and no vote was taken.
• Due process steps and permission for balloting.
  • The Board was asked to confirm its tentative decisions from the November 2018 meeting relating to the mandatory effective date of IFRS 17 and the fixed expiry date for the temporary exemption in IFRS 4 from applying IFRS 9. The Board confirmed that it wants to propose deferring the effective dates (unanimous vote).
  • The Board was asked to confirm that it wishes to proceed with an exposure draft to amend IFRS 17. The Board confirmed that it is satisfied that it has complied with the applicable due process steps and that it should begin the balloting process for the exposure draft (unanimous vote).
  • No Board member indicated a planned dissent at this stage.

The staff will now begin drafting the exposure draft, which it expects to issue by the end of June 2019. The comment period will be discussed at the May 2019 Board Meeting after obtaining permission from the Due Process Oversights Committee for a reduced comment period.