June

IPSASB Q&A document on climate change

23 Jun 2020

The staff of the International Public Sector Accounting Standards Board (IPSASB) has developed a Questions & Answers (Q&A) document highlighting the relevant standards and guidance for the public sector in applying the Board’s current guidance to provide clear, comparable, and relevant information on climate change.

The Q&A addresses key questions such as:

  • Is there any existing IPSASB literature relevant to consider for climate change reporting?
  • When governments or public sector entities have strategies and programs in place to manage climate change risks, how should these be treated?
  • When governments or public sector entities adopt the UN’s Sustainable Development Goals (SDGs), what IPSAS financial reporting guidance should be considered?

The guidance can be accessed through the press release on the IPSASB website.

IFRS Foundation appoints new IASB Board member

22 Jun 2020

The Trustees of the IFRS Foundation have announced the appointment of Zach Gast as IASB Board member.

Mr Gast will join the Board for an initial term of five years on 1 August 2020. He comes from the Center for Financial Research and Analysis (CFRA) — a provider of independent investment research — where he currently serves as president, directing the organisation’s forensic accounting and equity research strategy.

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

IFRS Foundation to combine its annual conference with the annual World Standard-setters conference

19 Jun 2020

The IFRS Foundation has announced a virtual conference which will combine the annual IFRS Foundation conference with the annual World Standard-setters conference. The virtual conference will be held on 28–29 September 2020.

The virtual conference will include the latest developments in IFRS Standards and major consultations as well as other presentations and interactive Q&A sessions.

For more information, see the conference page on the IASB’s website.

IFRS Interpretations Committee holds June 2020 meeting

18 Jun 2020

The IFRS Interpretations Committee met via video conference on 16 June 2020. We have posted Deloitte observer notes for the technical issues discussed during this meeting.

Supply Chain Financing Arrangements — Reverse Factoring: The Committee decided to publish a tentative agenda decision outlining how IFRS Standards apply to different aspects of accounting for reverse factoring arrangements (mainly presentation of the liability in the statement of financial position and presentation in the statement of cash flows). With regard to the recommended narrow-scope standard-setting on new disclosure requirements for arrangements entered in to fund payables to suppliers, no decision has been made and this will be reconsidered at a future meeting.

The comment period for the tentative agenda decision has been extended until the end of September 2020.

IFRS 16 Leases — Sale and Leaseback with Variable Payments: In March 2020, the Committee published a tentative agenda decision stating that for a sale and leaseback transaction with variable payments the seller-lessee recognises a lease liability at the date of the transaction, even if all the payments for the lease are variable and do not depend on an index or rate, reflecting how the right-of-use asset is measured to determine the gain or loss on the sale and leaseback transaction. The Committee decided to finalise the agenda decision, with some suggested changes to the drafting.

IAS 12 Income Taxes — Deferred Tax Related to an Investment in Subsidiary: In March 2020, the Committee published a tentative agenda decision that when an entity expects to recover the carrying amount of its investment in the subsidiary through distributions of profits by the subsidiary, the entity uses the distributed tax rate to measure the deferred tax liability related to its investment in the subsidiary. The Committee decided to finalise the agenda decision.

IAS 38 Intangible Assets — Player Transfer Payments: In November 2019, the Committee published a tentative agenda decision stating that when a football club transfers a player to another club it recognises the gain or loss in profit or loss applying IAS 38, and not revenue (IFRS 15). However, the agenda decision suggested that the intangible asset could be classified as inventory (IAS 2) if it was is acquired for development and sale in the ordinary course of business. The Committee decided to finalise the agenda decision, with the suggested removal of the analysis under IAS 2.

More In­for­ma­tion

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

Example of an annual financial report in ESEF format

18 Jun 2020

The European Securities and Markets Authority (ESMA) has published on its website an example of an annual financial report which is prepared in the new European Single Electronic Format (ESEF).

The report aims to provide issuers with an example of an annual report in the ESEF format for their submissions to the national Officially Appointed Mechanisms.

Please click for access to the report and more information on the ESMA website.

Accountancy Europe publishes follow-up paper on interconnected standard-setting

16 Jun 2020

In December 2019, Accountancy Europe has published a paper describing and calling for a global solution to interconnected standard-setting that can meet the need for reliable, consistent information in non-financial reporting that is interconnected with financial reporting. A follow-up paper has now been made available that analyses the feedback received, provides an update on the latest EU and global developments, and reflects on a way forward.

As reported in April 2020, the responses to the cogito paper show strong support for a global solution to non-financial reporting. Accountancy Europe summarises the key takeaways from the comment letters received as follows:

  • The ultimate objective should be a system solution to deliver global NFI reporting standards connected to financial information.
  • The ‘system solution’ could be achieved in steps such as bilateral moves to closer align or converge NFI reporting standards, policy developments, and expand the mandates for multilateral organisations.
  • A ‘building blocks’ approach could address global challenges and varying policy needs with a core set of global metrics for NFI reporting to ensure comparability and address global challenges and with optional further blocks to reflect jurisdictional priorities or address sector-specific topics.
  • Quickest progress could be made by building on the best of NFI frameworks and standards (CDP, CDSB, GRI, and SASB).
  • The European Union should collaborate with different organisations to help catalyse a global solution.

Please click to access the follow-up paper on the Accountancy Europe website.

June 2020 IASB meeting agenda posted

16 Jun 2020

The IASB has posted the agenda for its next meeting, which will be held via video conference on 23–25 June 2020. There are six topics on the agenda.

The Board will discuss the following:

  • Maintenance and consistent application
  • Disclosure initiative — Accounting policies
  • Disclosure initiative — Targeted standards-level review of disclosures
  • Classification of liabilities as current or non-current
  • Extractive activities
  • IBOR reform and the effects on financial reporting — Phase 2

The full agenda for the meeting can be found here. We will post any updates to the agenda, our comprehensive pre-meeting summaries, as well as observer notes from the meeting on this page as they become available.

FRC Lab reports on current questions investors seek answers on

15 Jun 2020

Two new reports from the Financial Reporting Lab of the UK Financial Reporting Council (FRC) provide practical guidance to companies in areas of reporting that investors have highlighted as being most critical in these times of unparalleled economic uncertainty.

The reports found that investors recognise COVID-19 may create a wide range of issues for companies, but that the provision of transparent and timely information helps investors in their decision-making and drives the allocation of capital when companies are looking to the markets for support.

Specific elements of uncertainty relevant to the next 12 months might include (but are not limited to):

  • Timing of resumption of operations.
  • Further restrictions that limit the return to normal operations.
  • Restrictions placed on government (or other) capital.
  • Timing and continuation of government schemes and support packages.
  • The outcome of capital raising actions, discussions with banks, and landlords.
  • Short-term impacts of pricing changes to revenue and expenses.
  • Impacts on human capital, the supply chain and customers.

Please click for the following additional information on the FRC website:

  • Report with practical advice to companies and infographic setting out the disclosures investors expect to see from companies during this time of uncertainty
  • Report with specific guidance on going concern, risk and viability disclosures

Responses to the EC consultation on the revision of the NFRD show desire for global standard-setting in this area

15 Jun 2020

In February 2020, the European Commission (EC) launched a public consultation on a revision of the EU Non-Financial Reporting Directive (NFRD). Among the proposals included in the consultation document was the suggestion that an EU standard-setter could be installed that would set European non-financial reporting standards.

While respondents to the consultation agree that standardisation in the area would be beneficial and that the scope of the NFRD could be expanded, the idea of a Europe only solution meets resistance.

A coalition of ten organisations including ACCA, Accountancy Europe, CDSB, and WWF warns to "keep up the international role for reporting standards" and notes that "we need to bear in mind that challenges such as the worldwide climate crisis requires global efforts and solutions"; ESMA notes that it "is of the view that international alignment should be the objective"; and the IFAC "urges the Commission to adopt a global mindset".

Deloitte has also submitted a comment letter. We note:

We support global standardisation because the issues faced are global ones and many businesses have global supply and value chains and global investors.

Pre-meeting summaries for the June 2020 IFRS Interpretations Committee meeting

10 Jun 2020

The IFRS Interpretations Committee will meet on 16 June 2020 to discuss four issues.

Supply Chain Financing Arrangements — Reverse Factoring: In its April 2020 meeting, the staff presented the research performed on supply chain financing ("SCF") arrangements submitted. The staff recommend that the Committee:

  • publish a tentative agenda decision outlining how IFRS applies to different aspects of accounting for them; and
  • develop new disclosure requirements for arrangements entered in to fund payables to suppliers.

IFRS 16 Leases — Sale and Leaseback with Variable Payments: In March 2020, the Committee published a tentative agenda decision stating that for a sale and leaseback transaction with variable payments the seller-lessee recognises a lease liability at the date of the transaction, even if all the payments for the lease are variable and do not depend on an index or rate, reflecting how the right-of-use asset is measured to determine the gain or loss on the sale and leaseback transaction. The staff recommend that the Committee finalise the tentative agenda decision, but to refer to the liability as a financial liability rather than a lease liability.

IAS 12 Income Taxes — Deferred Tax Related to an Investment in Subsidiary: In March 2020, the Committee published a tentative agenda decision that when an entity expects to recover the carrying amount of its investment in the subsidiary through distributions of profits by the subsidiary, the entity uses the distributed tax rate to measure the deferred tax liability related to its investment in the subsidiary. The staff recommend that the Committee finalise the tentative agenda decision with minor editorial changes.

IAS 38 Intangible Assets — Player Transfer Payments: In November 2019, the Committee published a tentative agenda decision stating that when a football club transfers a player to another club it recognises the gain or loss in profit or loss applying IAS 38, and not revenue (IFRS 15). However, the agenda decision suggested that the intangible asset could be classified as inventory (IAS 2) if it was is acquired for development and sale in the ordinary course of business. The staff recommend finalising the agenda decision, but with all references to IAS 2 removed.

Work in progress: The staff are analysing requests related to the hedge of variability in cash flows in real terms and sale and leaseback in a corporate wrapper.

The full 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 for the meeting as they become available.

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