The Board will discuss the following:

• Board work plan update
• Agenda consultation
• Equity method of accounting
• Taxonomy
• Main­te­nance and con­sis­tent ap­pli­ca­tion
• Dynamic risk management
• Ex­trac­tive ac­tiv­i­ties
• Disclosure initiative — subsidiaries that are SMEs
• Management commentary

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.

Further, the EFRAG General Assembly extended the mandate of all EFRAG Board members that was to expire on 31 October 2020 (date incorrect in press release) by six months to 30 April 2021, to allow the EFRAG Board in its current composition to finalise the endorsement advice on IFRS 17 Insurance Contracts.

For more information, see the press release on the EFRAG’s website.

In view of COVID-19, many companies are facing a challenging year-end. While the uncertainty creates risks for annual reporting it also presents opportunities. The two new guides look at key elements in respect of resources, action, and the future and in respect of going concern, risk, and viability. Both guides:

• summarise key messages from earlier reports;
• provide an update on recent developments in corporate reporting;
• offer some thoughts regarding how corporate reporting can develop; and
• contain practical examples from reports and presentations released by companies.

Please click to access COVID-19: Resources, action, the future - a look forward and COVID 19: Going concern, risk, and viability - a look forward on the FRC website.

The Trustee's published the consultation paper on 30 September 2020. Comments are requested by 31 December 2020.

Please click to access the video (just over three minutes long) on YouTube.

The IFRS Foun­da­tion initiated the new com­pi­la­tion series in October 2019 and will continue it by pub­lish­ing new volumes bian­nu­ally in April and October. For more in­for­ma­tion, see the press release and com­pi­la­tion on the IASB website.

In addition to the recent major developments at the European Commission, CFA Institute, five ESG standard-setters, the World Economic Forum, and the IFRS Foundation Trustees, the following smaller developments occurred recently:

• The Climate Disclosure Standards Board (CDSB) released CDSB Framework application guidance for climate-related disclosure. The release is the first in a series of guides on nature-related financial disclosure, with water guidance to follow early next year. Please click for more information on the CDSB website.
• The CDSB also offers free consultation on climate-related reporting for EU businesses. See here for more information.
• Efforts are underway to create a Task Force for Nature-related Financial Disclosures (TNFD). An Informal Working Group has been founded that will lead to the creation of the TNFD itself in 2021. Establishing a reporting framework for finance sector impacts and dependencies on nature is seen as critical for halting biodiversity and ecosystem loss. A TNFD website is already available.
• Following the launch of a collaborative workplan between the Global reporting Initiative (GRI) and the Sustainability Accounting Standards Board (SASB), the standard-setters are working together to develop materials that show how the two sets of reporting standards can be used together. As a next stage in the collaboration, a joint survey has been launched to help understand current experiences by organisations that use either or both sets of standards for their sustainability reporting. Please click for more information on the GRI website.
• Also, a recent GRI public opinion poll on social and environmental corporate performance revealed rising trust in sustainability reporting around the world. Please see the GRI website for more information.
• Principles for Responsible Investment (PRI) has published a call by investor groups on companies to reflect climate-related risks in financial reporting. They stress the investor view that climate-related risks are material factors that should be reflected appropriately in financial statements. More information is available on the PRI website.
• New Zealand will implement mandatory climate risk reporting in line with the TCFD recommendations, becoming the first country to do so. Please see the press release of the New Zealand government for more information.
• The Hong Kong Money Authority (HKMA) recently set out a supervisory approach designed to ensure banks build resilience to climate-related risk. In terms of disclosures and data, HKMA notes that supervised financial institutions should take the TCFD recommendations into account while developing an ‘appropriate’ approach to disclosing climate-related risk that enhances transparency. More information is available in the corresponding HKMA White Paper.
• AccountAbility announces three developments:
  • German and simplified Chinese translations of the AA1000 AccountAbility Principles (press release)
  • Spanish, Portuguese, and Bahasa Indonesian translations of the AA1000 AccountAbility Principles (press release)
  • Latest guidance on sustainability assurance (press release)
• The International Auditing and Assurance Standards Board (IAASB) has issued a Staff Audit Practice Alert The Consideration of Climate-Related Risks in an Audit of Financial Statement. The Staff Audit Practice Alert assists auditors in understanding what already exists in the International Standards on Auditing (ISA) today and how it relates to auditors’ considerations of climate-related risks in an audit of financial statements. Please click for more information on the IAASB website.
• The Center for Audit Quality (CAQ) released a new report that finds external auditors can contribute to the reliability and comparability of non-GAAP financial measures and KPIs – information found outside of the audited financial statements. Please see the CAQ website for more more information.

Intangible assets are often, and increasingly, the primary drivers of the value of a company. While there is significant European Union regulation governing how publicly accountable companies report intangible assets in their financial statements, the accounting directive has no explicit regulations for SME companies except for the accounting for goodwill. Therefore, EFAA carried out a study to gain insights into the accounting treatment of intangible assets across jurisdiction of EFAA member bodies.

The objectives of the study were: 

• To determine the applicable regulatory framework for accounting for intangible assets in each jurisdiction;
• to compare these frameworks;
• to establish whether there are incentives that influence the acquisition and valuation of intangible assets; and
• to inform the current debate on intangible assets in Europe.

Not surprisingly, the study revealed that there are significant variations between jurisdictions in Europe when it comes to the accounting treatment of intangibles by SMEs and, consequently, users of SME financial statements need to be alert to the lack of comparability of information on intangibles.

Please click to access The Financial Reporting of Intangibles by SMEs in Europe on the EFAA website.

The amendments provide lessees with an exemption from assessing whether a COVID-19-related rent concession is a lease modification.

The European Union effective date is the same as the IASB effective date (1 June 2020).

The Commission Regulation amending Regulation (EC) No 1126/2008 adopting certain international accounting standards in accordance with Regulation (EC) No 1606/2002 of the European Parliament and of the Council was published in the Official Journal of the European Union on 9 October 2020.

EFRAG has updated its endorsement status report to reflect that the European Union has adopted the amendments.

Specifically, Ms Ko discussed work done by the European Commission, CFA Institute, five ESG standard-setters, the World Economic Forum, and the IFRS Foundation Trustees towards establishing a common set of non-financial reporting standards. Ms Ko also discussed the new Sustainability Standards Board and the important role it will play in the development of sustainability standards and how the IFRS Foundation can aid in establishing effective synergies with existing financial reporting. She especially noted:

The Trustees of the Foundation are aware of the enormity of the task of developing a global set of sustainability standards. The Trustees are very clear that building on and working with regional initiatives is a ‘must’ in order to achieve global consistency and reduce complexity and hopefully cost too. [...] The new Sustainability Standards Board must develop a structure and culture that seeks to build effective synergies with existing financial reporting. This should give the IFRS Foundation an added advantage in playing a key role in the field of sustainability reporting. It would not be right to emphasise one form of reporting at the expense of another. [...] Approached in this way, everybody would benefit from the useful and globally comparable information and data that would result.

The full article is available on the IASB’s website.

The webcast will be held on 21 October 2020 at 11:00am BST and last about 45 minutes. To register for the webcast, submit a question, or for more information, please see the press release on the IASB's website.