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Accountancy Europe comments on EFRAG outreach document

26 Jan 2021

As reported before, EFRAG conducted a series of online outreach events to gather stakeholders' view from various jurisdictions on the tentative proposals of the Project Task Force on non-financial reporting standards. An outreach document was provided to facilitate discussions at those meetings. Accountancy Europe has published a letter noting several shortcomings of the document.

Accountancy Europe agrees that some non-financial information topics such as climate change are urgent and need an urgent solution. This would include non-financial information reporting standards to enable consistent and comparable reporting on this topic. In its letter, Accountancy Europe notes that it is happy to help and collaborate with the task force, EFRAG and the European Commission to achieve progress in this area.

However, Accountancy Europe also stresses the following points:

  • A global approach with an additional building block approach is still the preferred solution. This would also be helpful in view of the urgency of the matter. "Re-inventing the wheel" is regarded as too time-consuming and unnecessary. Also, a European approach should consider the developments in the non-financial information playing field since EFRAG received the mandate.
  • Many market participants (including preparers) are already familiar with and report under international initiatives such as those of CDP, CDSB, GRI, IIRC and SASB. Introducing a new initiative would result in further fragmentation.
  • The outreach document uses new and different terminology compared to the widely used concepts in corporate reporting, non-financial information, sustainability or environmental, social and governance (ESG) terminology. This is considered confusing and unhelpful, especially as it was unclear whether this is intentional or not and what the underlying intention is and why (if there is one).
  • The proposals in the document relate to both the standard-setting process and reporting standards’ content, at times intermingling them. A clear split between standard-setting and reporting standards ́ content in the final document would simplify the tasks of a future European standard setter.
  • A conceptual framework would be key to a non-financial information principles-based reporting system. It could build on the well-known concepts of the IFRS Conceptual Framework and the concepts of the existing non-financial information frameworks and standards (e.g. CDSB, IIRC, SASB, GRI, etc.). Regional adaptations important for EU non-financial information reporting standards could be made to some items in these frameworks.
  • The outreach events to discuss the ideas in the outreach document are appreciated, however, the letter notes that clarification on the due process and the next steps for the project is needed. It is noted that it is common practice within EFRAG to open a consultation period on its preliminary proposals, receive stakeholders’ feedback and ultimately provide its final advice to the European Commission.

Please click to access the full letter on the Accountancy Europe website.

2021 required and annotated required IFRS Standards now available

26 Jan 2021

The IFRS Foundation announces that the annual publication formerly known as the 'Blue Book' is now available.

The Required IFRS Standards 2021 publication contains all official pronouncements that are mandatory on 1 January 2021. It does not include IFRSs with an effective date after 1 January 2021. The Annotated Required IFRS Standards 2021 includes the same content as Required IFRS Standards 2020, but with additional annotations containing extensive cross-references, explanatory notes and IFRS Interpretations Committee agenda decisions.

The books are available in electronic format for subscribers to eIFRS Professional. Printed copies of the books are available for sale through the IASB's web shop.

Agenda for the February 2021 ITCG meeting

25 Jan 2021

The agenda is available for the next meeting of the IFRS Taxonomy Consultative Group (ITCG), which will be a virtual meeting on 1 February 2021, from 12:30 to 14:30 GMT.

The staff will provide the ITCG with a summary of the public feedback received on PTU/2020/4 IFRS Taxonomy 2020 — 'General Improvements and Common Practice — Presentation of information in primary financial statements' and the ITCG will discuss the proposed response.

The agenda paper for this meeting is available on the IASB website.

Recent sustainability and integrated reporting developments

25 Jan 2021

A summary of recent developments at IIRC, IRC, UNEP FI, GRI, and EFRAG.

Following the launch of its revised International <IR> Framework, the International Integrated Reporting Council (IIRC) has now made available a recording of the launch event that provides an overview of the revisions. Please click to access the recording on the IIRC website.

In the context of the revised IIRC framework, the South African Integrated Reporting Committee (IRC) has published a version of the International <IR> Framework (2021) with marked up changes. Please click to access the document on the IRC website.

The IRC has also released Delivering a meaningful and concise integrated report. Please click to access the information paper on the IRC website.

A group of 22 leading insurers and reinsurers convened by the UN Environment Finance Initiative (UNEP FI) has published the first comprehensive guidance for the insurance industry to identify and disclose the impact of climate change on their businesses. Please click to access the guidance on the UNEP FI website.

The Global Reporting Initiative (GRI) has published updated version of Linking the SDGs and the GRI Standards. This free resource gives a breakdown of the targets under each of the 17 UN Sustainable Development Goals (SDGs) and maps how they correlate against the disclosures in the GRI Standards, including the latest published versions. Please click to access the publication on the GRI website.

The GRI has also responded to the to the consultation document on the ad personam mandate on potential need for changes to the governance and funding of EFRAG setting out how GRI and the Global Sustainability Standards Board (GSSB) can contribute to a European solution. Please click to access the letter on the EFRAG website.

The European Financial Reporting Advisory Group (EFRAG) has launched a survey on stakeholders’ views on non-financial risks and opportunities reporting practices. Please click to access the survey on the EFRAG website.

EFRAG launches survey on the post-implementation review of IFRS 10, 11 and 12

22 Jan 2021

In the context of the post-implementation review of IFRS 10, IFRS 11, and IFRS 12 launched by the IASB in December 2020, the European Financial Reporting Advisory Group (EFRAG) is inviting stakeholders to participate in a survey that addresses a number of areas of the standards that have been identified as potentially unclear.

Separate questions have been developed for preparers and users of financial statements. Auditors, standard setters and regulators are also invited to participate in the survey. The survey is open until 16 April 2021.

Please click for more information and access to the survey on the EFRAG website.

Pre-meeting summaries for the January 2021 IASB meeting

20 Jan 2021

The IASB is meeting on Tuesday 26 January 2021, by video conference. We have posted our pre-meeting summaries for the meetings that allow you to follow the IASB’s decision making more closely. For each topic to be discussed, we summarise the agenda papers made available by the IASB staff and point out the main issues to be discussed by the IASB and the staff recommendations.

Board Work Plan Update: This is a regular update of the work plan. Within the next six months the IASB expects to finalise amendments related to three projects and publish consultation documents for six projects. The Board will not start any remaining research pipeline projects or the PIR of IFRS 5. Rather, as decided at the Board’s October 2020 meeting, the Board will obtain updated information about those projects as part of the 2020 Agenda Consultation to help reassess their relative priority. The Board will be asked at a future meeting to add a narrow-scope project on disclosure requirements in relation to supply chain financing arrangements.

Maintenance and Consistent Application—IFRIC Update: The IASB will discuss the December 2020 IFRIC Update.

Disclosure Initiative— Subsidiaries that are SMEs: The IASB is developing a Standard setting out reduced disclosure requirements for subsidiaries that apply IFRS Standards but meet the definition of an SME. At this meeting, the Board will discuss disclosures about cash-generating units containing goodwill and intangible assets with indefinite useful lives and the scope of the proposed Standard. The staff recommend that it apply to entities that, at any point during their reporting period, are subsidiaries of a parent presenting consolidated financial statements applying IFRS Standards and that the scope should not be limited to single entity financial statements. They also recommend that the consultation document should be an ED.

Primary Financial Statements: In December 2019, the IASB published Exposure Draft ED/2019/7 General Presentation and Disclosures. At the December 2020 meeting the Board began discussing summarised feedback from the 215 comment letters it received, outreach activities, fieldwork and a review of academic literature. The Board did not discuss four of the 11 papers and at this meeting will continue its discussions. The staff are also presenting a redeliberation plan.

Our pre-meet­ing summaries are available on our January meeting notes page and will be sup­ple­mented with our popular meeting notes after the meeting.

February 2021 IFRS Interpretations Committee meeting agenda posted

20 Jan 2021

The IFRS Interpretations Committee has posted the agenda for its next meeting, which will be held by video conference on 2 February 2021.

The Committee will discuss the following:

  • Ad­min­is­tra­tive matters
  • IFRS 10 and IFRS 16 — Sale and leaseback of an asset in a single-asset entity
  • IAS 2 — Costs necessary to sell inventories
  • IAS 10 — Preparation of financial statements when an entity is no longer a going concern
  • Work in progress

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.

Summary of the December 2020 ASAF meeting now available

19 Jan 2021

The IASB staff have published a summary of the Accounting Standards Advisory Forum (ASAF) meeting held via remote participation on 10 December 2020.

The topics covered during the meeting were the following (numbers in brackets are ref­er­ences to the cor­re­spond­ing para­graphs of the summary):

  • Rate-regulated activities (1–9): The ASAF members outlined their plans for outreach on an upcoming Exposure Draft on regulatory assets and regulatory liabilities.
  • Cryptoassets (10–18): The ASAF members provided their preliminary views on the EFRAG’s discussion paper Accounting for Crypto-assets (Liabilities) and whether they support changes to IFRS requirements.
  • Financial instruments with characteristics of equity (19–42): The ASAF members provided feedback on potential refinements to the disclosure requirements discussed in Discussion Paper Financial Instruments with Characteristics of Equity. The session included discussions on the priority of financial instruments on liquidation of an equity, disclosure on an individual entity versus consolidated basis, non-financial liabilities, legal effects, carrying amounts versus fair value, potential dilution of ordinary shares, and terms and conditions of financial instruments.
  • Dynamic Risk Management (43): The staff provided the ASAF members with an update on outreach on core dynamic risk management model.
  • Lack of Exchangeability (Amendments to IAS 21) (44–45): The ASAF members were updated on the developments on the project and were introduced to the upcoming Exposure Draft on narrow-scope amendments to IAS 21 The Effect of Changes in Foreign Exchange Rates.
  • Update and agenda planning (46–48): The ASAF members discussed the Board’s current work plan and planned topics for the March 2021 ASAF meeting.

A full summary of the meeting is available on the IASB's website.

IIRC publishes revised Framework

19 Jan 2021

The International Integrated Reporting Council (IIRC) has published revisions to the International <IR> Framework, originally released in 2013, to enable more decision-useful reporting.

The IIRC launched the revision process in February 2020 and identified three key themes of the revision: a) business model considerations, b) responsibility for an integrated report, and c) charting a path forward. The third theme was not directly related to the revision but focused on future of corporate reporting, including extended assurance and the role of technology, and was intended to inform the IIRC’s longer-term strategy.

The revisions published today focus on a simplification of the required statement of responsibility for the integrated report; improved insight into the quality and integrity of the underlying reporting process; a clearer distinction between outputs and outcomes; and a greater emphasis on the balanced reporting of outcomes and value preservation and erosion scenarios. The press release states:

As business resilience is tested so severely in the wake of the global pandemic, climate change and growing inequality, effective integrated thinking and reporting is more important than ever. We believe these revisions can help businesses deliver more robust, balanced reporting. The revisions are also aligned with our efforts to develop a global, comprehensive corporate reporting system.

Please click to access the following information on the IIRC website:

IASB announces webinar on discussion paper on business combinations under common control

18 Jan 2021

On 30 November 2020, the International Accounting Standards Board (IASB) published a discussion paper DP/2020/2 'Business Combinations under Common Control'. The IASB has now announced a live webinar that will provide an overview of the discussion paper, explain the Board’s preliminary views and give the viewers an opportunity to ask questions.

The webinar will be held on 27 January 2021.  For the convenience of stakeholders in different time zones, there will be two sessions of the webinar:

  • 09:00-10:00 GMT
  • 15:00-16:00 GMT

To register for the webcast or for more information, please see the press release on the IASB's website.

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