April

IFRS Foundation seeks IASB Board members

15 Apr 2021

The IFRS Foundation Trustees are seeking to appoint four new Board members, two from Europe and two from the Americas.

IASB members are appointed for an initial five-year term with the pos­si­bil­ity of being reap­pointed for another three years (in ex­cep­tional cir­cum­stances for another five years). Nom­i­na­tions for IASB Board mem­ber­ship close on 30 June 2021.

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

Pre-meeting summaries for the April 2021 IFRS Interpretations Committee meeting

15 Apr 2021

The Committee meets on Tuesday 20 April 2021, via video conference. The Committee will discuss the comment letter analyses for three tentative agenda decisions.

Comments on tentative agenda decisions

IAS 19 Employee Benefits—Attributing Benefit to Periods of Service: In December 2020, the Committee discussed the periods of service an entity attributes the benefit for a defined benefit plan when the amount of the retirement benefit to which an employee is entitled depends on the length of services before retirement. The Committee concluded that the entity attributes the period of service to only the last 16 years of employee services. A number of respondents commented that the Committee should not rule out the possibility of attributing the obligation from the date of employment applying the overarching objective in IAS 19:1.

The staff continue to support their view through analysis of these comments and conclude that the agenda decision should be finalised with some changes.

IAS 1 Presentation of Financial Statements—Classification of Debt with Covenants as Current or Non-current: In December 2020, the Committee discussed the informal feedback and enquiries received concerning the different interpretations arising from the application of recent amendments to IAS 1 related to the classification of liabilities. In the meeting, the Committee members generally agreed with the analysis of how an entity determines whether it has "the right to defer settlement" when a long-term liability is subject to a condition and its compliance with the condition is tested at dates after the reporting date, applying the amended IAS 1, in the three cases described. However, almost all of the respondents expressed concerns about the outcome of applying the IAS 1 amendments and suggested the matter be referred to the Board.

The staff recommend reporting the matter to the Board but at the same time, asks whether the Committee wishes to finalise the agenda decision in view of the fact that that the principles and requirements in IFRS Standards provide an adequate basis for the conclusion reached in the three cases described in the fact pattern.

IFRS 9 Financial Instruments—Hedging Variability in Cash Flows due to Real Interest Rates: In December 2020, the Committee discussed whether a hedge of the variability in cash flows arising from the changes in the real interest rate could rebut the presumption in IFRS 9:B6.3.13 and be accounted for as a cash flow hedge. The Committee members generally agreed with the staff's conclusion that hedge accounting cannot be applied to the inflation swap in the fact pattern described. Half of the respondents to the tentative agenda decision did not agree with the discussion explaining that cash flow hedge accounting could not be applied. The staff analysed the reasons for the disagreement and continue to support the conclusion in the agenda decision. The staff recommend the agenda decision be finalised.

Work in progress: The staff are analysing requests related to the accounting for power purchase agreements in a gross pool electricity market.

The full agenda for the meeting and our com­pre­hen­sive pre-meet­ing summaries can be found here.

We comment on two IFRS Interpretations Committee tentative agenda decisions

14 Apr 2021

We have published our comment letters on IFRS Interpretations Committee tentative agenda decisions related to IAS 2 and IAS 10, as published in the February 2021 IFRIC Update.

More in­for­ma­tion about the issues is set out below:

Issue

Agenda decision supported?

More in­for­ma­tion

IAS 2 — Costs Necessary to Sell Inventories

We do not agree with the IFRS Interpretations Committee’s decision not to add this item onto its agenda as we do not agree with the conclusion that has been reached in the agenda decision, both on technical and practical grounds.

o    Deloitte comment letter

o    Committee dis­cus­sion

IAS 10 — Preparation of Financial Statements when an Entity is No Longer a Going Concern  

Yes

o    Deloitte comment letter

o    Committee dis­cus­sion

Click to access all our comment letters to the IASB, IFRS Foun­da­tion, and IFRS In­ter­pre­ta­tions Committee.

IFRS Foundation announces new Board member

14 Apr 2021

The Trustees of the IFRS Foundation have announced the appointment of Bertrand Perrin as IASB Board member.

Mr Perrin has extensive experience as a preparer and has worked closely with the Board and the Foundation for several years, most recently as a member of the IFRS Interpretations Committee. He is currently also serving as a member of the EFRAG’s Advisory Panel on Intangibles and is the Director of Accounting Standards and Special Projects at Vivendi. Mr Perrin will fill the European seat, succeeding Françoise Flores, whose term will end at the end of June.

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

EFRAG draft comment letter on the IASB's proposed new standard on rate-regulated activities

14 Apr 2021

The European Financial Reporting Advisory Group (EFRAG) has issued a draft comment letter on the IASB exposure draft ED/2021/1 'Regulatory Assets and Regulatory Liabilities'.

The proposed new standard is intended to replace IFRS 14 Regulatory Deferral Accounts.

In its draft comment letter EFRAG

  • generally agrees with the IASB proposals and considers that the benefits would outweigh the costs for both users and preparers;
  • is seeking views of constituents on possible unintended consequences on the impact of the scope outside the utilities sector;
  • supports the three proposed components of the total allowed compensation except for the treatment of construction work in progress;
  • disagrees with the proposed application of a minimum adequate rate as the discount rate for regulatory assets, when the regulatory interest rate provided is insufficient;
  • considers that the level of detail required to meet the specific disclosure objectives might impose a significant burden on reporting entities to generate the information; and
  • Questions the proposed amendments to IFRS 1 and IFRS 3.

Comments on EFRAG's draft comment letter are requested by 28 July 2021. For more information, see the press release and the draft comment letter on the EFRAG's website.

April 2021 IFRS Interpretations Committee meeting agenda posted

09 Apr 2021

The IFRS Interpretations Committee has posted the agenda for its next meeting, which will be held by video conference on 20 April 2021.

The Committee will discuss the following:

  • Administrative matters
  • Comment letter analysis:
    • IAS 19 — Attributing benefit to periods of service
    • IAS 1 — Classification of debt with covenants as current or non-current
    • IFRS 9 — Hedging variability in cash flows due to real interest rates
  • 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.

IASB pushes publication of management commentary ED to May

07 Apr 2021

While the work plan of the IASB so far stated that an exposure draft (ED) for a revised Practice Statement 1 'Management Commentary' was expected in April 2021, the IASB has now released a statement that the expected publication date has been moved to May 2021.

Since the IASB's deliberations in the project have already been completed, the shift in publication date must be attributed to an attempt to balance out comment letter periods on different consultations.

During the March 2021 IASB meeting, which discussed the comment letter period for the management commentary ED, the IASB noted the difficult balance and the constraints on respondents' capacities:

  • The IASB has several consultation documents outstanding and plans to publish several more.
  • The COVID-19 pandemic has placed constraints on stakeholder resources.
  • Respondents to the ED may also develop responses to forthcoming proposals by the Trustees to change the Foundation’s Constitution to form an international sustainability reporting standards board within the existing governance structure of the IFRS Foundation and may find it difficult to respond to both documents at the same time.

Please click for the press release on the IASB website announcing the postponement.

Report and video of an EAA workshop on the post-implementation review of IFRS 10, IFRS 11, and IFRS 12

07 Apr 2021

On 26 March 2021, the IASB, in conjunction with the European Accounting Association (EAA), held an EAA Financial Reporting Standards workshop that provided an overview of the request for information regarding the post-implementation review of IFRS 10 'Consolidated Financial Statements', IFRS 11 'Joint Arrangements', and IFRS 12 'Disclosure of Interests in Other Entities'.

The purpose of the workshop was to obtain feedback on the matters included in the request for information and to discuss relevant academic evidence.

A recording of the workshop as well as the slides used are now available on the EAA website.

ESMA publishes report on the activities of accounting enforcers and their findings within the EU in 2020

06 Apr 2021

The report provides an overview of the activities of the European Securities and Markets Authority (ESMA) and the accounting enforcers in the European Union (EU) when examining compliance of financial information provided by issuers listed on regulated markets with the applicable financial reporting framework in 2020.

European enforcers examined the financial statements of about 729 issuers representing an average examination rate of 17% of all IFRS issuers with securities listed on regulated markets. These examinations resulted in 265 actions taken to address material departures from IFRS.

Enforcers also assessed the non-financial information related to ESG for 737 issuers, covering approximately 37% of the total estimated number of issuers required to publish a non-financial statement, resulting in 39 enforcement measures.

In addition, 611 management reports were reviewed for evaluating compliance with ESMA’s guidelines on alternative performance measures, covering around 14% of all IFRS listed issuers in Europe against which were taken 93 corrective actions.

Please click to access the full report on the ESMA website.

Agenda for the April 2021 IFRS Advisory Council meeting

06 Apr 2021

An agenda has been released for the upcoming meeting of the IFRS Advisory Council which will be held by remote participation on 13 April 2021.

A summary of the agenda is set out below:

Tuesday 13 April 2021 (12:00-16:25)

  • Welcome and Chair's preview
  • Sustainability
    • Introduction
    • Breakout sessions (closed session)
  • Updates on Trustees and Board’s Activities
  • Feedback from previous Advisory Council meetings
  • Sustainability
    • Report back from breakout sessions
    • Summary by Advisory Council Chair
  • Closing remarks

Agenda papers for the meeting are available on the IASB website.

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