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August

We submit two comment letters to the IASB

31 Aug 2021

We have commented on the IASB discussion paper 'Business Combinations under Common Control' and on exposure draft 'Lack of Exchangeability (Proposed amendments to IAS 21)'.

Regarding the discussion paper Business Combinations under Common Control, we generally agree with the Board’s preliminary views as expressed in the discussion paper. In particular, we agree that different methods should be applied depending on the characteristics of the receiving entity. We agree that when the receiving entity does not have non-controlling shareholders, use of a book-value method is justified by cost-benefit considerations. However, we do not agree that the receiving entity should be required to use the transferred entity’s book values. We also agree that the acquisition method is likely to provide more relevant information to investors that must rely on general purpose financial statements of the receiving entity to obtain the information they require. Accordingly, we believe that the application of the acquisition method should be required more broadly than what is proposed in the discussion paper. Please click to download our full comment letter here.

Regarding the exposure draft Lack of Exchangeability (Proposed amendments to IAS 21), we acknowledge that the use of an official exchange rate may not produce meaningful results when this rate is not available to the entity. However, we do not believe that attempting to estimate the exchange rate that would have been available if the currency had been exchangeable would produce meaningful results either. Accordingly, we believe that the Board should seek a solution that gives precedence to comparability. Please click to download our full comment letter here.

Updated IPSAS-IFRS alignment dashboard

30 Aug 2021

The International Public Sector Accounting Standards Board (IPSASB), which develops the International Public Sector Accounting Standards (IPSAS) for financial reporting by governments and other public sector entities, has released an updated IPSAS-IFRS alignment dashboard showing how far individual IPSAS are aligned with corresponding IFRSs.

Please click to access the updated alignment dashboard prepared for the September 2021 IPSASB meeting on the IPSASB website.

In this context, please see also our 2021 edition of IPSAS in your pocket published in February.

EFRAG discussion paper on intangibles

27 Aug 2021

The European Financial Reporting Advisory Group (EFRAG) has published a discussion paper 'Better information on intangibles – which is the best way to go?'.

The discussion paper notes that that the value relevance of financial statements is decreasing, which could be due to financial statements not reflecting information about intangibles, which has become more important for more entities than previously. Insufficient information on intangibles could affect the company’s market value due to information asymmetry, result in an inefficient capital allocation in society and make assessment of the management’s stewardship difficult. It is also difficult for users to compare entities that grow organically with those growing by means of acquisition, as current IFRSs generally require acquired intangibles to be recognised, while internally generated intangibles can only be recognised in specific circumstances.

The discussion paper considers three approaches for better information on intangibles:

  • Recognition and measurement in the primary financial statements;
  • Information on specific intangibles in the notes to the financial statements or in the management report;
  • Information on future-oriented expenses and risk/opportunity factors that may affect future performance in the notes to the financial statements or in the management report.

The scope of EFRAG’s discussions goes beyond the existing definition of assets in financial reporting and also covers sources of possible economic benefits that would not be controlled by an entity. Therefore, the DP uses the term “intangibles” instead of “intangible assets”. The press release also notes that future reporting on intangibles and value creation is a key area for connecting financial and sustainability reporting.

Comments on the discussion paper are requested by 30 June 2022.

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

IASB issues 'Investor Update' newsletter

26 Aug 2021

The IASB has issued the latest edition of its newsletter 'Investor Update', which profiles recently introduced IFRS Standards and other changes that are in the pipeline as well as how those changes may affect companies and performance.

This issue features:

  • In profile — Philip Robinson, accounting specialist in the Corporate Finance Group at Moody's
  • We need your views
  • Stay up to date
  • Resources for investors

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

Upcoming World Standard-setters meeting in September

26 Aug 2021

The next World Standard-setters meeting will be held on 27–28 September 2021. It will be a fully virtual conference. A preliminary programme and additional information are available on the IASB website.

There will be pre-conference video updates about the activities of the IASB, the activities of the IFRS Interpretations Committee and the sustainability initiative of the IFRS Foundation. The conference itself will feature live Q&A sessions on these updates to which participants can submit questions in advance.

There is also a pre-conference survey participants are invited to complete that surveys how the pandemic is affecting how national standard-setters engage with the IFRS Foundation. There will be a panel discussion on the results of the survey during the conference.

A summary of the preliminary programme for the conference is set out below:

Monday, 27 September 2021 (09:30 - 15:30)

  • Networking rooms
    • Translations adoption copyright
    • IFRS publications
    • Asia-Oceania regional group
    • Africa regional group
  • Q&A on sustainability reporting
  • Welcome address by the new IASB Chair
  • How has the pandemic changed engagement with the IFRS Foundation?
  • The future of the IASB work plan — Agenda consultation: what’s next?
  • Breakout sessions
    • Reduced disclosures for subsidiaries
    • Disclosure requirements in IFRSs — A pilot approach
    • Post-implementation review of IFRS 9 — Classification and measurement
  • Networking rooms
    • Translations adoption copyright
    • IFRS publications
    • Europe regional group
    • Americas regional group

Tuesday, 28 September 2021 (10:00 - 15:30)

  • Networking rooms
    • Translations adoption copyright
    • IFRS publications
    • Asia-Oceania regional group
    • Africa regional group
  • Q&A on IASB and IFRS IC activities
  • Towards a revised Management commentary Practice Statement
  • Breakout sessions
    • Reduced disclosures for subsidiaries
    • Disclosure requirements in IFRSs — A pilot approach
    • Post-implementation review of IFRS 9 — Classification and measurement
  • Networking rooms
    • Translations adoption copyright
    • IFRS publications
    • Europe regional group
    • Americas regional group
  • Closing remarks

Please click to access all information currently available on the IASB website.

The WSS meeting will be immediately followed by a meeting of the International Forum of Accounting Standard Setters (IFASS) on 29-30 September 2021.

Hyperinflationary economies - updated IPTF watch list available

23 Aug 2021

IAS 29 'Financial Reporting in Hyperinflationary Economies' defines and provides general guidance for assessing whether a particular jurisdiction's economy is hyperinflationary. But the IASB does not identify specific jurisdictions. The International Practices Task Force (IPTF) of the Centre for Audit Quality (CAQ) monitors the status of 'highly inflationary' countries. While it monitors the status of highly inflationary countries for the purposes of applying US GAAP, its criteria for identifying such countries are similar to those for identifying 'hyperinflationary economies' under IAS 29.

The IPTF's discussion document for the 18 May 2021 meeting is now available and states the following view of the Task Force:

Countries with three-year cumulative inflation rates exceeding 100%:

  • Argentina
  • Iran
  • Lebanon
  • South Sudan
  • Sudan
  • Venezuela
  • Zimbabwe

Countries with projected three-year cumulative inflation rates exceeding 100%:

  • Suriname

Countries where the three-year cumulative inflation rates had exceeded 100% in recent years:

There are no countries in this category for this period.

Countries with recent three-year cumulative inflation rates exceeding 100% after a spike in inflation in a discrete period:

There are no countries in this category for this period.

Countries with projected three-year cumulative inflation rates between 70% and 100% or with a significant (25% or more) increase in inflation during the current period

  • Angola
  • Haiti
  • Liberia
  • Yemen

The IPTF also notes that there may be additional countries with three-year cumulative inflation rates exceeding 100% or that should be monitored which are not included in the analysis as the necessary data is not available. An example cited is Syria.

The full list, including exact numbers, detailed explanations of the calculation of the numbers, and observations of the Task Force is available on the CAQ website.

IFRS Foundation Trustees appoint three IFRS Interpretations Committee members

17 Aug 2021

The Trustees of the IFRS Foundation have announced the appointments of Andre Besson, Karen Higgins and M P Vijay Kumar as IFRS Interpretations Committee members. The appointments are effective immediately and are for a three-year period. They replace outgoing members Jongsoo Han, Robert Uhl, and Bertrand Perrin.

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

Summary of the June 2021 ASAF meeting now available

11 Aug 2021

The IASB staff have published a summary of the Accounting Standards Advisory Forum (ASAF) meeting held via remote participation on 28–29 June 2021.

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

  • Business combinations under common control (1–13): The ASAF members discussed the Board’s outreach and provided feedback on when and how the acquisition method and a book-value method should be used to report business combinations under common controls.
  • Third agenda con­sul­ta­tion (14–39): The ASAF members discussed the strategic direction and balance of the Board’s activities, criteria for assessing the priority of financial reporting issues, and financial reporting issues that could be added to the work plan.
  • Sustainability-related reporting (40–44): The ASAF members were presented with an update on the Trustees project on sustainability.
  • Rate-regulated activities (45–66): ASAF members shared their views on Exposure Draft Regulatory Assets and Regulatory Liabilities. Specifically, the members discussed the scope, total allowed compensation, measurement, interaction with IFRS 12, and other topics.
  • Goodwill and impairment (67–84): ASAF members shared their initial views on key items for the Board to consider for redeliberation and issues related to convergence between the Board’s preliminary views and US GAAP.
  • Disclosure initiative — Targeted Standards-level review of disclosures (85–91): ASAF members discussed the outreach and fieldwork performed on Exposure Draft Disclosure Requirements in IFRS Standards — A Pilot Approach.
  • Agenda planning (92–96): The ASAF members discussed topics for the October 2021 ASAF meeting.

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

IPSASB proposes improvements to its Standards

06 Aug 2021

The International Public Sector Accounting Standards Board (IPSASB) has released an exposure draft that proposes non-substantive changes to IPSAS.

Exposure Draft 80 Improvements to IPSAS, 2021 proposes changes based off feedback received from stakeholders and publications by the IASB. Comments are requested by 30 September 2021.

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

EFRAG draft comment letter on the IASB's proposed narrow-scope amendment to IFRS 17

05 Aug 2021

The European Financial Reporting Advisory Group (EFRAG) has issued a draft comment letter on the IASB exposure draft ED/2021/8 'Initial Application of IFRS 17 and IFRS 9 — Comparative Information (Proposed amendment to IFRS 17)'.

In the draft comment letter, EFRAG expresses its appreciation for the IASB’s swift response and delivery of the exposure draft. Also, EFRAG commends the IASB for addressing most of the comments raised by European constituents in this area. Overall, EFRAG agrees with the IASB proposals in the exposure draft as they form a clear improvement over the current situation.

Comments on EFRAG's draft comment letter are requested by 15 September 2021. For more information, see the press release and the draft comment letter on the EFRAG website.

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