October

Report on the September 2021 IFRS Advisory Council meeting

20 Oct 2021

A summary report has been released of the meeting of the IFRS Advisory Council held by remote participation on 13 September 2021.

The par­tic­i­pants discussed:

  • Update on Trustees Ac­tiv­i­ties — Received an update on recent Trustee ac­tiv­i­ties which included the G7 and G20 meetings, the FSB report on the IFRS Foundation sustainability-related reporting, IFRS Foundation Constitution and work of the Technical Readiness Working Group, funding and establishment of the International Sustainability Standards Board.
  • Update on Board Activities — Received an update on recent Board activities which include changes in the membership of the Board, publishing of three consultation papers, the addition of three projects to the workplan, and other significant developments. In addition, the Advisory Council discussed the review of the Management Commentary Practice Statement and the work of the ISSB, post-implementation review of IFRS 9, the Dynamic Risk Management project, and the work being conducted between the IASB and FASB to maintain the converged goodwill and impairment project.
  • Update on the sustainability-related reporting project — Discussed matters related to IASB, TRWG, and ISSB.
  • Update on the IFRS Foundation Constitution’s consultation — Discussed the objective of the IFRS Foundation and how the Constitution can articulate the concept of interconnectivity between the IASB and the ISSB. In addition, the Council discussed the naming and branding of the new Board and its Standards.
  • Update on sustainability-related work of the US SEC — Updated on the progress of the US SEC’s climate change disclosures proposals
  • Update on the TRWG — Presented with an overview of the TRWG structure, proposed architecture for new standards, connectivity between the IASB and the ISSB, and outreach programme. The Council discussed the importance of collaborating with relevant parties in each region to collect a diverse range of feedback, importance of industry-specific metrics, how to assess what material for its sustainability-related disclosures, and achieving coordination between global baseline and jurisdictional initiatives.

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

FASB and ASBJ hold biannual meeting

20 Oct 2021

On 18-19 October 2021, the FASB and the Accounting Standards Board of Japan (ASBJ) held a joint virtual meeting. The meeting was the 30th in a series of biannual meetings between the two standard setters.

The two boards informed each other about their respective activities and exchanged views on technical topics in which they both have an interest, including accounting for goodwill and accounting for financial instruments.

The next meeting between the FASB and ASBJ is expected to be held in the first half of 2022. For more information about the latest meeting, see the press release on the ASBJ website.

Report of the September 2021 SME Implementation Group meeting

19 Oct 2021

The IASB has issued a report on the SME Implementation Group (SMEIG) meeting held on 9 September 2021 via video conference.

The topics discussed at the meeting were:

  • update on work completed;
  • proposals relating to the Conceptual Framework and to financial instruments;
  • alignment with IFRS 16 Leases;
  • Section 28 of the IFRS for SMEs Employee Benefits;
  • update to multiple sections of the IFRS for SMEs for amendments to IFRSs and IFRIC Interpretations;
  • alignment with IFRS 14 Regulatory Deferral Accounts;
  • other topics; and
  • subsidiaries without public accountability.

The report from the meeting is available on the IASB website.

Communiqué from latest China-Japan-Korea accounting standard setters meeting

18 Oct 2021

A communiqué has been issued from a meeting of the standard setters from China, Japan and the Republic of Korea held by video conference on 13 October 2021.

In addition to representatives from the three countries' standard-setting bodies, observers from the IASB and guests from Hong Kong and Macao attended the meeting.

The three countries presented and shared experiences and views on the following accounting topics:

  • Independent Supplementary Temporary Standards (e.g., Covid-19-related amendments to IFRS 16)
  • Business Combinations under Common Control
  • Intangible assets, with a focus on crypto-assets

Please click for the full communiqué (link to KASB website).

October 2021 IASB meeting agenda posted

15 Oct 2021

The IASB has posted the agenda for its next meeting, which will be held in its office in London on 25–28 October 2021. There are ten topics on the agenda.

The Board will discuss the following:

  • Second comprehensive review of the IFRS for SMEs Standard
  • Goodwill and impairment
  • Post implementation review of IFRS 10–12
  • Equity method
  • Main­te­nance and con­sis­tent ap­pli­ca­tion
  • Pensions benefits that depend on asset returns
  • IFRS taxonomy due process
  • Primary financial statements
  • Amendments to IFRS 17
  • Rate-regulated activities

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.

New TCFD status report, additional and updated guidance

15 Oct 2021

The Task Force on Climate-related Financial Disclosures (TCFD) set up by the Financial Stability Board (FSB) to develop voluntary, consistent climate-related financial risk disclosures for use by companies in providing information to lenders, insurers, investors and other stakeholders has published a fourth status report providing an overview of the extent to which companies in their 2020 reports included information aligned with the core TCFD recommendations published in June 2017.

The TCFD found that:

  • Disclosure increased more between 2019 and 2020 than in any previous year assessed, consistent with global momentum around climate-related reporting. However, significant progress is still needed as an average of only one in three companies reviewed disclosed climate-related information aligned with the TCFD recommendations.
  • Companies remain more likely to disclose information on their climate-related risks and opportunities than on any other recommended disclosure, with over half of the companies reviewed including such information in their 2020 reports.
  • Disclosure of the resilience of companies’ strategies under different climate-related scenarios is still the least reported recommended disclosure, however, disclosure increased from 5% of companies in 2018 to 13% in 2020.
  • Although the TCFD recommends disclosure of governance regardless of materiality, the Governance recommendation remains the least disclosed recommendation with the two Governance recommended disclosures the second and third least disclosed.
  • Materials and buildings companies now lead on disclosure. The average level of disclosure across the 11 recommended disclosures for fiscal year 2020 was 38% for materials and buildings companies.
  • The insurance industry significantly increased its average level of disclosure by 11 percentage points between 2019 and 2020, and now leads all groups by at least 15 percentage points in disclosure of risk management processes.
  • Europe remains the leading region for disclosures, with average level of reporting across the 11 recommended disclosures from fiscal year 2020 now at half of European companies assessed. European companies have increased their average disclosure by 15 percentage points since 2019, and now disclose 16 percentage points more than the next closest region.

The TCFD has also published two additional documents: Guidance on Metrics, Targets, and Transition Plans to support preparers in disclosing decision-useful information and linking those disclosures with estimates of financial impacts and Implementing the Recommendations of the Task Force on Climate-related Financial Disclosures, which updates and replaces Implementing the Recommendations of the TCFD initially published in 2017.

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

Third IVSC perspectives paper on ESG and business valuation

15 Oct 2021

The International Valuation Standards Council (IVSC) has published a third perspectives paper 'ESG and Real Estate Valuation' that focuses on environmental factors that relate to real estate valuations, especially on valuations of existing real estate.

The paper is a follow-up to the perspectives papers A Framework to Assess ESG Value Creation released in May 2021 and ESG and Business Valuation released in March 2021, which explore how ESG characteristics are, or can be, incorporated into the value measurement process.

Please click to access ESG and Real Estate Valuation on the IVSC website.

IASB video on proposed reduced disclosure IFRS

14 Oct 2021

The IASB has posted a video hosted by IASB Board Member Jianqiao Lu which provides an overview of the exposure draft (ED), ‘Subsidiaries without Public Accountability: Disclosures’.

On 26 July 2021, the IASB issued the ED that would permit eligible subsidiaries that are small and medium-sized entities (SMEs) to apply IFRSs but with reduced disclosure requirements. Comments on the ED are due by 31 January 2022.

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

Agenda for the October 2021 DPOC meeting

14 Oct 2021

The Due Process Oversight Committee (DPOC) will hold its next meeting on 19 October by conference call.

The agenda for the DPOC meeting is summarised below.

Tuesday, 19 October 2021 (13:15–14:00)

  • Introduction and actions from the DPOC meeting held on 16 June 2021
  • Monitoring compliance with due process:
    • Technical activities
    • Annual reports on Board and IFRS Interpretations Committee activities:
      • Consultative groups
      • Annual reporting protocol
      • Educational material due process
  • DPOC matters
    • Correspondence: update since the agenda was circulated
  • Summary

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

FRC publishes thematic review findings on IAS 37

14 Oct 2021

The UK Financial Reporting Council (FRC) has published a thematic review to help companies improve the quality of their corporate reporting in relation to IAS 37 'Provisions, Contingent Liabilities and Contingent Assets'.

Provisions and contingent liabilities reporting is of particular importance to investors owing to the forward-looking information it can provide about a company’s exposures. The issues giving rise to provisions and contingent liabilities are often long-term in nature, such as climate change and other environmental obligations, or significant to the assessment of future business performance, for example, onerous contracts and regulatory penalties or compensation.

The FRC’s review, which considered a sample of 20 companies’ annual reports and the relevant reporting requirements, found scope for improvements in several areas, in particular in regarding the following aspects:

  • explaining how the amounts of expected outflows have been estimated, identifying the key assumptions applied and describing the associated uncertainties;
  • disclosing the phasing of outflows companies expect to see as they utilise their provisions; and
  • describing the underlying costs for which companies make provisions.

The report outlines the FRC's expectations for future disclosures and identifies examples of good practice, especially in the context of disclosure of entity-specific accounting policies and the provision of more quantitative information about contingent liabilities.

For access to the report, please see the FRC website.

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