2021

Report on the autumn 2021 IFASS meeting

17 Dec 2021

A report has been issued summarising the discussions at the meeting of the International Forum of Accounting Standard Setters (IFASS) held by remote participation on 29 and 30 September 2021.

As reported earlier, among the topics discussed at the meeting were the NZ climate reporting standard and intangibles. In addition, Andreas Barckow delivered his first mesage to IFASS members in his new role as IASB Chair.

The full list of topics discussed at the meeting was:

  • Message from IASB Chair and responses to questions from IFASS members
  • Climate reporting
    • Presentation by New Zealand
  • Regulatory assets and regulatory liabilities
    • Presentations by Canada, EFRAG, Hong Kong, India, and Norway
  • IPSASB – Project update
  • International financial reporting for non-profit organisations – IFR4NPO project update
  • Presentations of research
    • Equity method of accounting (Japan)
    • Accounting estimation and estimates (Korea)
  • Issues surrounding separate financial statements
    • Presentations by Brazil, India, Italy, and Korea
  • Intangibles
    • Presentation of EFRAG discussion paper and research undertaken by Australia

The next meeting is to be held on 7-8 March 2022; it will also be held by remote participation.

Please click for the full report from the meeting.

IASB issues 'Investor Update' newsletter

16 Dec 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 — Anthony Scilipoti, President & CEO, Veritas Investment Research Corporation and member of the Capital Markets Advisory Committee
  • Spotlight — 2021 Greatest Hits: An update on IASB consultations
  • We need your views
  • Stay up to date
  • Resources for investors

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

IFRS Foundation proposes update to IFRS Taxonomy 2021

16 Dec 2021

The IFRS Foundation has issued a proposed IFRS Taxonomy Update, 'IFRS Taxonomy 2021 Proposed Update 3 — Initial Application of IFRS 17 and IFRS 9 — Comparative Information (Amendment to IFRS 17).

The proposed changes reflect those made by Initial Application of IFRS 17 and IFRS 9—Comparative Information, issued on 9 December.

Details on the proposed changes are available in the press release on the IASB website and in proposed update itself. Comments are requested by 17 January 2022.

IFRS Foundation announces ISSB Chair

16 Dec 2021

The Trustees of the IFRS Foundation have appointed Emmanuel Faber to lead the International Sustainability Standards Board (ISSB).

Mr Faber, who is the former Chair of the Board and CEO of Danone, will assume his role on 1 January 2022. He has been appointed for a three-year term. Mr Faber has significant global leadership experience and has long advocated the importance of sustainability information to the global capital markets and its relevance to the investment decision-making process.

The ISSB will develop the IFRS Sustainability Disclosure Standards that provide a global baseline of disclosure requirements designed to give investors high quality, globally comparable sustainability information. The ISSB will work in close cooperation with the International Accounting Standards Board (IASB) to ensure connectivity and compatibility between IFRS Accounting Standards and IFRS Sustainability Disclosure Standards.

Please click for more information in the press release on the IFRS Foundation website.

The Monitoring Board of the IFRS Foundation has issued a statement welcoming the appointment.

ESMA report on application of IFRS 7 and IFRS 9 requirements for banks’ expected credit losses

15 Dec 2021

The European Securities and Markets Authority (ESMA) has published a report that provides (1) an overview of the principles and requirements in IFRS 7 and IFRS 9 related to the measurement and disclosure of expected credit losses (ECL) by European banks and (2) recommendations on how to improve the level of compliance, comparability and transparency of those requirements.

The report focuses on the following areas:

  • General aspects of the ECL-disclosures
  • Assessment of significant increase in credit risk
  • Forward-looking information
  • Explanation of changes in loss allowances
  • Transparency of disclosures on credit risk exposures
  • ECL sensitivity disclosures

For more information, see the press release on the ESMA website.

Call for applications: Chairs of EFRAG FRB and EFRAG SRB

15 Dec 2021

The envisioned new structure of the European Financial Reporting Advisory Group (EFRAG) would see the establishment of two Boards side-by-side: the Financial Reporting Board (FRB) and the Sustainability Reporting Board (SRB). For both Boards, a call for applications for the role of Chair has now been published.

The calls for application are available on the website of the European Commission:

Applications are invited by 1 February 2022.

Report on the November 2021 IFRS Advisory Council meeting

14 Dec 2021

A summary report has been released of the meeting of the IFRS Advisory Council held by remote participation on 10 November 2021.

The par­tic­i­pants discussed:

  • Update on Trustees Ac­tiv­i­ties — Received an update on four key announcements from the 3 November United Nations Climate Change Conference (COP26), which included the decision to establish the International Sustainability Standard Board, commitment to consolidate two investor-focused international sustainability standard-setters into the ISSB, publication of the climate-related disclosures prototype and general sustainability disclosure requirements prototype, and locations of the ISSB offices.
  • Update on Board Ac­tiv­i­ties — Received an update on recent Board ac­tiv­i­ties which include connectivity between the IASB and ISSB, resources to support the IASB, cryptocurrencies, intangible assets, goodwill and impairment, management commentary, pension accounting, endorsement, and further updates that would be beneficial to the Advisory Council.
  • Feedback from previous Advisory Council meetings — Updated on how previous discussions by members have been applied to the work of the IASB and IFRS Foundation.
  • Update on sustainability-related reporting — Updated on the latest developments related to the ISSB’s establishment.

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

TRWG provides recommendations to the ISSB

14 Dec 2021

The IFRS Foundation has made available a webcast that provides the Technical Readiness Working Group’s (TRWG) recommendations to the International Sustainability Standards Board (ISSB).

The webcast provides background information on the TRWG as well as the preparatory work and recommendations by the TRWG related to:

  • Architecture of standards
  • General requirements prototype sustainability matters that affect investors’ assessment of enterprise value.
  • Climate prototype
  • Overview of five other deliverables
  • Other immediate priorities.

The webcast features IFRS Foundation Trustee Lucrezia Reichlin, along with TRWG members Ravi Abeywardana (Technical Director at the Climate Disclosure Standards Board); Veronica Poole (Global IFRS and corporate reporting leader at Deloitte and who represented the World Economic Forum on the TRWG); Spencer Powell (Performance Lead at the Impact Management Project); and Bryan Esterly (Chief Technical Officer for the SASB Standards at the Value Reporting Foundation).

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

New CMAC members

14 Dec 2021

The IASB's Capital Markets Advisory Committee (CMAC) announces that four new members have been appointed.

Enitan Adebonojo, Jacques de Greling, Kenneth Lee and Ge Xiabo will join the CMAC for a three-year term beginning 1 January 2022, renewable once for an additional three-year term.

Additional information, including information on the backgrounds of the new members, is available on the IASB website.

ITF calls for support for the ISSB

13 Dec 2021

The industry-led Impact Taskforce (ITF) invited by the G7 Presidency to help answer the question of how the volume and effectiveness of private capital seeking to have a positive social and environmental impact can be accelerated has published its final report.

The report notes that the opportunity to mobilise private capital for public good at an unprecedented scale is real. While a fragmented approach undermines momentum and disclosure of non-financial information remains unfit for purpose at the moment, formation of the IFRS Foundation's International Sustainability Standards Board (ISSB) is hailed as good news. The ITF calls on governments to support and participate in upcoming consultations, ensuring that the ISSB: has an inclusive governance model; balances social and environmental issues; acknowledges and reflects realities of both emerging and developed economies; actively engages small and medium enterprises (SMEs) along the value chain; and is swiftly followed by an assurance regime for all data relevant to enterprise value for public companies.

The ITF also urgently calls for mandatory accounting for impact as a destination and notes that the journey to this goal will require: greater transparency, building on harmonised standards, strong mechanisms to ensure integrity of data, analysis and governance. The report analyses theses aspects as follows:

Transparency

  • Mandatory impact disclosure is necessary to achieve the SDGs and accelerate behavioural change in capital markets.
  • While mandatory reporting rules are being rolled out, voluntary disclosure practices must improve to meet today’s urgent social and environmental challenges.
  • Investors should be transparent too.

Harmonisation

  • A global reporting “baseline” should cover, as a minimum, social and environmental impacts that affect enterprise value.
  • Endorsing a baseline is not enough; governments should urgently “build” on the global baseline and push for standards that explicitly recognise and incorporate the impact on all stakeholders.

Integrity

  • Putting in place secure, interoperable data infrastructure is essential for telling the full story.
  • Decision-making processes must include those most affected; to ensure impact integrity, a wide range of stakeholders should inform and participate in decision-making.

Small and medium enterprises

  • Successful impact transparency, harmonisation, and integrity will rely on the inclusion and engagement of SMEs.

Emerging markets

  • Capital markets want better information on impact for all stakeholders – and in an increasingly interconnected world, this must include truly global voices.

The report sums up the key messages as follows. There is an urgent need to narrow the gap between rhetoric and delivery. Private capital and enterprise are playing a critical role. The challenges should not be underestimated, but there is a window of opportunity.

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

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