IFRS Foundation Trustees hold January 2022 meeting

31 Jan 2022

The IFRS Foundation Trustees met by video conference on 25 January 2022.

The meeting focused on ISSB nominations. The Trustees received a report related to the recently completed search for a Vice-Chair of the ISSB and the search for ISSB members. The Chair of the ISSB also provided an update on appointments planned for the role of Special Advisor to the ISSB Chair.

For more in­for­ma­tion, see the full summary on the IFRS Foun­da­tion Trustees’ meeting on the IASB’s website.

Deloitte comments on IASB’s proposal to reduce disclosure requirements

31 Jan 2022

We have commented on the IASB's exposure draft ‘Subsidiaries without Public Accountability: Disclosures’ published in July 2021.

The ED would permit eligible subsidiaries that are small and medium-sized entities (SMEs) to apply IFRSs but with reduced disclosure requirements.

We agree with the objective of the draft Standard which responds to requests from stakeholders and expect that the draft Standard will significantly reduce the cost of preparing financial statements applying IFRS Standards for subsidiaries of parents that report using these standards.  We agree that the Standard should only be available to subsidiaries that do not have public accountability. However, in addition to the requirement to meet the definition of an entity without public accountability proposed in the draft Standard, we suggest that an entity would be permitted to apply the draft Standard only if all of its owners, including those not otherwise entitled to vote, and outsiders for which the entity holds assets in a fiduciary capacity have been informed about, and do not object to, the entity applying the draft Standard. We also agree with the proposal to limit the scope to subsidiaries of a parent that produces consolidated

financial statements available for public use that comply with IFRS Standards and with the approach taken to developing the proposed disclosure requirements using the IFRS for SMEs Standard as a starting point and generally agree with the proposed disclosures that result from the application of this approach.

Please click to download our full comment letter.

IASB issues podcast on latest Board developments (January 2022)

31 Jan 2022

The IASB has released a podcast featuring IASB Chair Andreas Barckow and IASB Vice-Chair Sue Lloyd discussing deliberations at the January 2022 IASB meeting.

High­lights of the podcast include dis­cus­sions on: 

  • Updates and on goodwill and impairment and management commentary projects;
  • Feedback summary on the lack of exchangeability project;
  • Developments in the proposed taxonomy update for IFRS 17 amendments;
  • Stakeholder feedback on business combinations under common control;
  • Deliberations on the primary financial statements;
  • Role of post-implementation reviews.

The podcast can be accessed through the press release on the IASB website.

Please click to view the detailed notes taken by Deloitte observers for the IASB meeting.

Deloitte comments on IASB’s Request for Information on the post-implementation review of IFRS 9

28 Jan 2022

We have commented on the IASB's Request for Information — Post-implementation Review IFRS 9 Financial Instruments Classification and Measurement (RFI) published in September 2021.

The RFI seeked comments from stakeholders to identify whether the classification and measurement requirements in IFRS 9 'Financial Instruments' provide information that is useful to users of financial statements; whether there are requirements that are difficult to implement and may prevent the consistent implementation of the standard; and whether unexpected costs have arisen in connection with applying or enforcing the standard.

We support the efforts of the Board believe the classification and measurement requirements of IFRS 9 have generally worked well and as intended, leading to useful information for users of financial statements about the amount, timing and uncertainty of future cash flows. However, we believe there are areas that could be amended to improve the usefulness of information that arises from applying the Standard and to make the Standard more relevant given changes in lending activity that have developed since the classification and measurement requirements were finalised in 2014.

Please click to download our full comment letter.

Updated IASB work plan — Analysis (January 2022)

28 Jan 2022

Following the IASB's January 2022 meeting, we have analysed the IASB work plan to see what changes have resulted from the meetings and other developments since the work plan was last revised in December 2021.

Below is an analysis of all changes made to the work plan since our last analysis on 17 December 2021.

Stan­dard-set­ting projects

  • Management Commentary — Discussion on the feedback from the exposure draft is expected in March 2022 (previously Q1 2022).

Main­te­nance projects

  • Lack of Exchangeability (Amendments to IAS 21) — Decision on the direction of the project is expected in Q2 2022.
  • Non-current Liabilities with Convenants (Amendments to IAS 1) — Discussion on the feedback from the exposure draft is now expected in Q2 2022 (previously H1 2022).
  • Provisions — Targeted Improvements — Decision on the project’s direction is now expected in February 2022.
  • Supplier Finance Arrange­ments — Feedback on the exposure draft is expected in Q2 2022 (previously H1 2022).

Research projects

  • Business Com­bi­na­tions under Common Control — The direction of the project phase is the current milestone; no expected date is given.
  • Equity Method — Decision of the direction of the project is expected in March 2022 (pre­vi­ously Q1 2022).
  • Post-implementation Review of IFRS 10, IFRS 11 and IFRS 12 —Feedback statement is now expected in Q2 2022 (previously H1 2022).
  • Post-implementation Review of IFRS 9 — Classification and Measurement —Discussion on the feedback to the request for information is now expected in March 2022 (pre­vi­ously H1 2022).

Other projects

  • IFRS Taxonomy Update — 2021 Tech­nol­ogy UpdateFeedback on proposed update is expected in March 2022 (previously Q1 2022).
  • IFRS Taxonomy Update — Initial Ap­pli­ca­tion of IFRS 17 and IFRS 9 — Com­par­a­tive In­for­ma­tion — IFRS Taxonomy Update is now expected in March 2022.
  • Research Programme — Project has been added to the work plan; it is not a project in its own right, but rather offers an overview of all meetings where the Board was updated on the status of the research programme.

The above is a faithful com­par­i­son of the IASB work plan at 17 December 2021 and 28 January 2022. For access to the current IASB work plan at any time, please click here.

January 2022 IASB meeting notes posted

28 Jan 2022

The IASB met in London on Tuesday 25 January 2022. We have posted our comprehensive Deloitte observer notes for all projects discussed during the meeting.

The following topics were discussed:

Maintenance and Consistent Application

In April 2021, the IASB published ED/2021/4 Lack of Exchangeability, which proposed to amend IAS 21. The comment period ended in September 2021. The purpose of this paper was to provide the IASB with a summary of feedback on the ED. There was general support for the proposals, with some suggestions. The IASB was not asked to make any decisions at this meeting.

No comments were made by IASB members about the most recent meeting of the IFRS Interpretations Committee.

Business Combinations under Common Control

The IASB published its Discussion Paper (DP) Business Combinations under Common Control (BCUCC) in November 2020. At this meeting the staff presented detailed summaries of feedback on the remaining topics from the DP: how to apply each measurement method (being the acquisition method and the book-value method) and disclosure. The feedback was very mixed. The IASB did not object to the plan for deliberating the preliminary views in the DP.

Board work plan update

The staff gave the IASB an overview of its technical projects to support decisions about whether to add or remove projects, as may be discussed in individual project papers and an assessment of overall progress on the work plan, including project prioritisation and timing. The paper set out projects completed since the last update, listed the projects out for consultation and noted that no documents are expected to be published for consultation within approximately the next six months. (Note: this conclusion relates only to the IASB. We expect the new ISSB will publish consultation documents in the next six months). There was no discussion of this paper.

Approach to prioritising matters arising from post-implementation reviews

The staff have developed proposals to provide a more consistent approach to prioritising matters arising from post-implementation reviews (PIRs). The IASB supported the recommendations, which consider the nature of the evidence collected, what factors should lead to further action and how to prioritise projects.

Feedback on IFRS Taxonomy 2021—Proposed Update

The staff gave an oral update on responses to PTU/2021/3 IFRS Taxonomy 2021—Proposed Update 3—Initial Application of IFRS 17 and IFRS 9—Comparative Information (Amendment to IFRS 17). Only two comment letters were received and the staff expect to finalise the update in March.

Primary Financial Statements

The IASB decided to confirm the requirement for an entity to: disclose a description of why an MPM communicates management’s view of performance, including an explanation of how the MPM is calculated and how the measure provides useful information about the entity’s performance; disclose a reconciliation between an MPM and the most directly comparable subtotal or total specified in the Standards; add a requirement for an entity to disclose, for each item reconciling an MPM to the most directly comparable subtotal or total specified by IFRS Standards, the amount(s) related to each line item(s) in the statement(s) of financial performance. The IASB decided not to specify that one way to meet this requirement is to use a side-by-side columnar format for the reconciliation, but will provide an illustrative example using side-by-side disclosure.

The staff had recommended the IASB retain the proposed requirements to disclose the income tax effects and the effect on NCI for each item disclosed in a reconciliation between an MPM and the most directly comparable IFRS specified subtotal or total and how the entity determined the income tax effect. The IASB decided not to vote on this paper before further research has been conducted by the staff.

Please click to access the detailed notes taken by Deloitte observers for the entire meeting.

IFRS Foundation announces ISSB Vice-Chair and Special Advisor to the ISSB Chair

27 Jan 2022

The Trustees of the IFRS Foundation have announced the appointment of Sue Lloyd as Vice-Chair of the International Sustainability Standards Board (ISSB). In addition, Janine Guillot has been appointed as Special Advisor to the ISSB Chair.

Ms Lloyd currently serves as Vice-Chair of the International Accounting Standards Board (IASB) and Chair of the IFRS Interpretations Committee and will step down from these roles to take up her new position on 1 March 2022. Ms Lloyd has been appointed for an initial four-year term. The press release notes that her appointment completes the current search for ISSB Vice-Chair(s). It also notes that the Trustees have begun the process of identifying successors for her current roles.

Ms Guillot is the current Chief Executive Officer of the Value Reporting Foundation (VRF), which was formed through the merger of the Sustainability Accounting Standards Board (SASB) and the International Integrated Reporting Council (IIRC) in 2021. She has been appointed effective 1 February 2022. Ms Guillot will provide strategic advice and counsel to the Chair of the ISSB with specific responsibilities for the consolidation of the VRF into the IFRS Foundation and the establishment of the ISSB. She will serve a two-year term, renewable for one year. A further Special Advisor to the ISSB Chair from the Asia-Oceania region is expected to be appointed who will focus on the ISSB’s engagement with developing and emerging economies, as well as with smaller companies.

The press release also highlights that the Trustees are progressing with their search for the remaining ISSB members, with potential candidates encouraged to submit their applications. Interviews for these roles are scheduled to begin in early February 2022.

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

Call for applications: Members of the EFRAG SRB

27 Jan 2022

The envisioned new structure of the European Financial Reporting Advisory Group (EFRAG) would see the establishment of a second Board: the Sustainability Reporting Board (SRB). A call for candidates for the SRB has now been published.

The call for applications is available through the press release on the EFRAG website. Candidates can only be nominated by EFRAG Member Organisations. Nominations for membership are invited by 10 February 2022.

In addition, EFRAG is looking for candidates for both the Chair and the members of its Sustainability Reporting Technical Expert Group. More information is available here.

Pre-meeting summaries for the February 2022 IFRS Interpretations Committee meeting

26 Jan 2022

The IFRS Interpretations Committee (Committee) meets on Tuesday 1 February 2022. The Committee will discuss an ongoing matter, the comment letter analysis for one tentative agenda decision and an educational paper.

Ongoing matter

IAS 37 Provisions, Contingent Liabilities and Contingent Assets—Negative low or new energy vehicle credits: In its November 2021 meeting, the Committee discussed a submission asking whether an entity with negative low emission vehicle credits has a present obligation that meets the definition of a liability in IAS 37. In the meeting, Committee members generally agreed with the staff's analysis that an entity that has generated negative credits has an obligation that meets the definition of a liability in IAS 37. Some Committee members suggested refining the words in the tentative agenda decision and some members suggested the analysis of the implications of the consensus in IFRIC 6 Liabilities arising from Participating in a Specific Market—Waste Electrical and Electronic Equipment. The staff recommend publishing the tentative agenda decision with proposed refinements to the wordings.

Comment letter analysis

IFRS 9 Financial Instruments and IAS 20 Accounting for Government Grants and Disclosure of Government Assistance—TLTRO III Transactions: In its June 2021 meeting, the Committee discussed a submission asking how banks account for the European Central Bank (ECB)’s Targeted Longer-Term Refinancing Operations (TLTRO). Specifically, the submission asked whether the TLTRO III tranches are loans at a below-market interest rate which should be accounted for as a government grant. The staff have analysed the comment letters and recommend finalising the agenda decision with minor editorial changes.

Education session

IFRS 17 Insurance Contracts—Profit recognition for annuity contracts: The Committee received a submission about determining how to recognise unearned profit as revenue based on the services an entity provides to policyholders of annuity contracts in a scenario where an entity includes unearned profit in the measurement of insurance contracts and subsequently recognises it as revenue as the entity provides services. The paper provides an overview of the applicable IFRS 17 requirements and other background related to those requirements.

Administrative matters

Work in progress: The following new matters have not yet been presented to the Committee:

  • Rent Concessions: Lessors and Lessees (IFRS 16 and IFRS 9)
  • Special Purpose Acquisition Companies (SPAC): Accounting for warrants at acquisition (IFRS 2 or IAS 32)
  • Special Purpose Acquisition Companies (SPAC): Classification of Public Shares as Liabilities or Equity (IAS 32)

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

AcSB and ASBJ hold joint meeting

26 Jan 2022

On 25 January 2022, the Canadian Accounting Standards Board (AcSB) and the Accounting Standards Board of Japan (ASBJ) held a joint meeting by video conference. The meeting was the third bilateral meeting between the two standard setters.

At the meeting, the AcSB and the ASBJ discussed specific technical topics in which both Boards have interest, including financial instruments, disclosure initiatives, and responding to changes in the market environment, including the interest of stakeholders. The two standard setters plan to continue to exchange views.

For more information about the meeting, see the press release on the ASBJ website.

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.