January

IPSASB issues non-substantive changes to its standards

25 Jan 2022

The International Public Sector Accounting Standards Board (IPSASB) has issued 'Improvements to IPSAS, 2021'.

The pronouncement includes minor improvements to IPSAS to address issues raised by stakeholders and minor amendments sourced from recent IFRS improvements and narrow scope projects.

Please click for more information and access to the pronouncement on the IPSASB website.

Summary of the November 2021 CMAC meeting

24 Jan 2022

Representatives from the International Accounting Standards Board (IASB) met with the Capital Markets Advisory Council (CMAC) by video conference on 11 November 2021. Notes and recording from the meeting have now been released.

The topics discussed at the meeting included:

  • IASB update
  • Goodwill and impairment
  • Forthcoming Exposure Draft: Supplier Finance Arrangements — Proposed amendments to IAS 7 and IFRS 7.

The meeting summary is available on the IASB website. In addition, the meeting page offers record­ing of meeting.

The next CMAC meeting will be held on 17 March 2022.

February 2022 IFRS Interpretations Committee meeting agenda posted

21 Jan 2022

The IFRS Interpretations Committee has posted the agenda for its next meeting, which will be held by video conference on 1 February 2022.

The Committee will discuss the following:

  • IAS 37 — Negative low emission vehicle credits
  • IFRS 9 and IAS 20 — TLTRO III Transactions
  • IFRS 17 — Profit recognition for annuity contracts
  • 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.

EFRAG publishes working papers on sustainability reporting standards

21 Jan 2022

The Project Task Force on European Sustainability Reporting Standards (PTF-ESRS) of the European Financial Reporting Advisory Group (EFRAG) has released working papers on the first draft standards on sustainability reporting.

The papers reflect the current state of the standard-setting work carried out by the Task Force following the due process the PTF-ESRS has defined for itself.

The cover note that accompanies the set of working papers sets out the intended architecture and structure of the standards, offers a draft index for the European Sustainability Reporting Standards as appendix 1 and access to the individual working papers as appendix 2. The drafts in the working papers published today cover four cross-cutting standards (of a total of five), two conceptual guidelines (of a total of six) and the ESRS E1 Climate change. The cover note highlights that the other working papers will be published in two further batches within the next weeks.

EFRAG emphasises that the publication of the working papers is to ensure a transparent process, it is not a public consultation. A future consultation is mentioned in the cover note, however, not date is given.

Please click to access the cover note linking to the working papers on the EFRAG website.

EFRAG draft comment letter on the classification of debt with covenants

21 Jan 2022

The European Financial Reporting Advisory Group (EFRAG) has issued a draft comment letter on the exposure draft 'Non-current Liabilities with Covenants (Proposed amendments to IAS 1)' the IASB published to clarify how conditions with which an entity must comply within twelve months after the reporting period affect the classification of a liability.

In the draft comment letter, EFRAG supports the IASB’s efforts to address the concerns of constituents that have emerged in the context of the IFRS Interpretations Committee’s agenda decision of December 2020 and accepts that liabilities should be classified as current or non-current based on the situation as at the end of the reporting period.

However, EFRAG raises the following points:

  • EFRAG disagrees with the separate presentation of liabilities classified as non-current for which the entity’s right to defer settlement for at least twelve months after the reporting period is subject to conditions during that time.
  • EFRAG suggests changes to the wording for differentiation between covenants that do not affect the classification at balance sheet date and covenants that affect the classification.
  • EFRAG expresses concerns that the targeted scope of the disclosure requirements may be too broad in practice.

Comments on EFRAG's draft comment letter are requested by 9 March 2022. For more information, see the press release and the draft comment letter on the EFRAG website.

Pre-meeting summaries for the January 2022 IASB meeting

20 Jan 2022

The IASB will meet in its offices in London on 25 January 2022. We have posted our pre-meeting summaries for the meeting that allow you to follow the IASB’s decision making more closely. We summarised the agenda papers made available by the IASB staff and point out the main issues to be discussed by the IASB and the staff recommendations.

The following topics are on the agenda:

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 is to provide the IASB with a summary of feedback on the ED. There was general support for the proposals, with some suggestions. The IASB is not being asked to make any decisions at this meeting.

The staff will update the IASB on 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 will present 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 IASB will also discuss the plan for deliberating the preliminary views in the DP. The IASB will be asked whether it agrees with the staffs proposed plan for deliberations but will not be asked to make any further decisions at this meeting.

Board work plan update

The staff will give 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 sets out projects completed since the last update, lists the projects out for consultation and notes 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 during the next six months).

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 recommendations 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 will give an oral update.

Primary Financial Statements

The staff recommend the IASB 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; and specify that one way to meet this requirement is to use a side-by-side columnar format for the reconciliation.

The staff recommend 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.

Our pre-meet­ing summaries is available on our January meeting notes page and will be sup­ple­mented with our popular meeting notes after the meeting.

Summary of the December 2021 ASAF meeting now available

19 Jan 2022

The IASB staff have published a summary of the Accounting Standards Advisory Forum (ASAF) meeting held via remote participation on 9-10 December 2021.

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

  • Intangibles (1–8): The ASAF members generally agreed that the issues discussed in the EFRAG’s discussion paper Better Information on Intangibles are relevant and valid and said the IASB should undertake a comprehensive review of IAS 38 Intangible Assets, working with the ISSB to consider any relationship between intangibles and any future sustainability-related disclosure standards.
  • Strategic / agenda consultations (9–42): The AcSB, EFRAG, FASB and AASB are currently seeking feedback from stakeholders on their future agendas. The ASAF shared feedback and questions and discussed how it compares to the feedback on the IASB’s agenda consultation.
  • Agenda planning and feedback from the previous ASAF meeting (43–44): The ASAF members agreed with the proposed topics for the next ASAF meeting and also suggested discussing the projects on primary financial statements and dynamic risk management.
  • Goodwill and impairment (45–66): The ASAF members received an update on the IASB’s recent discussions and provided feedback on the staff examples illustrating the information the staff expects an entity to disclose when applying the IASB’s preliminary views about adding disclosure requirements to IFRS 3 Business Combinations.
  • Disclosure initiative — Subsidiaries without public accountability: Disclosures (67–81): The ASAF members shared their preliminary views on the scope of the IASB’s exposure draft Subsidiaries without Public Accountability: Disclosures published in July 2021.
  • Disclosure Initiative — Targeted Standards-level review of disclosures (81–92): The ASAF members were updated on initial feedback from the IASB’s outreach on the exposure draft Disclosure Requirements in IFRS Standards — A Pilot Approach and shared feedback from their jurisdictions on the IASB’s proposals, including on the guidance for the Board, new disclosure requirements for IFRS 13, and new disclosure requirements for IAS 19.

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

IASB member provides update on extractive activities project

18 Jan 2022

IASB member Tadeu Cendon has issued an article which provides an update on the IASB’s extractive activities project. The article explains reasoning behind certain IASB’s decisions related to the scope and objectives of the project.

Specifically, the article discusses:

  • Feedback received from stakeholders on why the Board was looking at extractive activities.
  • Tentative board decisions reached on the scope and objective.
  • Diversity in accounting policy.
  • Challenges in applying certain accounting standards to extractive activities outside the scope of IFRS 6.
  • Reserve and resource information.
  • Upcoming research.

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

EFRAG draft comment letter on supplier finance arrangements

18 Jan 2022

The European Financial Reporting Advisory Group (EFRAG) has issued a draft comment letter on the IASB's Exposure Draft ED/2021/10 ‘Supplier Finance Arrangements’.

The exposure draft adds disclosure requirements, and ‘signposts’ within existing disclosure requirements, that would ask entities to provide qualitative and quantitative information about supplier finance arrangements.

In its draft comment letter, EFRAG supports ‘the project which increases conformity with existing disclosure requirements in IFRS Standards. However, EFRAG considers that the IASB's proposals do not completely address the wider issue of presentation and classification of such arrangements in the primary financial statements, the necessary transparency on liquidity risk and working capital leverage’.

Comments on EFRAG's draft comment letter are requested by 9 March 2022. For more in­for­ma­tion, see the press release and the draft comment letter on the EFRAG’s website.

EFRAG TEG appointments and reappointments

17 Jan 2022

The Board of the European Financial Reporting Advisory Group (EFRAG) has announced the appointment of two new members of — and five reappointments to — its Technical Experts Group (TEG) as well as the appointment of a new TEG Vice Chair.

The new EFRAG TEG members are Carmen Barrasa (accountancy profession, Spain) and Aranzazu Leo Abad (preparer, banking and financial instruments specialist, Spain). Chiara Del Prete, EFRAG TEG Chairwoman, has been reappointed for a second three-year term. In addition, EFRAG TEG members Emmanuelle Guyomard, Erlend Kvaal, David Procházka, and Christoph Schauerte have been reappointed. Jens Berger (Leader of Deloitte Germany's IFRS and Corporate Reporting Centre of Excellence) has been appointed new EFRAG TEG Vice Chair.

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

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