May

IFRS Foundation seeks Trustee applications

31 May 2022

The IFRS Foundation is seeking Trustees from Asia-Oceania, the Americas and Europe for terms beginning on 1 January 2023.

Trustees’ responsibilities include oversight of the organisation in the public interest, its strategic direction, appointments to the IASB, the ISSB, the IFRS Interpretations Committee and the IFRS Advisory Council, and ensuring the financing of the organisation and approving its budget. Trustees are expected to engage with the markets in their regional jurisdiction. Given the recent creation of the ISSB, the Trustees would particularly welcome applications from candidates with a knowledge and interest in sustainability-disclosure reporting and wider corporate reporting.

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

Updated IASB and ISSB work plan — Analysis (May 2022)

30 May 2022

Following the IASB's May 2022 meeting, we have analysed the work plan on the IFRS Foundation website to see what changes have resulted from the meeting and other developments since the work plan was last revised in April 2022. Changes are few.

Below is an analysis of all changes made to the work plan since our last analysis on 29 April 2022.

Standard-setting projects

  • Contractual cash flow characteristics of financial assets — A project newly added to the work plan; the next project milestone will be an exposure draft (no date given)
  • Dynamic risk management — This project has been moved from the research agenda to the standard-setting agenda

Maintenance projects

  • Lack of exchangeability — A decision on the project direction is now expected in July 2022 (previously Q3 2022)

Research projects

  • Extractive activities — A decision on the project direction is now expected in July 2022 (previously Q3 2022)

Other projects

  • IFRS Sustainability Disclosure Taxonomy — A project newly added to the work plan; feedback on the staff request for feedback will be discussed in H2 2022
  • Research programme — This entry provided a history of research projects; it has been removed from the work plan
  • Third agenda consultation — A feedback statement is now expected in July 2022 (previously Q3 2022)

The above is a faithful comparison of the IASB and ISSB work plan at 29 April 2022 and 30 May 2022. For access to the current work plan at any time, please click here.

IFRS Foundation Trustees seek SSAF members

30 May 2022

The IFRS Foundation is calling for applications from relevant jurisdictional and regional bodies to become members of the Sustainability Standards Advisory Forum (SSAF).

The SSAF will be established in 2022 to formalise and streamline the relationships between the IFRS Foundation and ISSB with the relevant jurisdictional and regional bodies, in order to bring important regional perspectives to the ISSB's technical work and to offer feedback on the most important issues of the day.

The SSAF is comprised of 12-16 members and a non-voting chair (being the IASB chair or vice-chair).  The 12-16 members are sourced from the following geographical regions:

  • Africa: 1 member
  • Americas (North and South): 3 members
  • Asia/Oceania: 3 members
  • Europe (including non-EU): 3 members
  • World at large*: minimum 2, up to 6 members

* subject to maintaining overall geographical balance.

Membership of the SSAF is open to all relevant jurisdictional and regional bodies with existing expertise in sustainability-related reporting relevant to the development of IFRS Sustainability Disclosure Standards that are interoperable with jurisdictional sustainability-related reporting requirements.

The closing date for applications is 11 July 2022.

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

IFRS Foundation announces new IASB Board members

26 May 2022

The Trustees of the IFRS Foundation have announced the appointment of Linda Mezon-Hutter and Robert Uhl as IASB Board members. Their appointments are for a five-year term starting in September 2022. In addition, three Board members have been reappointed for a second three-year term.

Ms Mezon-Hutter has served as a member, Vice-Chair and ultimately Chair of the Canadian Accounting Standards Board (AcSB). She has also served on the IASB’s Accounting Standards Advisory Forum. Before joining the AcSB, Mezon-Hutter served as the Chief Accountant at Royal Bank of Canada.

Mr Uhl has served as a Partner and National Director for Accounting Standards at Deloitte in the United States. He was also a member of the IFRS Interpretations Committee and the US Financial Accounting Standards Board’s (FASB) Emerging Issues Task Force. In addition, he has served as a Professional Accounting Fellow at the Office of the Chief Accountant at the US Securities and Exchange Commission.

Nick Anderson, Jianqiao Lu and Ann Tarca have been reappointed to serve a second, three-year term. Mr Anderson's and Mr Lu’s second terms start 1 September 2022, whereas Ms Tarca’s second term starts on 1 July 2022.

The press release on the IFRS Foundation's website also notes that Mary Tokar’s second term has been extended from 30 June to 31 August 2022. 

Report on the April 2022 IFRS Advisory Council meeting

26 May 2022

A summary report has been released of the meeting of the IFRS Advisory Council held in a hybrid format (virtual participation and participation at the IFRS Foundation Office in London) on 5-6 April 2022.

The participants discussed:

  • Update on Trustees' activities and IASB activities — Main discussion points were
    • the multi-location model of the ISSB,
    • the ISSB’s due process approach,
    • asserting compliance with IFRS accounting standards and IFRS sustainability-related disclosure standards,
    • engagement being undertaken with governments, regulators, and jurisdictions on the EDs, and to achieve a global baseline,
    • connectivity between the IASB and the ISSB and the potential for IASB-ISSB joint stakeholder engagement,and
    • the IASB’s future work plan, new projects to be added to the work plan, and selected projects currently on the IASB's work plan.
  • Update on the ISSB’s exposure drafts — Participants received an in-depth introduction to the two EDs and had the opportunity to ask questions.
  • Feedback from previous Advisory Council meetings — Participants were updated on how strategic advice provided by members at previous meetings has been considered and applied to the work of the IASB, the ISSB and the IFRS Foundation.
  • Introduction of the Chair of the ISSB and an update on the ISSB’s activities — Participants had the opportunity to ask questions regarding ISSB Board membership, challenges expected regarding ISSB standard-setting, ISSB standards and compliance with the SEC disclosure requirements, the culture of merged organisations, relations between standard setters, and emerging markets.
  • Organisational culture — Participants discussed:
    • Advice on bringing organisational cultures together when working in a global multilocation setting with multiple organisational consolidations occurring, and in a context of hybrid working during a continuing pandemic.
    • How can the IFRS Foundation best build on strengths in the values and cultures of the legacy organisations and achieve a unified culture?

The full meeting summary (16 pages) is available on the IFRS Foundation website.

Staff seeks feedback on future on a future IFRS sustainability disclosure taxonomy for digital reporting

25 May 2022

The staff of the International Sustainability Standards Board (ISSB) is looking for feedback that would inform the development of a taxonomy to enable digital consumption of sustainability disclosures prepared using the ISSB's IFRS Sustainability Disclosure Standards.

The IFRS Sustainability Disclosure Taxonomy would be the counterpart to the IFRS Accounting Taxonomy developed to enable digital consumption of information provided by companies applying IFRS Accounting Standards issued by the International Accounting Standards Board (IASB).

Responses to the staff request for feedback are due by 30 September 2022 and can be provided by filling in an online form or by sending a comment letter. Please click for more information on the IFRS Foundation website.

IASB and ISSB outline future plans for the use of the integrated reporting framework and the integrated thinking principles

25 May 2022

The Chairs of the International Accounting Standards Board (IASB) and the International Sustainability Standards Board (ISSB) have communicated plans for the future role, governance and development of the Value Reporting Foundation’s integrated reporting framework and integrated thinking principles as the VRF is being consolidated into the IFRS Foundation.

The statement notes that IASB and ISSB are convinced that the integrated reporting framework drives high-quality corporate reporting and connectivity between financial statements and sustainability-related financial disclosures. They therefore strongly encourage continued use of the framework and the principles underpinning it.

The joint statement explains that the framework and the principles will become part of the materials of the IFRS Foundation and the IASB and the ISSB will assume responsibility for their future use and development. The Chairs and Vice-Chair(s) of the IASB and the ISSB undertake that the boards will work together to agree on how to build on and integrate the framework into their standard-setting projects and requirements. The IASB and ISSB will utilise principles and concepts from the framework in their standard-setting work. The Chairs of the IASB and ISSB also commit to a long-term role for a corporate reporting framework, incorporating principles and concepts from the current framework. Such a framework would enable connected, holistic and cohesive corporate reporting.

Please click to access the full statement on the IFRS Foundation website.

 

Summary of the ISSB jurisdictional working group meeting

25 May 2022

In April 2022, the ISSB formed a working group comprised of several jurisdictions to enhance the compatibility between the ISSB’s exposure drafts on sustainability disclosures and jurisdictional initiatives.

The working group held its first meeting on 16 May 2022 and a public summary of the meeting is now available on the IFRS Foundation website.

During the meeting participants provided an update of the ongoing developments in their jurisdiction in relation to sustainability-related reporting, provided an update on current plans and processes to obtain feedback from stakeholders on consultations, and considered areas where further work can be undertaken to establish a global baseline for sustainability-related reporting.

We comment on four IFRS Interpretations Committee tentative agenda decisions

25 May 2022

We have published our comment letters on IFRS Interpretations Committee tentative agenda decisions related to IFRS 9/IFRS 16, IFRS 17 and IAS 32, as published in the March 2022 'IFRIC Update'.

More information about the issues is set out below:

Issue

Agenda decision supported?

More information

Lessor forgiveness of lease payments (IFRS 9 and IFRS 16)

Yes. However, we believe that further analysis may be warranted before the tentative agenda decision is finalised.

o    Deloitte comment letter

o    Committee discussion

Transfer of insurance coverage under a group of annuity contracts (IFRS 17)

Yes.

o Deloitte comment letter

o Committee discussion

Special Purpose Acquisition Companies (SPAC): Classification of public shares as financial liabilities or equity (IAS 32)

Yes. However, we suggest removing one statement that might be misread.

o Deloitte comment letter

o Committee discussion

Special Purpose Acquisition Companies (SPAC): Accounting for warrants at acquisition

Yes. However, we believe that some aspects of the analysis may require further consideration before the agenda decision is finalised.

o Deloitte comment letter

o Committee discussion

Click to access all our comment letters to the IASB, IFRS Foundation, and IFRS Interpretations Committee.

Pre-meeting summaries for the May 2022 IASB meeting

20 May 2022

The IASB meets in London over five days, from Monday 23 to Friday 27 May 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:

IASB Work Plan

Since January the IASB has removed from its work plan Availability of a Refund (amendments to IFRIC 14), Post-implementation Review (PIR) of IFRS 10, IFRS 11 and IFRS 12 and Pension Benefits that Depend on Asset Returns. New projects the IASB will consider are a high priority project to assess a financial asset’s contractual cash flow characteristics, a narrow-scope project on the interaction of IFRS 10 and IFRS 16 related to the sale of a subsidiary with a leaseback, a project to revise the Due Process Handbook’s objectives for PIR’s and research projects on intangible assets and the statement of cash flows and related matters. The IASB expects to finalise in 2022 amendments related to Lease Liability in a Sale and Leaseback and Non-current Liabilities with Covenants. The next consultation document will be an ED from the comprehensive review of the IFRS for SMEs Accounting Standard.

Primary Financial Statements

The staff recommend the IASB confirm the proposed requirements to disclose the income tax effect and the effect on NCI for each item disclosed in the reconciliation between an MPM and the most directly comparable subtotal or total specified by IFRS Accounting Standards, but remove the proposed requirement to disclose how the entity determined the income tax required by the ED. The staff recommend that the IASB develop an approach of establishing a broad definition for income and expenses to be included in a single note about limited recurrence and requiring the note that provides information about income and expenses that meet the definition to be divided, so income and expenses with different recurrence characteristics can be identified easily. They also recommend that the IASB continue to include in the definition income and expenses that are dissimilar to those expected to arise in the future because they are lower in amount and for such items of income and expenses, reconfirm the proposal to require disclosure of the amount recognised in the period and an explanation of why that amount has limited recurrence.

Dynamic Risk Management

In February the IASB discussed an approach in which the designated derivatives would continue to be recognised at fair value in the statement of financial position with the DRM adjustment recognised in the statement of financial position, as the lower of (in absolute amounts): (i) the cumulative gain or loss on the designated derivatives from the inception of the DRM model and (ii) the cumulative change in the fair value of the risk mitigation intention attributable to repricing also risk from inception of the DRM model. This would be calculated using the benchmark derivatives as a proxy. The difference between the changes in fair value of designated derivatives and DRM adjustment will be recognised in in the statement of profit or loss. The staff recommend changing the mechanics of the DRM model to this approach and moving this project to the standard-setting programme.

Maintenance and Consistent Application

At its April 2022 meeting, the IFRS Interpretations Committee decided to finalise an agenda decision in response to a submission about whether, in applying IFRS 15, a reseller of software licences is a principal or agent. IASB members will be asked whether they object to the finalisation of the agenda decision.

Post Implementation review of IFRS 9

Most respondents to the PIR Request for Information (RFI) agreed that generally these IFRS 9 requirements work as intended, indicating that there is not a need for fundamental changes to the requirements. However, feedback indicated that the IASB could help entities with consistent application by clarifying particular aspects of the SPPI requirements. This was indicated in particular by the many questions raised by respondents about how to apply the SPPI requirements to financial assets with ESG-linked features, and about the scope of the requirements for contractually-linked instruments (CLIs). The staff recommend the IASB starts a standard-setting project to clarify particular aspects of the requirements for assessing a financial asset’s contractual cash flow characteristics (paragraphs B4.1.7−B4.1.26 of IFRS 9).

Second Comprehensive Review of the IFRS for SMEs Standard

At its May 2021 meeting, the IASB started deliberating specific sections of the IFRS for SMEs Standard that could be aligned with new requirements in IFRS Accounting Standards in the scope of the review. At this meeting, the IASB will deliberate: feedback on the scope (including the definition of public accountability) and name of the IFRS for SMEs Accounting Standard; topics identified when developing the ED after considering the tentative decisions made by the IASB in deliberating this comprehensive review that are either potential inconsistencies or sweep issues; transition requirements for an entity applying the amendments to the IFRS for SMEs Accounting Standard for the first time; and the effective date of the amendments to be proposed. The staff make an extensive set of recommendations, which are set out in the more detailed summaries.

Goodwill and Impairment

As part of the IASB’s work, the staff have performed further analysis on specific aspects of respondents feedback on the subsequent accounting for goodwill. The purpose of this meeting is to provide the IASB with a summary of the staff research. The agenda paper also provides information about the project plan and how this research is relevant to that plan. The IASB will not be asked to make any decisions during this session. The IASB will discuss the feasibility of estimating the useful life of goodwill and the pattern in which it diminishes; the auditability of the useful life of goodwill; the usefulness of information associated with managements’ estimates of the useful life of goodwill and potential consequences of transitioning to an amortisation-based model (Agenda Paper 18B)

Rate-regulated Activities

The IASB will continue redeliberating the proposals in Exposure Draft ED/2021/1 Regulatory Assets and Regulatory Liabilities. The staff recommend that the final Standard clarifies that for a regulatory asset or a regulatory liability to arise, it is necessary that differences in timing originate from, and reverse through, amounts included in the regulated rates that an entity accounts for as revenue applying IFRS 15. The also staff recommend that the final Standard not exclude from its scope regulatory assets or regulatory liabilities related to financial instruments within the scope of IFRS 9.

Disclosure Initiative — Targeted Standards-level Review of Disclosures

The purpose of this meeting is for the IASB to discuss the feedback from comment letters on Exposure Draft ED/2021/3 Disclosure Requirements in IFRS Standards—A Pilot Approach. The cover paper includes the background to the project as well as the following summary of the key messages in the comment letters. Almost all respondents agreed that the IASB should engage early with users of financial statements and other stakeholders when developing disclosure requirements in IFRS Accounting Standards, integrate development of disclosure requirements with the rest of the accounting model and consider implications for digital reporting. The IASB will not be asked to make any decisions in this session.

Disclosure Initiative — Subsidiaries without Public Accountability: Disclosures

The staff recommend that, if the IASB decides to proceed to finalise the draft Standard, it should finalise the draft Standard with the scope as proposed in the ED but commit to review the scope of the draft Standard as part of the post-implementation review of the standard. They recommend clarifying the proposals to assist in understanding the definition of public accountability and that an intermediate parent assesses its eligibility to use the draft standard in its separate financial statements on the basis of its own status without considering whether other group entities have, or the group as a whole has, public accountability.

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

Correction list for hyphenation

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