Year in review — 2022

31 Dec 2022

2022 was another successful year for the IAS Plus family. We've devoted significant resources to bring you comprehensive coverage of all things IFRS (now also including coverage of all developments around the ISSB) and broader financial reporting and other relevant topics and are pleased that our readers appreciate our efforts.

Overall, our most popular pages remain our accounting standards summaries, and we continued to witness strong demand for our news, publications, resource pages, and project summaries. Our reporting around the International Sustainability Standards Board (ISSB) witnessed of course great demand this year. Hyperinflation also seemed to be a topic very much on peoples' mind.

Our 10 most popular stories of 2022
    1. IASB issues amendments to IFRS 16 (September)
    2. Hyperinflationary economies - updated IPTF watch list available (January)
    3. ISSB exposure draft of general requirements of sustainability reporting (March)
    4. ISSB exposure draft of climate-related disclosures (March)
    5. Hyperinflationary economies - updated information on Turkey (April)
    6. IASB finalises amendments to IAS 1 regarding the classification of debt with covenants (October)
    7. EFRAG publishes working papers on sustainability reporting standards (January)
    8. Financial reporting considerations related to the Russia-Ukraine War (March)
    9. Hyperinflationary economies - updated IPTF watch list available (June)
    10. EFRAG launches consultation on draft sustainability standards (April)

We wish you a happy, safe and healthy New Year. We look forward to bringing you the latest financial reporting news in 2023.

Memorandum of understanding signed to establish ISSB presence in Beijing

29 Dec 2022

The Trustees of the IFRS Foundation have signed a Memorandum of Understanding with the Ministry of Finance of China to establish an International Sustainability Standards Board (ISSB) office of the IFRS Foundation in Beijing.

The Beijing office is expected to open in mid-2023. Staff of the office will focus on leading and executing the ISSB’s strategy for emerging and developing economies and act as a hub for stakeholder engagement in Asia.

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

Season's greetings

24 Dec 2022

We wish all our readers a healthy and happy festive season and all the best for the New Year!

We look forward to seeing you again after the holidays and to continue to be your preferred accounting website in 2023.

IFRS Foundation Trustees hold discussion on sustainability standards

22 Dec 2022

The IFRS Foundation Trustees have issued insights from a panel discussion held during its quarterly meeting in Seoul, South Korea. The discussion focused on IFRS Sustainability Disclosure Standards and why they are needed.

The panelists were posed two questions: (1) “how each panelist’s jurisdiction reacted to the establishment of the ISSB and the adoption of the Standards” and (2) “most significant challenges in adopting the Standards in their respective jurisdictions and suggestions on how to overcome these challenges.” Overall, the panelists welcomed the ISSB; however, there were some who were concerned with adoption of the ISSB Standards in developing and emerging countries. The panelists came to an agreement that a way to address the concern is to provide sufficient transition arrangements for implementing the Standards.

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

EU Directive on minimum taxation published in the Official Journal

22 Dec 2022

The EU Directive to ensure a global minimum rate of taxation for multinational groups and large domestic groups in the Union has been published in the Official Journal of the European Union.

The Directive aims to ensure that large groups operating in the EU are taxed at a minimum global effective tax rate of 15%. The rules apply to all large groups (whether they operate on a purely domestic or international basis) whose annual turnover exceeds €750 million and which have either a parent company or a subsidiary in an EU Member State.

The Directive fulfils the EU's commitment to implement the agreement on global tax reform reached by the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) to combat profit shifting and base erosion (the so-called OECD Pillar Two Model Rules on minimum taxation).

The IASB is working towards mitigating possible adverse effects of the global adoption of these rules at great speed. While the OECD released the rules in December 2021, the IASB had little alternative to monitoring developments until jurisdictions began implementing them. The developments suddenly picked up speed and the IASB reacted by, in one meeting only, discussing the required amendments holistically and developing proposals that would introduce a temporary exception from accounting for deferred taxes arising from the implementation of the OECD Pillar Two rules and targeted disclosures requirements for affected companies. An exposure draft is expected in January 2023 and the DPOC has agreed to a shortened comment period of 60 days.

Please click to access the EU Directive legally anchoring the OECD Pillar Two rules in the European Union.

IASB issues podcast on latest Board developments (December 2022)

21 Dec 2022

The IASB has released a podcast featuring IASB Chair Andreas Barckow and Executive Technical Director Nili Shah discussing deliberations at the December 2022 IASB meeting.

High­lights of the podcast include dis­cus­sions on:

  • Dis­clo­sures on the strategic framework for digital financial reporting and activities.
  • Renaming of the Business Combinations — Disclosures, Goodwill and Impairment project.
  • Reversal in the Equity Method project.
  • Progress in the Lack of Exchangeability project.
  • Proposals in the Rate-regulated and Subsidiaries without Public Accountability: Disclosures projects.
  • Tentative decisions related to the Financial Instruments with Characteristics of Equity project.
  • Update on the Management Commentary project.
  • Report on the feedback statement on the Post-implementation Review of IFRS 9 — Classification and Meaurement.

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.

IASB issues report concluding the post-implementation review of classification and measurement requirements relating to financial instruments

21 Dec 2022

The IASB has issued its project report and feedback statement on the Post-implementation Review (PIR) of IFRS 9 ‘Financial Instruments — Classification and Measurement’.

The project report and feedback statement provides the IASB’s conclusions on the PIR which included the following:

  • “stakeholders have no fundamental questions about the clarity or suitability of the objectives or principles in the new requirements.
  • “in general, the requirements can be applied consistently and provide useful information to the users of financial statements. However, clarification is needed in some areas to improve the understandability of the requirements.”
  • “stakeholders encounter no unexpected costs when applying or enforcing the classification and measurement requirements of IFRS 9, nor when using or auditing information the Accounting Standard requires a company to provide.”

In addition, the IASB has identified two issues that will need further research. These issues are:

  • “the assessment of the contractual cash flow characteristics of financial assets with ESG-linked features.”
  • “electronic cash transfers as settlement of a financial asset or liability.”

For more information, see the press release and report on the IFRS Foundation website.

Sustainability Standards Advisory Forum membership announced

21 Dec 2022

The Sustainability Standards Advisory Forum (SSAF) composition has been announced and will include representatives from thirteen jurisdictions and regions. The SSAF goal is to provide the ISSB with technical advice in the development of ISSB’s standard-setting.

Members include:

  • Africa:
    • Pan African Federation of Accountants (PAFA)
  • Americas:
    • Brazilian Committee of Sustainability Pronouncements (CBPS)
    • CPA Canada (as interim prior to the establishment of the Canadian Sustainability Standards Board (CSSB))
    • Group of Latin American Accounting Standard Setters (GLASS)
    • Mexican Financial Reporting Standards Board (CINIF)
  • Asia-Oceania:
    • Accounting Regulatory Department, Ministry of Finance of People's Republic of China (ARD)
    • Institute of Chartered Accountants India (ICAI)
    • Korea Accounting Institute (KAI) and the Financial Services Commission (FSC)
    • Saudi Organization for Chartered and Professional Accountants (SOCPA)
    • Sustainability Standards Board of Japan (SSBJ)
  • Europe:
    • European Financial Reporting Advisory Group (EFRAG)
    • Swiss State Secretariat for International Finance (SIF)
    • UK Financial Reporting Council

In addition, the SSAF will have three observers from European Commission, IOSCO and the United States Securities and Exchange Commission and selected meetings with the Global Reporting Initiative (GRI).

For more information, see the press release on the IFRS Foundation website.

December 2022 ISSB meeting notes posted

21 Dec 2022

The ISSB met in Montreal on Tuesday 13, Wednesday 14 and Thursday 15 December 2022. We have posted our comprehensive Deloitte observer notes for all projects discussed during the meeting.

The following topics were discussed:

ISSB Consultation on Agenda Priorities

The ISSB has begun work on a Request for Information (RFI) as part of its consultation for developing its work plan. The RFI will include two main components: foundational work and potential projects. ISSB staff have conducted outreach and research activities to put together a short-list of potential projects to be considered for inclusion within the RFI. The four potential projects identified are biodiversity, including ecosystems, ecosystem services and other nature-related issues; human capital, with a focus on diversity, equity and inclusion (DEI); human rights, particularly in the context of the value chain, with a focus on worker, labour and community rights; and connectivity in reporting, management commentary and integrated reporting. The ISSB voted in favour of including these four projects, with the caveat that they are further built out to include an expanded description as well as explicit examples of subtopics within each potential project.

General Sustainability-related Disclosures

The ISSB decided to provide some clarifications to the proposals: the framing and objective of [draft] S1 in with respect to the relationship between value and sustainability; and identifying sustainability-related risks and opportunities and assessment of material information.

Climate-related Disclosures

The ISSB decided to address specific feedback received during the comment period in relation to the disclosure requirements for Scope 1 and 2 GHG Emissions. For Scope 3 GHG emissions the ISSB decided to provide some disclosure relief, introduce a framework for measuring Scope 3 GHG emissions, provide relief related to an entity’s value chain, require an entity to reassess the ‘scope’ of its sustainability-related risks and opportunities in its value chain only upon the occurrence of either a significant event or a significant change in circumstances, and confirm that no additional relief will be provided regarding the proposal that an entity is required to include information about which of the 15 Scope 3 GHG emissions categories described in the GHG Protocol Value Chain Standard are included within the entity’s measure of Scope 3 GHG emissions. In relation to financed emissions, the ISSB decided to confirm the proposed disclosure requirements for financed emissions for three industries—Asset Management & Custody Activities, Commercial Banks and Insurance but not for the Investment Banking & Brokerage industry. The ISSB decided to make other more detailed changes recommended by the staff.

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

IFRS Foundation appoints five new Trustees

21 Dec 2022

The IFRS Foundation has announced the appointment of Koushik Chatterjee, Sukjoon Lee, Steven Maijoor, Isabel Saint Malo, and Wencai Zhang as Trustees of the IFRS Foundation. Their appointments will begin on 1 January 2023 and will expire on 31 December 2025.

In addition, the current IFRS Foun­da­tion Trustee member Maria Theofilaktidis has been reap­pointed to serve a second three-year term.

For more in­for­ma­tion, see the press release on the IFRS Foundation website.

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