The following topic was discussed:

International Tax Reform—Pillar Two Model Rules—Amendments to the IFRS for SMEs Standard: The IASB discussed the feedback received in response to Exposure Draft International Tax Reform—Pillar Two Model Rules—Proposed Amendments to the IFRS for SMEs Standard. The IASB agreed to finalise the proposals in the ED with minor revisions.

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

A summary of the five key takeaways from the conference has now been published. They are:

• Integrated thinking and reporting improve engagement and discourse between investors and investees.
• Integrated thinking and reporting are integral to the IFRS Foundation’s development of a comprehensive global corporate reporting system.
• Integrated thinking and reporting improve performance.
• Integrated thinking and reporting can be a natural link between investor- and impact-focused sustainability reporting.
• Integrated thinking and reporting are complementary to the ISSB Standards.

Please click to access the summary on the integrated reporting website.

Please click to access the updated alignment dashboard prepared for the September 2023 IPSASB meeting on the IPSASB website.

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

• Agenda planning and feedback from previous ASAF meeting (1–2): The ASAF members discussed topics for its next meeting to be held on 28 September 2023 and will include a dis­cus­sions on the rate-regulated activities, the application of the ‘own use’ exception to some power purchase agreements, and Pillar Two model rules.
• Intangible assets (3–4): The ASAF members were presented with results of feedback by EFRAG and UKEB related to the EFRAG’s discussion paper Better Information on Intangibles — Which is the best way to go? and an overview of the UKEB’s report Accounting for Intangibles: UK Stakeholders’ Views.
• Business combinations — Disclosures, goodwill and impairment (5–6): The ASAF members were updated on the IASB’s proposals to require an entity to disclose better information about business combinations.
• Primary financial statements (7–29): The ASAF members were updated and provided feedback to illustrative examples related to the primary financial statements project.
• Business combinations under common control (30–43): The ASAF members were updated on the project and provided views on the project direction.
• Provisions — Targeted improvements(44–58): The ASAF members provided views on possible amendments to the requirements and illustrative examples supporting the ‘present obligation’ recognition criterion in IAS 37 and whether to add to IAS 37 application requirements specifying when an entity would recognize a provision for costs payable if a measure of its activity were to exceed a threshold.
• Climate-related risks in the financial statements(59–71): The ASAF members were provided with an overview of the project and provided feedback on stakeholder concerns about reporting climate-relate risks in financial statements and the scope of the project
• Equity method (72–75): The ASAF provided its views on whether the IASB should publish an exposure draft of amendments to IAS 28 or IAS 28 revised.

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

The roadmap, which has been released after consultation with Taiwan's listed entities, sets out the following key points:

1. Alignment approach: The FSC will adopt ISSB standards applying an endorsement approach. In 2026, the FSC will endorse IFRS S1 and IFRS S2. From 2027 onwards, the FSC will assess and, if appropriate, endorse future standards issued by the ISSB.
2. Entities in scope and timeline: The FSC will apply a staggered approach as to which entities will have to apply ISSB standards. Firstly, the largest listed entities (capital over NT$ 10bn) will be required to report sustainability information applying IFRS S1 and IFRS S2 for FY 2026. As a second step, all large listed entities (capital over NT$ 5bn) will be required to report sustainability information applying ISSB standards for FY 2027. Thirdly, all listed entities will be required to report sustainability information in accordance with ISSB standards for FY 2028.
3. Location and timing of disclosures: The FSC will require entities to disclose sustainability information in accordance with ISSB standards in their annual reports, and to publish the sustainability information at the same time as the financial statements.
4. Disclosure content: The FSC decided to provide the same transition reliefs as the ISSB. In addition, qualitative information can be disclosed for matters involving a high degree of uncertainty and quantification difficulty. For disclosures using estimation, entities can use the data and inputs based on reasonable and supportable information that is available at the reporting date without undue costs.

Please click to access the following on the FSC website:

• Press release
• Roadmap for Taiwan listed companies to align with IFRS Sustainability Disclosure Standards
• Presentation summarising the contents of the roadmap

The following topic is on the agenda:

International Tax Reform—Pillar Two Model Rules—Amendments to the IFRS for SMEs Standard: The IASB will discuss the feedback received in response to Exposure Draft International Tax Reform—Pillar Two Model Rules—Proposed Amendments to the IFRS for SMEs Standard. The staff recommends finalising the proposals in the ED with minor revisions.

Our pre-meet­ing summary is available on the August sup­ple­men­tary meeting notes page and will be sup­ple­mented with our popular meeting notes after the meeting.

Some of the trans­la­tions are only available through the IFRS Foun­da­tion shop, however, most of the content is available free of charge.

Trans­lated content available through the IFRS Accounting Standards Navigator requires reg­is­tra­tion, but is otherwise free of charge. It provides access to the current year's con­sol­i­dated IFRS Accounting Standards and IFRIC In­ter­pre­ta­tions (Part A of the Issued Standards — the Red Book), the Conceptual Framework for Financial Reporting and IFRS Practice State­ments, and available trans­la­tions of Standards.

Trans­la­tions of exposure drafts are available on the cor­re­spond­ing open to comment page.

Please click for an overview of the new trans­la­tions of the IFRS Foun­da­tion website.

Background

The IFRS Interpretations Committee received a submission about the determination of the exchange rate when there is a long-term lack of exchangeability as IAS 21 The Effects of Changes in Foreign Exchange Rates does not include explicit requirements on the exchange rate an entity uses when the spot exchange rate is not observable. The Committee researched possible narrow-scope standard-setting and concluded that the best way forward was to recommend that the IASB develop narrow-scope amendments to IAS 21 to address the matter.

In November 2019, the IASB took the matter over and during its subsequent meetings discussed how to assess whether a currency is exchangeable and which exchange rate to use when it is not. The Board decided to propose to add requirements to IAS 21 that will help an entity determine whether a currency is exchangeable into another currency and requirements the entity would apply when it is not. A corresponding exposure draft was published in April 2021.

Changes

The amendments in Lack of Exchangeability (Amendments to IAS 21) amend IAS 21 to:

• Specify when a currency is exchangeable into another currency and when it is not — a currency is exchangeable when an entity is able to exchange that currency for the other currency through markets or exchange mechanisms that create enforceable rights and obligations without undue delay at the measurement date and for a specified purpose; a currency is not exchangeable into the other currency if an entity can only obtain an insignificant amount of the other currency.
• Specify how an entity determines the exchange rate to apply when a currency is not exchangeable — when a currency is not exchangeable at the measurement date, an entity estimates the spot exchange rate as the rate that would have applied to an orderly transaction between market participants at the measurement date and that would faithfully reflect the economic conditions prevailing.
• Require the disclosure of additional information when a currency is not exchangeable — when a currency is not exchangeable an entity discloses information that would enable users of its financial statements to evaluate how a currency’s lack of exchangeability affects, or is expected to affect, its financial performance, financial position and cash flows.

The pronouncement also includes a new appendix with application guidance on exchangeability and a new illustrative example.

The amendments also extend to conforming amendments to IFRS 1 which previously referred to, but did not define, exchangeability.

Effective date and transition

An entity applies the amendments for annual reporting periods beginning on or after 1 January 2025. Earlier application is permitted.

An entity does not apply the amendments retrospectively. Instead, an entity recognises any effect of initially applying the amendments as an adjustment to the opening balance of retained earnings when the entity reports foreign currency transactions. When an entity uses a presentation currency other than its functional currency, it recognises the cumulative amount of translation differences in equity.

Additional information

Please click for:

• IASB press release (link to IFRS Foundation website)
• Webcast explaining the amendments (link to IFRS Foundation website)
• iGAAP in Focus explaining the amendments
• Our IAS Plus project page on IAS 21 — Lack of exchangeability

Keynote speakers, including IASB Chair Andreas Barckow and ISSB Chair Emmanuel Faber, shared their insights. Chair Barckow emphasised the role of the IFRS Foundation in fostering investor confidence through clear communication, particularly during uncertain economic times. Chair Faber stressed the need for a unified language that integrates sustainability into economic frameworks. In addition, the CEO of the London Stock Exchange, Julia Hoggett, underlined the critical role of reporting standards in upholding capital market integrity and advocated for sector-specific and proportionate reporting to ensure optimal allocation of resources.

The conference explored the interplay between the IASB and ISSB through sessions led by Linda Mezon-Hutter and Sue Lloyd, Vice-Chairs of the respective boards. Breakout sessions offered deep insights into key IASB projects and the IFRS Sustainability Disclosure Standards.

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

The full agenda for the meeting can be found here. We will post any updates to the agenda, our com­pre­hen­sive pre-meet­ing summary, as well as observer notes from the meeting on this page as they become available.