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News

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Alliance for Corporate Transparency launches research report on sustainability reporting

18 Feb 2020

At a launch event on 17 February 2020 in Brussels, the Alliance for Corporate Transparency presented a report that analysed the information that companies disclosed on their environmental and societal risks and impacts following the requirements introduced by the EU Non-Financial Reporting Directive. The launch embedded the research into discussions around 'The State of Corporate Sustainability Reporting in the EU'.

The study assessed how 1000 European companies disclose sustainability and other non-financial information. Key findings of the study were:

  1. Less than 22% of the companies surveyed report climate-related key performance indicators in summarised statements, the rest of them publish them scattered around in different locations or not at all;
  2. only 20%-25% of companies describe risks specifically even though identifying them as relevant to the company in the first place;
  3. the TCFD criteria are not applied;
  4. outcomes are only reported in 4% of cases despite that fact that risks are identified and in some cases activities described;
  5. supply chain transparency is low with supply chain transparency in the apparel sector being the highest but still not exceeding 14%;
  6. only 6% of companies provide economic figures on sustainability activities;
  7. disclosures are immaterial.

There is not a major difference between different European regions, with the exception that companies from former Eastern Europe lag behind.

Generally, disclosures are not specific enough to enable understanding of a company’s position and future developments. Reports focus on presenting general policies and commitments, but not concrete targets, outcomes of policies with respect to these targets, and specific information on risks and impacts.

The following additional information is available on the Alliance for Corporate Transparency website:

The embedding launch event offered two opening speeches by MEPs, a panel discussion and two fire-side chat sessions on the direction for the reform of the Non-Financial Reporting Directive and an explanation of the plans of the European Commission regarding the Non-Financial Reporting Directive. Panel members included representatives from WWF, the analysts side, the industry, GRI, CDP, and CDSB. The European Commission was represented by Alain Deckers, Head of the Unit on corporate reporting, audit and credit rating agencies. All parts of the launch event offered the audience opportunities to raise questions or comments. The main messages that emerged from the panels and the audience were:

  • While quite a lot of companies provide information, very few provide useful information.
  • Analysts don't want more information, they want relevant information.
  • Materiality is of essence.
  • There is a great tendency towards boiler plate information.
  • The lack of useful information is not only due to a lack of clearness in the reporting requirements, but also due to how these are applied, how the reports are drawn up, and how much demand/pressure there is from the user side.
  • Reporting on individual matters very often improves, once "something has happened".
  • Information lacks connectivity.
  • Information needs to be comparable, yet companies must be allowed to report on what is relevant for them.
  • Information should be forward looking and identify not only risks but opportunities.
  • Sustainability reporting can learn from financial reporting, where there already are a well-established architecture, an international standard-setter, and international standards.
  • There should be more connection between financial information and non-financial information.
  • Disclosure alone, even if mandatory, does not suffice to achieve a change in company behaviour.
  • It is a mistake to try to use reporting legislation to manage a moral obligation.

In his concluding remarks, Mr Deckers noted that the results presented in the research form a great evidence base for the upcoming review of the EU Non-Financial Reporting Directive. He clearly distinguished between "review" and "revision", although he noted that politics and markets have moved on since the Directive was first released. Mr Deckers stated that sustainability must be "at the heart of" company reporting, but he also conceded that it is only part of the picture and cannot solve all the problems. He also pointed at the tension between principles-based and rule-based requirements that is well known from financial reporting and that would form part of the debate on sustainability reporting. As regards the way forward, Mr Deckers pointed at the recently launched initiative to review the Non-Financial Reporting Directive, the three-month corresponding consultation that would open very soon ("later this week"), and an expected proposal for legislation at the end of 2020. He also mentioned that preparatory work for standard-setting would begin in parallel, in order to be able to move quickly.

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February 2020 IASB meeting agenda updated

17 Feb 2020

The IASB has updated the agenda for its next meeting, which will now be held at its offices in London on 25–27 February 2020.

The main change is that Amendments to IFRS 17 Insurance Contracts will now be discussed on Tuesday 25 February (pulled forward from 26 February).

The full agenda for the meeting can be found here.

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We comment on two IFRS Interpretations Committee tentative agenda decisions

14 Feb 2020

We have published our comment letters on IFRS Interpretations Committee tentative agenda decisions related to IAS 12 and IAS 38, as published in the November 2019 IFRIC Update.

More in­for­ma­tion about the issues is set out below:

Issue

Agenda decision supported?

More in­for­ma­tion

IAS 12 — Multiple tax consequences of recovering an asset

Yes

IAS 38 — Presentation of player transfer payments

Yes; however, we are concerned that the discussion under the header “Is there a circumstance in which the entity would recognise the transfer payment received as revenue applying IFRS 15” may introduce diversity in practice in the presentation of player registration rights as intangible assets vs inventory where it does not currently exist. We believe that it would be useful to clarify the fact pattern presented consistently with the description provided in the submission by amending item b.

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

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February 2020 IASB meeting agenda posted

14 Feb 2020

The IASB has posted the agenda for its next meeting, which will be held at its offices in London on 26–27 February 2020. There are six topics on the agenda.

The Board will discuss the following:

  • IBOR reform and the effects on financial reporting
  • Disclosure initiative — Targeted Standards-level review of disclosures
  • Disclosure initiative — Accounting policies
  • Amendments to IFRS 17 Insurance Contracts
  • Consistent application matters
  • Business combinations under common control

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.

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Summary of the December 2019 ASAF meeting now available

14 Feb 2020

The IASB staff have published a summary of the Accounting Standards Advisory Forum (ASAF) meeting held in London on 17 December 2019.

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

  • Agenda Consultation (1–11): The ASAF discussed potential financial reporting priorities for the Board to discuss in the request for information. As high-level recommendations ASAF members stated that the Board should communicate its resource capacity in the RFI, that the Board should prioritise post-implementation reviews and the completion of existing major projects, and should also prioritise the effects of technology and digital reporting on standard-setting.
  • Post-implementation review of IFRS 10, IFRS 11, and IFRS 12 (12–18): The ASAF was given an update on the feedback received from outreach in Phase 1 of the post-implementation review and commented on potential issues to be considered in the RFI.
  • Accounting for intangible assets (19–28): The KASB gave a presentation on its research project on exploring a way to complement financial statements with a separate statement that identifies core intangibles and presents their value.
  • IFRS 17 Insurance Contracts (29–35): The ASAF received an overview of the feedback on the exposure draft Amendments to IFRS 17 and was updated on the preliminary decisions of the Board at the November and December 2019 meetings.
  • Agenda planning (36–38) — The ASAF discussed the proposed agenda for its April 2020 meeting.

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

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Report from the December 2019 Emerging Economies Group meeting

12 Feb 2020

The 18th meeting of the IASB's Emerging Economies Group (EEG) was held Xiamen, China on 2–4 December 2019. The IASB has published a full report from the meeting.

Participants at the meeting, which was chaired by IASB member Darrel Scott, discussed primary financial statements, the IBOR reform, the review of the IFRS for SMEs, the Due Process Handbook Review, IAS 16 and proceeds before the intended use, the 2020 Agenda consultation, China’s experience on implementing IFRS 9, and extractive activities.

The next meeting of the EEG will be held in South Africa on 11–13 May 2020.

Please click for access to the full report (eight pages) on the IASB website.

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IASB posts webinar on exposure draft on general presentation and disclosures, announces Japanese language presentation

11 Feb 2020

The IASB has posted a webinar on Exposure Draft, ‘General Presentation and Disclosures’.

The webinar summarises main proposals in the exposure draft, including subtotals in the statement of profit and loss, disaggregating information, and management performance measures.

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

In addition, the IASB hosted a similar webinar in the Japanese language on 19 February 2020. Please click here to view this webinar.

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Agenda for the February 2020 DPOC meeting

11 Feb 2020

The Trustees of the IFRS Foundation will be meeting in Brussels from 18 to 20 February 2020. However, only the meeting of the Due Process Oversight Committee (DPOC) on 18 February will be held in public.

The agenda for the DPOC meeting is summarised below.

Tuesday, 18 February 2020 (9:45–10:50)

  • Introduction and actions from the DPOC meeting held on 15 October 2019 and the public call held on 16 December 2019
  • Technical activities: Key issues and update
  • Five-yearly consultation on the IASB work programme - update on progress
  • IBOR phase 2
  • ITCG membership
  • Review of the Due Process Handbook
  • Correspondence
  • Summary

Agenda papers for the meeting are available on the IASB website.

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IFRS Foundation appoints new Chair of the IFRS Advisory Council

11 Feb 2020

The Trustees of the IFRS Foundation have announced that Bill Coen has been appointed as new Chair of the IFRS Advisory Council.

Mr Coen follows Joanna Perry whose term ended in December 2019. He was Secretary General of the Basel Committee on Banking Supervision from 2014 to 2019 and Deputy Secretary General from 2007 to 2014. Mr Coen served on the IFRS Advisory Council from 2016 until 2019.

Mr Coen has been appointed for 12 months and can be reappointed once. At the end of phase, the Trustees intend to appoint a new Chair through a public nomination process.

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

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European Reporting Lab issues report on climate-related disclosures

06 Feb 2020

The European Lab Project Task Force on Climate-related Reporting has issued, ‘How to improve climate-related reporting — A summary of good practices from Europe and beyond’.

The report provides an analysis of the current state of climate-related reporting of approximately 150 European companies and focuses on “identifying good reporting practices and assessing the level of maturity in the implementation of the TCFD recommendations, while also taking into consideration the climate-related reporting elements of the NFRD and the related non-binding Guidelines on non-financial reporting and Guidelines on reporting climate-related information.” In additional, the European Lab Project Task Force has issued two supplement documents which complement the report with detailed findings and in-depth review of scenario analysis reporting.

For more information, see the press release and summary brochure on the EFRAG’s Web site as well as this page offering access to the three documents.

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