The post-implementation review process for IFRS 10, IFRS 11, and IFRS 12 was officially added to the IASB's agenda in September 2019. The IASB has been gathering information to determine the scope of the review and to identify the main questions that need to be answered before the implementation of IFRS 10, IFRS 11, and IFRS 12 can be assessed.

The information gathered so far indicates that many stakeholders believe that the standards work, however, IASB stakeholders have also indicated that there are areas where the standards to their mind might still benefit from improvements. Based on this feedback, the Board agreed the following matters be examined further in the RFI:

IFRS 10 Consolidated Financial Statements provides a single consolidation model that identifies control as the basis for consolidation for all types of entities. The following areas might warrant further investigation:

• power over an investee, including relevant activities, rights that give an investor power over an investee and control without a majority of voting rights;
• the link between power and returns, including principal and agent and non-contractual agency relationships;
• investment entities, including criteria for identifying an investment entity and subsidiaries that are investment entities; and
• accounting requirements for
  • transactions that give rise to a change in ownership; and
  • the partial acquisition of a subsidiary that does not constitute a business.

IFRS 11 Joint Arrangements establishes a principle-based approach for the accounting for joint arrangements, in which the parties recognise their rights and obligations arising from the arrangements. The following areas might warrant further investigation:

• collaborative arrangements outside the scope of IFRS 11;
• classification of joint arrangements; and
• accounting requirements for joint operations.

IFRS 12 Disclosure of Interests in Other Entities combines, enhances and replaces the disclosure requirements for subsidiaries, joint arrangements, associates and unconsolidated structured entities. There were relatively few comments on IFRS 12 requirements and feedback was mixed. Therefore, the RFI aims to establish to what extent the requirements assist an entity to meet the objective of the standard.

After the comment period ends, the IASB will consider the comments received along with information gathered through other consultation activities. The final conclusions of the IASB will be presented in a report and a feedback statement which will also set out the steps the IASB believes should be taken as a result of the review. The Board could decide to add a standard-setting project to its agenda, consider one or more matters further as part of its research programme, or both. The Board could also decide to take no action.

Comments on the RFI are requested by 10 May 2021. The request for information and a corresponding press release are available on the IASB website. Deloitte has released an IFRS in Focus newsletter outlining the contents of the RFI.

On COVID-19, Ms Lloyd noted that the IASB's approach to dealing with the effects of the pandemic was similar to the FASB’s approach. The IASB published educational material to explain how to apply the existing requirements in IFRSs in the context of COVID-19 and issued one small amendment to IFRS 16. The IASB also reconfigured its work plan to allow for the extra demands that have been put on the stakeholders.

Regarding other important Board developments in 2020, Ms Lloyd pointed out that the IASB finalised amendments to IFRS 17, completed important changes to several standards in response to the IBOR reform, and launched two important consultations — on primary financial statements and on goodwill and impairment.

As an example of important developments to be expected next year, Ms Lloyd noted the agenda consultation the IASB will launch in early 2021. She especially encouraged responding to the consultation as this is an important opportunity for the stakeholders to tell the IASB which standard-setting projects they think are important for the IASB to consider and how the IASB should prioritise its work.

Lastly, Ms Lloyd discussed developments in sustainability reporting and pointed at the Trustees' consultation paper published to assess demand for global sustainability standards and, if demand is strong, to assess whether and to what extent the IFRS Foundation might contribute to the development of such standards.

The full text of the speech is available on the IASB website.

The AICPA conference ran from 7 to 9 December and featured speeches by — as well as panel discussions and question-and-answer sessions with — members of the SEC, PCAOB, FASB, and IASB and professionals from various industries. Our US colleagues have prepared a Heads Up newsletter with highlights from all days of the conference.

Oliver Gottlieb, Matthias Meitner, and Larissa van Deventer will join the CMAC for a three-year term beginning 1 January 2021, renewable once for an additional three-year term.

Additional information, including information on the backgrounds of the new members, is available on the IASB website.

The amendments replace the 2019 IFRS Taxonomy with the most recent one published by the IFRS Foundation in March 2020 as core taxonomy. The ESEF is amended on a yearly basis to reflect updates to the IFRS Taxonomy published by the IFRS Foundation.

Please click for the following additional information on the ESMA website:

• Press release
• Amendments

Note: A corresponding delegated regulation was published in the Offical Journal of the European Union on 18 December 2020.

By the end of April 2021, several of the EFRAG Board members will have served their maximum term of six years and will rotate off the Board. Other members for which the term expires are eligible for reappointment. European stakeholder organisations and national standard setters in countries that are part of EFRAG’s membership and new organisations that are joining the EFRAG membership are invited to nominate candidates.

Please click for more information on the EFRAG website.

Each day of the event offers a keynote address by a member of the Deloitte Global IFRS Leadership Team (addressing IFRS 9, IFRS 15, and IFRS 16, respectively), which is then followed by a roundtable on industry perspectives or on technical and implementation questions, followed again each day by a Q&A session. Spanning all three days of the event, there is a three-part series on the impact of COVID-19 on financial reporting.

Please click for more information and registration for the event.

During the meeting, the IASB will discuss the following:

• Maintenance and consistent application
• Comprehensive review of the IFRS for SMEs
• Disclosure initiative — Accounting policies
• Primary financial statements
• Post-implementation review of IFRS 9
• Disclosure initiative — Subsidiaries that are SMEs
• Financial instruments with characteristics of equity
• Pension benefits that depend on asset returns

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.

The committee discussed the feedback on one tentative agenda decision and four new issues:

Agenda decision to finalise

Supply Chain Financing Arrangements—Reverse Factoring: In June 2020, the Committee published a tentative agenda decision which analyses the presentation of liabilities arising from reverse financing arrangement in the statement of financial position, statement of cash flows and the related disclosure. The Committee decided to finalise the agenda decision with some suggested amendments in the wording.

New issues

IAS 1 Presentation of Financial Statements—Classification of debt with covenants as current or non-current: The Committee members generally agree with the analysis how an entity determine whether it has "the right to defer settlement" when a long-term liability is subject to a condition and its compliance with the condition is tested at dates after the reporting date, applying the amended IAS 1, in the three cases described.

IAS 19 Employee Benefits—Attributing benefit to periods of service: The Committee members agreed the conclusion of the periods of service an entity attributes benefit for a defined benefit plan in a scenario where the amount of the retirement benefit an employee is entitled to depends on the length of services before retirement but raised concerns it deviates from the general views in practice.

IAS 38 Intangible Assets—Configuration or customisation of costs in a cloud computing arrangement: The Committee members agreed with the analysis of the accounting for costs of configuring and customising the suppliers' application software to which it receives access in future and the reference to IFRS 15 for the identification and timing of the services provided by the supplier.

IFRS 9 Financial Instruments—Hedging variability in cash flows due to real interest rates: The Committee members agreed with the conclusion that a hedge of the variability in cash flows arising from the changes in real interest rate based on inflation index cannot be accounted for as a cash flow hedge.

For all of the new issues, the Committee members agreed that the principles and requirements in the relevant Standards provide an adequate basis to determine the appropriate accounting for the issue and that the Committee should publish a tentative agenda decision stating that no further action is required.

More In­for­ma­tion

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

The evidence the IASB is looking for includes responses to consultative documents, fieldwork such as assessing systems changes or the hypothetical application of a proposed new financial reporting requirement, empirical analysis from studies of reported accounting data, share price relationships and analysts’ forecasts, the results of experimental studies, analytical modelling, and collecting and analysing views from surveys.

The papers in this round address the following topics (all links to the IASB website):

• Financial Statement Comparability in Extractive Industries: International Evidence
• An Assessment of Corporate Disclosures of IFRS 15: Revenue from Contracts with Customers
• The Impact of Hedging and Hedge Reporting on Managers’ and Investors’ Decisions
• Are Non-GAAP Measures Running Amok? Evidence on the Proliferation of Non-GAAP Adjustments and the Quality of the Related Disclosures
• Income Statement Presentation and Forecasting Quality

In September 2020, the Trustees of the IFRS Foundation published a consultation paper to assess demand for global sustainability standards and, if demand is strong, assess whether and to what extent the Foundation might contribute to the development of such standards. The paper noted the option of creating the SSB. The new board could operate alongside the IASB under the same three-tier governance structure, build on existing developments, and collaborate with other bodies and initiatives in sustainability, focusing initially on climate-related matters.

In his letter, Mr Carney notes:

The IFRS Foundation has an essential role to play in making this vision a reality, and I fully endorse your proposal for a new Sustainability Standards Board under the Foundation’s remit. The Foundation, with its track record of robust, reliable and independent global standard-setting should play a pivotal role in delivering sustainability reporting standards that are in the public interest.

Please click to download the full letter from the IASB website.