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IFRS Advisory Council membership update

18 Nov 2020

The Trustees of the IFRS Foundation have announced appointments and re-appointments to the IFRS Advisory Council effective 1 January 2021.

The Advisory Council is the formal advisory body to the Trustees and the IASB. It advises the IFRS Foundation on its strategic direction, technical work plan and priorities.

The new and reappointed members of the Advisory Council are:

  • Kristian Koktvedgaard - BusinessEurope
  • Sibel Ulusoy Tokgöz - Capital Markets Board of Turkey
  • Thorsten Sellhorn - European Accounting Association (EAA)
  • Javier de Frutos - European Federation of Financial Analysts Societies (EFFAS)
  • Saskia Slomp - European Financial Reporting Advisory Group (EFRAG)
  • Ken Warren - External Reporting (XRB), New Zealand
  • Ron Edmonds - Financial Executives International (FEI)
  • Ian Burger - International Corporate Governance Network
  • Antonio Quesada - International Organization of Securities Commissions (IOSCO)
  • Marie Seiller - International Organization of Securities Commissions (IOSCO)
  • Alan Trotter - Investment Company Institute
  • Henry Daubeney - Pricewaterhouse Coopers
  • Barbara McGowan - World Bank
  • Eduardo Flores
  • Tania Wimberley 

All appointments take effect 1 January 2021 and are for a three-year period.

In addition, the Trustees note that the following members are stepping down from the Council at the end of 2020 or have already stepped down earlier this year: Areewan Aimdilokwong, Clive Brown, Garth Coppin, Jean Paul Gauzes, Professor Ann Jorissen, Ton Meershoek, Pam O'Connell.

The press release announcing the new appointments can be found on the IASB's website.

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Until the end of March 2021, all meetings to be held remotely

16 Nov 2020

Since early March, all meetings of the advisory and consultative groups of the IFRS Foundation have been held remotely, with observers and participants alike videoconferencing in. The Foundation has now decided to extend with this process for all meetings of advisory and consultative groups until the end of March 2021.

The IFRS Foundation disclosed this decision in its Coronavirus update.

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IASB publishes editorial corrections

16 Nov 2020

The IASB has published editorial corrections to IFRS 9 'Financial Instruments' and IAS 39 'Financial Instruments: Recognition and Measurement'.

The errors affect the stand-alone standards only.

Editorial corrections do not change the meaning or application of pronouncements, but instead correct inadvertent errors. The editorial corrections can be viewed on the editorial corrections page of the IASB's website.

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European Lab publishes report on the progress of its task force on possible EU non-financial reporting standards

16 Nov 2020

The European Financial Reporting Advisory Group (EFRAG) has published a report of the progress of its project task force on preparatory work for the elaboration of possible EU non-financial reporting standards.

For the first phase of the project, the task force was split into several work streams to assess the current situation and report on it to the European Commission. The streams included focuses on special groups (e.g. financial institutions, SMEs) EU focuses (e.g. current reporting practices and momentum of reporting in the EU) and an international focus (which initiatives exist and can their work be leveraged).

While the EU-focused assessment includes "all current, developing and expected European initiatives", the international assessment, despite the 31 October cut-off date, makes no reference to newer initiatives such as the Trustees' consultation on establishing a global sustainability standard-setter, the WEF publication on an ESG framework and common metrics for reporting or the statement of intent of CDP, CDSB, GRI, IIRC, and SASB to work together towards a comprehensive corporate reporting system. A vague reference to these developments might be read into the statement that "Convergence and harmonisation efforts among some initiatives are taking place. These efforts include Memorandums of Understanding, Statements of Intent, Consultation processes and, from a technical standpoint, tables of translation from one initiative to another." However, the report dismisses these efforts in the very same paragraph and states: "Despite such efforts, the number of initiatives has continued to grow over the past years."

Please click to access the full progress report on the EFRAG website.

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Trustees appoint Andreas Barckow to succeed Hans Hoogervorst

12 Nov 2020

The Trustees of the IFRS Foundation, the oversight body of the International Accounting Standards Board (IASB), today announced the appointment of Prof Dr Andreas Barckow as next chair of the IASB.

Dr Barckow, currently the President of the Accounting Standards Committee of Germany (ACSG), will succeed Hans Hoogervorst on his retirement as chair of the IASB at the end of June 2021.

Dr Barckow, a former Deloitte Partner, has been an active participant in numerous advisory bodies to the IFRS Foundation and the IASB, including membership of the IASB’s Accounting Standards Advisory Forum (ASAF) and the IFRS Advisory Council, and is a highly recognised expert on IFRSs at national, European and international level. He will step down from all his present positions in order to join the IASB.

A biography of Dr Barckow and statements on the appointment are available in the IASB's press release and the press release on the ACSG website.

The International Organization of Securities Commissions (IOSCO) has published a Statement of the IFRS Foundation Monitoring Board on the appointment of Mr. Andreas Barckow as the next Chair of the IASB welcoming the appointment.

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IVSC consults on future agenda

12 Nov 2020

The International Valuation Standards Council (IVSC) has launched a consultation to gain feedback on the topics that IVSC should address as part of its current agenda and additional topics that stakeholders think should be priorities or added to IVSC’s agenda.

Major groups of valuation topics identified in the consultation paper as potential IVSC projects include gaps in the current IVS suite of standards, automated valuation models, environmental, social and governance aspects, long-term value, social value, uncertainty and risk as well as data management.

Please click to access the consultation paper on the IVSC website. Comments are requested by 15 January 2021.

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Agenda for the December 2020 ASAF meeting

11 Nov 2020

The International Accounting Standards Board (IASB) has released an agenda and meeting papers for the meeting of the Accounting Standards Advisory Forum (ASAF), which is to be held by remote participation on 10 December 2020.

The agenda for the meeting is summarised below:

Thursday, 10 December (11:00-15:00)

  • Rate-regulated activities
    • Main features of the proposals in the forthcoming exposure draft and ASAF members' views on possible outreach activities
  • Cryptoassets
    • EFRAG discussion paper on the accounting for cryptoassets
  • Financial instruments with characteristics of equity
    • Potential refinements to the disclosure requirements in the June 2018 discussion paper
  • Dynamic risk management (oral update on the project)
  • Lack of exchangeability (Amendments to IAS 21)
    • Introduction of the forthcoming exposure draft

For more information, please see the agenda and meeting papers on the IASB's website.

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Pre-meeting summaries for the November 2020 IASB meeting

11 Nov 2020

The IASB will meet via video conference on 18 November for its regular meeting and on 19 November it will meet jointly with the FASB in an educational meeting. We have posted our pre-meeting summaries for the meetings that allow you to follow the IASB’s decision making more closely. For each topic to be discussed, we summarise 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.

IASB meeting

Board work plan update: Last month the Board decided to begin the post-implementation review (PIR) of the IFRS 9 classification and measurement requirements and reconsider at a later date when to begin the PIRs of the IFRS 9 impairment and hedge accounting requirements and of IFRS 15. The staff recommend considering the start dates of those PIRs in the second half of 2021.

Post-implementation review of IFRS 10, IFRS 11 and IFRS 12: The staff will ask to Board to confirm the publication of the request for information (RFI), with a 180-day comment period. The RFI is expected to be published in December.

Maintenance and Consistent Application—Deferred Tax related to Assets and Liabilities arising from a Single Transaction: The Board is finalising amendments to IAS 12. The staff recommend an effective date of 1 January 2023 for the amendments—this will be 18 months after the expected issue date of the amendments in the second quarter of 2021.

Management Commentary: The staff have raised some issues identified during drafting of the Exposure Draft (“sweep issues”). The staff recommend that entities not applying IFRS should be permitted to apply the Practice Statement. The staff also recommend using the term ‘accuracy’ rather than ‘freedom of error’.

Disclosure Initiative, Subsidiaries that are SMEs: The IASB is developing a Standard setting out reduced disclosure requirements for subsidiaries that apply IFRS Standards but meet the definition of an SME. At this meeting, the staff will propose exceptions to the process for adapting disclosure requirements for matters identified by staff when preparing the analysis of adaptions to the disclosure requirements of the IFRS for SMEs Standard or during the Board member’s review of that analysis.

Joint IASB—FASB education meeting

The purpose of this meeting is for the boards to update each other on individual projects that partially or entirely overlap with a project of the other board.

COVID-19: The boards will explain the steps they have taken to respond to the COVID-19, such as implementation and educational guidance and adjustments to their work plans.

Leases other than COVID-19: The IASB staff will explain the recent application questions discussed by the IFRS Interpretations Committee and narrow-scope standard-setting that has been initiated with regard to sale and leaseback transactions. The FASB is monitoring the implementation of its equivalent Standard and in July 2020 added a project to its technical agenda to address issues on which the FASB can act because it already has sufficient information from stakeholders.

Goodwill and Impairment: Both the FASB and the IASB have on their respective agendas projects covering accounting for goodwill. Those projects do not constitute a joint project. However, both boards previously decided to monitor each other’s work because of the largely converged accounting models for business combinations. The FASB’s project is in an active project phase while the IASB’s project is in a research phase.

Supply chain financing: The IASB will describe the issues that have been submitted to the IFRS Interpretations Committee, and the tentative agenda decision it has published. The IASB will also discuss a possible narrow-scope standard-setting project in early 2021. The Big 4 firms submitted an agenda request to the FASB in October 2019 for guidance on disclosure and cash flow statement presentation of supplier finance programmes involving trade payables. Having undertaken research and outreach, the FASB decided in October 2020 to add a project to its agenda to develop disclosure requirements related to supplier finance programmes involving trade payables (a narrow scope).

More information

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

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EFRAG early-stage analysis of rate regulation proposals — preparer perspective

11 Nov 2020

The European Financial Reporting Advisory Group (EFRAG) is inviting preparers to participate in an early-stage analysis of the likely impacts of possible changes to IFRS requirements as a result of the IASB project on the accounting for regulatory assets and regulatory liabilities. The IASB is expected to issue an exposure draft in early 2021.

The EFRAG analysis aims at assessing possible impacts of the new accounting model under consideration for preparers.

Please click for more information on the EFRAG website.

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Deloitte response to ad personam mandate on non-financial reporting standard setting

10 Nov 2020

The Deloitte firms in the European Union have responded to the request of the President of the EFRAG Board to share views on the future governance and framework of EFRAG in the context of possible changes to non-financial reporting by companies.

As general background, we welcome the European Commission’s review of the non-financial reporting directive and support companies disclosing high-quality, transparent, relevant and comparable non-financial information that is connected to financial information within mainstream corporate reporting. We support global standards for reporting these because issues such as climate change are global, and the UN Sustainable Development Goals are of course global. However, we recommend a ‘building block approach’ where core global standards can be supplemented by local requirements.

We recognise the urgency of developing harmonised standards for non-financial reporting, and the particular needs of the EU, given that the EU has adopted reporting requirements that will apply in the relatively near term, particularly for financial sector companies. We are encouraged by recent international developments, including the statement of intent of five leading sustainability and integrated reporting organisations to work together in this area and by the IFRS Foundation’s consultation paper on sustainability reporting.

We agree that EFRAG has an essential role to play with respect to non-financial reporting requirements in the EU. What that role would be will depend on the overall approach agreed by the EU Institutions as well as the outcome of current developments in non-financial information standard-setting at the global level. We can see at least two possible roles and approaches for EFRAG:

  • an influencer and endorsement adviser with respect to global sustainability standards; or
  • standard-setting activities for the EU for non-financial reporting standards.

The expected role of EFRAG in non-financial reporting standard-setting will depend on a proper understanding of what needs to be developed at a European level versus what could be leveraged from global existing and future developments, and related timing. This would have significant implications on the possible changes to EFRAG’s governance and resourcing.

Please click to download our full analysis in the comment letter.

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