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AAOIFI statement on COVID-19 accounting implications for Islamic financial institutions

22 May 2020

The Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) has published a statement 'Accounting implications of the impact of COVID-19 pandemic'.

The objective of the statement is to provide clarifications to Islamic financial institutions for the application of AAOIFI financial accounting standards (FASs) and the AAOIFI's Conceptual Framework considering certain pertinent issues arising due to economic factors and regulatory interventions in the wake of the COVID-­19 pandemic. AAOIFI is of the view that the FASs are robust and flexible enough to address the challenges posed by the prevalent uncertainty in the environment, but emphasises that institutions are encouraged to provide additional disclosures on voluntary basis to enable the users of the financial statements to better understand the financial position and performance of the institutions.

Please click to access the statement on the AAOIFI website.

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IASB announces webinars of PFS ED and on Goodwill DP

22 May 2020

In December 2019, the IASB published the exposure draft of a new standard 'General Presentation and Disclosures' that is intended to replace IAS 1 'Presentation of Financial Statements' and in March 2020 a discussion paper 'Business Combinations — Disclosures, Goodwill and Impairment' was published. Both consultation documents will see live webinars in early June.

On Wednesday 10 June 2020 at 11am (BST) the live webinar on the Board’s exposure draft General Presentation and Disclosures will be held and will explain the Board’s detailed proposals for subtotals and categories in the statement of profit and loss. The webinar will last approximately 45 minutes and will include a question-and-answer session. More information is available here.

On Friday 5 June 2020 at 11am (BST) the live webinar on the Board’s discussion paper Business Combinations — Disclosures, Goodwill and Impairment will be held and will provide an overview of the discussion paper. The webinar will last approximately 45 minutes and will include a question-and-answer session. More information is available here.


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IIRC publishes consultation draft of its revised Framework

22 May 2020

In February 2020, the International Integrated Reporting Council (IIRC) launched the revision of the International <IR> Framework and called for market feedback on specific themes to inform the nature and direction of the revision. A consultation draft of the revised Framework has now been released for a 90 day comment period.

The consultation draft has been informed by the 300 responses the IIRC received on three topic papers published in February, ongoing observation of market practice internationally, as well as the detailed deliberations of the IIRC’s Framework Panel, a diverse group of reporting experts from the business, investor and accountancy communities. Feedback on the draft is requested through an online survey and via participation in one of over 20 virtual roundtables hosted by the IIRC’s partners globally.

Please click for more information, access to the draft and access to a companion document setting out the basis for the proposed Framework revisions on the IIRC website.

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ESMA statement on the implications of the COVID-19 outbreak on the half-yearly financial reports

20 May 2020

The European Securities and Markets Authority (ESMA) has issued a public statement calling for transparency on COVID-19 effects in half-yearly financial reports.

The statement highlights:

  • the importance of providing relevant and reliable information, which may require issuers to make use of the time allowed by national law to publish half-yearly financial reports while not unduly delaying the timing of publication;
  • the importance of updating the information included in the latest annual accounts to adequately inform stakeholders of the impacts of COVID-19, in particular in relation to significant uncertainties and risks, going concern, impairment of non-financial assets and presentation in the statement of profit or loss; and
  • the need for entity-specific information on the past and expected future impact of COVID-19 on the strategic orientation and targets, operations, performance of issuers as well as any mitigating actions put in place to address the effects of the pandemic.

ESMA also notes that the statement is also applicable to financial statements in other interim periods when IAS 34 Interim Financial Reporting is applied.

Please click to access the statement on the ESMA website.

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EFRAG issues annual review for 2019

19 May 2020

The European Financial Reporting Advisory Group (EFRAG) has published its 2019 annual review.

This publication includes reports from the EFRAG President Jean-Paul Gauzès and the TEG Chairwoman Chiara Del Prete. It also features EFRAG's continued work on IFRS 17 Insurance Contracts; the work on accounting for long-term equity instruments; research projects on intangibles and crypto-assets and liabilities.

The annual review is available on the EFRAG website.

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Outreach event on primary financial statements

18 May 2020

On 14 May 2020, a web-based outreach event on primary financial statements co-hosted by FSR – Danish Auditors and the Confederation of Danish Industry (DI) with participation of IASB and EFRAG representatives drew a wide international audience. A recording of the event is now available.

The event was organised into a general introductory section and the discussion of five key topics (each again introduced by IASB and EFRAG) that where then opened to questions from the audience. The agenda below indicates where during the two-and-a-half hour recording the individual topics were discussed:

  • Opening and welcome
  • General introduction to the IASB exposure draft General Presentation and Disclosures (begins at about 5:00 minutes)
  • EFRAG’s view on the topic (begins at about 12:00 minutes)
  • Key Topic 1 – Defined lines and subtotals in the income statement – improved comparability or imposed uniformity? (begins at about 21:00 minutes)
  • Key Topic 2 – Looking at the new subtotals – what is the impact and will they work for all industries? (begins at about 1:20:00 hours)
  • Key Topic 3 – Management performance measures – definition, disclosure and unusual items: Will management still be able to explain the overall performance / generation of income in the context of the activities and business strategy? (begins at about 1:42:00 hours)
  • Key Topic 4 – Principles of aggregation and disaggregation – new proposals expected compared to how companies disaggregate information today (begins at about 2:19:00 hours)
  • Key Topic 5 – Statement of cash flows – change to the starting point, new disaggregation due to new line items introduced and removal of classification choice for interest and dividends (begins at about 2:27:00 hours, introduction by IASB and EFRAG only, no discussion due to reasons of time)

The recording of the outreach event is available here. You can also access the slides for the event on the EFRAG website.

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Podcast on corporate reporting and the coronavirus crisis

18 May 2020

Accountancy Europe has released a podcast exploring the repercussions of the corona crisis for corporate reporting and particularly focusing on banks. The podcast also discusses how IFRS 9 can incorporate the irregularities of the current situation and outlines other accommodations that have been made for both companies and banks to report on this period.

The 20-minute podcast can be accessed through the press release on Accountancy Europe's website. It is the third in a series of podcasts focusing on different aspects of the crisis. The entire series is available on Accountancy Europe's podcast page.

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IASB votes to finalise IFRS 16 amendment

15 May 2020

In a supplementary meeting today, the IASB considered the feedback it received on its 24 April exposure draft 'Covid-19-Related Rent Concessions (Proposed amendment to IFRS 16)' that contained a proposed amendment that would provide lessees with an exemption from assessing whether a COVID-19-related rent concession is a lease modification. The 14-day comment letter period closed on 8 May 2020 and the Board received 110 comment letters (including late submissions).

Deviating slightly from the original proposal but not changing the core practical relief, the Board decided to allow the expedient to be applied to COVID-19-related rent concessions to payments originally due on or before 30 June 2021. The Board also decided to require disclosure of the amount recognised in profit or loss to reflect changes in lease payments that arise from COVID-19-related rent concessions. Finally, the Board decided that in the reporting period in which a lessee first applies the amendment, it is not required to disclose the quantitative information required by paragraph 28(f) of IAS 8. All decisions were supported by 13 Board members.

The amendment will have an effective date of 1 June 2020 with early application permitted. Despite the wording "annual reporting periods" the amendment would also be available for interim reports.

For lessors, the Board decided to take no further action. It argued that as many entities face significant challenges at the moment, there needs to be sufficient reason to undertake standard-setting, which the Board did not see enough evidence for. This decision was supported by all 14 Board members.

The Board did not see a need for re-exposure and no Board member intends to dissent from the issuance of the amendment. The Board is satisfied that it has complied with the applicable due process requirements and gave permission to begin the balloting process for the amendment. These decisions were supported by all 14 Board members.The staff expect issuing a final amendment on or around 28 May 2020.

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

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Summary of the March 2020 CMAC meeting

14 May 2020

Representatives from the International Accounting Standards Board (IASB) met with the Capital Markets Advisory Council (CMAC) via video conference on 26 March 2020. Notes from the joint meeting have now been released.

The topics discussed at the meeting included:

  • Primary financial statements.
  • Financial instruments with characteristics of equity.
  • IBOR reform and its effects on financial reporting.
  • Management commentary.

For more in­for­ma­tion, see the meeting page and the meeting summary on the IASB's website.

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Agenda for the June 2020 ITCG meeting

14 May 2020

The agenda is available for the next meeting of the IFRS Taxonomy Consultative Group (ITCG), which will be held via video conference on 2 June 2020.

The agenda is sum­marised below:

Tuesday 2 June 2020 (11:00-16:00)

  • Review of common reporting practice related to the primary financial state­ments (stakeholder feedback, earnings per share, statement of financial performance)
  • Review of common reporting practice related to IAS 19 Employee Benefits
  • Upcoming IFRS Taxonomy consultation documents

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

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