Developed to help the AASB better understand what financial statements are currently being prepared as well the requirements of readers of for-profit entities’ financial statements, responses to the surveys will feed into the AASB's revised conceptual framework project.

Please click for more information on the surveys, which should each take 10-15 minutes to complete. The surveys are open until 30 September 2018.

The podcast features dis­cus­sions of the following topics:

• Goodwill and impairment.
• Composition of the Management Commentary Consultative Group.
• Transaction involving commodities and cryptocurrencies.
• Rate-regulated activities.
• Narrow-scope amendments to IAS 37.

The podcast can be accessed through the press release on the IASB website. More in­for­ma­tion on the topics discussed is available through our com­pre­hen­sive notes taken by Deloitte observers of the July 2018 meeting.

The webcasts discuss the Board’s preferred approach when addressing the classification of (1) de­riv­a­tive on own equity and (2) the classification of compound instruments and redemption obligation arrangements.

Future webcasts in the series will cover:

• Pre­sen­ta­tion of equity in­stru­ments.
• Pre­sen­ta­tion of financial li­a­bil­i­ties.

For more in­for­ma­tion, see the following:

• Press release for classification of derivatives on own equity on the IASB’s website and the webcast on the IFRS Foundation’s YouTube channel.
• Press release for classification of compound instruments and redemption obligation arrangements on the IASB's website and the webcast on the IFRS Foundation's YouTube channel.

Sixteen leading banks convened by the UN Environment Finance Initiative (UNEP FI) have released new methodologies that aim to help the banking industry to understand and manage the physical risks and opportunities of climate change in their loan portfolios. The methodologies are designed to enable banks to be more transparent about their exposure to climate-related risks and opportunities, in line with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). Navigating a New Climate can be downloaded here from the UNEP FI website.

The World Business Council for Sustainable Development (WBCSD) has released Climate-related financial disclosure by oil and gas companies: implementing the TCFD recommendations. The report provides an in-depth description of the current state of climate-related financial disclosure and effective disclosure practices among leading oil and gas companies. It is available here on the WBCSD website.

The Global Reporting Initiative (GRI), Principles for Responsible Investment (PRI) and the United Nations Global Compact have released ten recommendations intended to provide guidance to businesses on how to better ensure their disclosures in relation to the Sustainable Development Goals (SDGs) are useful for investors. In Focus: Addressing Investor Needs in Business Reporting on the SDGs is available here on the GRI website.

The Climate Disclosure Standards Board (CDSB) announces that two months after the launch of the TCFD Knowledge Hub 400 resources have by now been uploaded to the platform, providing additional guidance and insights into climate-related financial disclosures. In the next few months, the platform will also be expanded to include two new sections on case studies and on upcoming events. Please click for more information on the CDSB website.

The UK Department for Business, Energy and Industrial Strategy (BEIS) has published a response to its consultation on a streamlined and more effective energy and carbon reporting framework (SECR) for the UK. The reporting framework will apply to all quoted companies and large UK incorporated unquoted companies and is expected to be put in place from April 2019. The companies will have to provide the information in their annual reports in line with the TCFD recommendation to include climate-related disclosures as part of mainstream financial filings. The full set of Government proposals and a final impact assessment can be found on the BEIS website.

The symposium on accounting research will gather together academics, international standard-setting representatives, finance and accounting directors, chartered accountants and external auditors around series of round tables on changes in companies’ information and its related financial or extra-financial components. In particular, debates will deal with the way financial communication has evolved to include an increasing number of extra-financial items, on the various characteristics of this information, on the potential boundaries and barriers and on the expected and desirable next steps.

Participation in the symposium is free of charge, however, prior registration is required.

Please click for more information and registration on the ANC website.

Rate-regulated Activities

The Board supported the recommendation that the model should apply the same measurement requirements for regulatory liabilities and regulatory assets. The Board supported the other staff recommendations subject to (i) the development of further guidance to help entities assess which measurement method would provide the best outcome; and (ii) consideration that not all timing differences would be subject to the thought-process developed to assess significant financing components.

Management Commentary

The staff gave an update on the project to revise the Management Commentary Practice Statement. The membership of the Management Commentary Consultative Group was announced on 10 July 2018. An Exposure Draft for a revised Practice Statement can be expected in 2020.

Business Combinations under Common Control

The staff gave an oral update of the project, including feedback from the recent ASAF meeting.

Conceptual Framework

This Board discussed a paper analysing when and how preparers of financial statements should refer to the new Conceptual Framework for assistance in developing accounting policies. No decisions were made.  

Implementation

The Board supported the IFRS Interpretations Committee’s proposal to amend IAS 37 to specify that the ‘cost of fulfilling’ a contract comprises the ‘costs that relate directly to the contract’.

The Board supported the staff recommendation to start a narrow-scope project to address commodity loans. The Board also decided to ask the Interpretations Committee to consider how an entity should apply existing IFRS requirements to holdings of cryptocurrencies, mining and ICOs.

Goodwill and Impairment

The Board discussed how to focus its work on the Goodwill and Impairment research project and decided to identify improvements to the disclosure requirements; pursue changes to the value in use calculations; not to characterise impairment testing as assessing whether the carrying amount of acquired goodwill is recoverable; and not to remove differences between accounting requirements for internally-generated intangible assets and those for intangible assets acquired in a business combination. 

Disclosure Initiative

This session covered five topics: Definition of Material; Targeted Standards-level Review of Disclosures—Guidance for the Board—Drafting Disclosure Requirements; Accounting Policy Disclosure; Location of Information; Technology and Digital Reporting Considerations.

• The Board decided to complete the proposal to amend the definition of material so as to make the changes effective for periods beginning on or after 1 January 2020.

• In relation to the guidance for the Board on how to draft disclosure requirements, the Board made several decisions about when to use prescriptive language, ways to improve consistency of wording and how to organise the disclosure requirements within a Standard. The Board decided to use IAS 19 Employee Benefits and IFRS 13 Fair Value Measurement to test the new approach.
• The Board had reservations about amending IAS 1:117–124 to require entities to disclose their material accounting policies rather than their significant accounting policies and asked the staff for some examples. The Board will develop related guidance and examples for inclusion in the Materiality Practice Statement.
• The Board decided not to develop requirements about IFRS information outside the financial statements or non-IFRS information inside the financial statements.
• The Board decided that its guidance should include relevant matters to consider when developing and drafting disclosure objectives and requirements. The broader implications of technology on financial reporting will be considered as part of the IFRS Foundation’s Technology Initiative.

Accounting Policies and Accounting Estimates

The Board received an update of progress on its Exposure Draft Accounting Policies and Accounting Estimates (Proposed amendments to IAS 8). While some respondents to the ED said the proposed amendments would improve clarity others questioned whether the benefits of finalising the proposed amendments would outweigh the costs of doing so. The staff have consulted with the Accounting Standards Advisory Forum and, as a next step, will seek the advice of the IFRS Interpretations Committee.

Emerging Economies Group Update

The meeting concluded with an update of the most recent meeting of the IASB’s Emerging Economies Group.

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

Below is an analysis of all changes made to the work plan since our last analysis on 22 June 2018.

Research projects

• Business Combinations Under Common Control — The expected date of the decision paper is push into the second half of 2019.
• Disclosure Initiative — Principles of Disclosure — This project is now in the summary stage.
• Discount Rates — This project is now in the summary stage which is expected to be completed in the fourth quarter of 2018.
• Financial Instruments With Characteristics of Equity — This project is now in the feedback stage which is expected to be completed in the first half of 2019.
• Post-Implementation Review of IFRS 13 Fair Value Measurement — A feedback statement is now expected in the fourth quarter of 2018.
• Share-Based Payment — This project is now in the summary stage which is expected to be completed in September 2018.

Main­te­nance projects

• Accounting Policies and Accounting Estimates (Amendments to IAS 8) — A decision on the project is expected in October 2018.
• Accounting Policy Changes (Amendments to IAS 8) — The expected date of the exposure draft is narrowed to the fourth quarter of 2018.
• Classification of Liabilities (Amendments to IAS 1) — A decision on the project is now expected in September 2018.
• Costs Considered in Assessing Whether a Contract Is Onerous (Amendments to IAS 37) — New entry to the workflow with an exposure draft expected to be issued in the fourth quarter of 2018.
• Definition of a Business (Amendments to IFRS 3) — The expected issuance of IFRS amendments is now September 2018.
• Disclosure Initiative — Targeted Standards-Level Review of Disclosures — This project is now in the exposure draft stage.
• Improvements to IFRS 8 Operating Segments (Amendments to IFRS 8 and IAS 34) — A feedback statement is now expected in the fourth quarter of 2018.

Standard-setting projects

• Management Commentary — An exposure draft is now expected in the first half of 2020.
• Rate-Regulated Activities — The issuance of a discussion paper or exposure draft is now expected in the second half of 2019.

Other projects

• IFRS Taxonomy Update — Common Practice (IFRS 13) — A proposed update is now expected in September 2018.

The above is a faithful com­par­i­son of the IASB work plan at 22 June 2018 and at 20 July 2018. For access to the current IASB work plan at any time, please click here.

In our response to the consultation, we also note that if reducing local GAAP differences were to be considered a priority in the EU and if feasibility studies show that obstacles can be overcome, we would favour initiatives that would gradually allow closer or fuller convergence with IFRS. This could take place through amendments to the Directives or the IAS Regulation allowing companies to voluntarily adopt IFRS in individual or consolidated financial statements, rather than leaving this to the discretion of Member States to decide whether or not this option is granted to the companies in their jurisdiction.

Please click to download the full comment letter here (cover letter with main messages first, followed by completed questionnaire).

Although developed in connection with the draft framework, the survey also explores general questions such as the perception of entities' use of financial and non-financial performance measures outside of financial statements and whether those disclosures should be further explained or clarified.

The survey then tries to establish whether applying the type of guidance in the framework would improve the consistency, comparability and transparency of financial and non-financial performance measures reported outside of financial statements.

Please click to access the short survey (eight to twelve questions, depending on user group). The survey is open until 1 October 2018.

This webcasts discusses the Board’s preferred approach and classification of non-derivative financial instruments.

Future webcasts in the series will cover:

• Clas­si­fi­ca­tion of de­riv­a­tives on own equity.
• Clas­si­fi­ca­tion of compound in­stru­ments and re­demp­tion oblig­a­tion arrange­ments.
• Pre­sen­ta­tion of equity in­stru­ments.
• Pre­sen­ta­tion of financial li­a­bil­i­ties.

For more information, see the press release on the IASB’s website and the webcast on the IFRS Foundation’s YouTube channel.