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Report on the November 2021 IFRS Advisory Council meeting

14 Dec 2021

A summary report has been released of the meeting of the IFRS Advisory Council held by remote participation on 10 November 2021.

The par­tic­i­pants discussed:

  • Update on Trustees Ac­tiv­i­ties — Received an update on four key announcements from the 3 November United Nations Climate Change Conference (COP26), which included the decision to establish the International Sustainability Standard Board, commitment to consolidate two investor-focused international sustainability standard-setters into the ISSB, publication of the climate-related disclosures prototype and general sustainability disclosure requirements prototype, and locations of the ISSB offices.
  • Update on Board Ac­tiv­i­ties — Received an update on recent Board ac­tiv­i­ties which include connectivity between the IASB and ISSB, resources to support the IASB, cryptocurrencies, intangible assets, goodwill and impairment, management commentary, pension accounting, endorsement, and further updates that would be beneficial to the Advisory Council.
  • Feedback from previous Advisory Council meetings — Updated on how previous discussions by members have been applied to the work of the IASB and IFRS Foundation.
  • Update on sustainability-related reporting — Updated on the latest developments related to the ISSB’s establishment.

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

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TRWG provides recommendations to the ISSB

14 Dec 2021

The IFRS Foundation has made available a webcast that provides the Technical Readiness Working Group’s (TRWG) recommendations to the International Sustainability Standards Board (ISSB).

The webcast provides background information on the TRWG as well as the preparatory work and recommendations by the TRWG related to:

  • Architecture of standards
  • General requirements prototype sustainability matters that affect investors’ assessment of enterprise value.
  • Climate prototype
  • Overview of five other deliverables
  • Other immediate priorities.

The webcast features IFRS Foundation Trustee Lucrezia Reichlin, along with TRWG members Ravi Abeywardana (Technical Director at the Climate Disclosure Standards Board); Veronica Poole (Global IFRS and corporate reporting leader at Deloitte and who represented the World Economic Forum on the TRWG); Spencer Powell (Performance Lead at the Impact Management Project); and Bryan Esterly (Chief Technical Officer for the SASB Standards at the Value Reporting Foundation).

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

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New CMAC members

14 Dec 2021

The IASB's Capital Markets Advisory Committee (CMAC) announces that four new members have been appointed.

Enitan Adebonojo, Jacques de Greling, Kenneth Lee and Ge Xiabo will join the CMAC for a three-year term beginning 1 January 2022, 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.

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ITF calls for support for the ISSB

13 Dec 2021

The industry-led Impact Taskforce (ITF) invited by the G7 Presidency to help answer the question of how the volume and effectiveness of private capital seeking to have a positive social and environmental impact can be accelerated has published its final report.

The report notes that the opportunity to mobilise private capital for public good at an unprecedented scale is real. While a fragmented approach undermines momentum and disclosure of non-financial information remains unfit for purpose at the moment, formation of the IFRS Foundation's International Sustainability Standards Board (ISSB) is hailed as good news. The ITF calls on governments to support and participate in upcoming consultations, ensuring that the ISSB: has an inclusive governance model; balances social and environmental issues; acknowledges and reflects realities of both emerging and developed economies; actively engages small and medium enterprises (SMEs) along the value chain; and is swiftly followed by an assurance regime for all data relevant to enterprise value for public companies.

The ITF also urgently calls for mandatory accounting for impact as a destination and notes that the journey to this goal will require: greater transparency, building on harmonised standards, strong mechanisms to ensure integrity of data, analysis and governance. The report analyses theses aspects as follows:


  • Mandatory impact disclosure is necessary to achieve the SDGs and accelerate behavioural change in capital markets.
  • While mandatory reporting rules are being rolled out, voluntary disclosure practices must improve to meet today’s urgent social and environmental challenges.
  • Investors should be transparent too.


  • A global reporting “baseline” should cover, as a minimum, social and environmental impacts that affect enterprise value.
  • Endorsing a baseline is not enough; governments should urgently “build” on the global baseline and push for standards that explicitly recognise and incorporate the impact on all stakeholders.


  • Putting in place secure, interoperable data infrastructure is essential for telling the full story.
  • Decision-making processes must include those most affected; to ensure impact integrity, a wide range of stakeholders should inform and participate in decision-making.

Small and medium enterprises

  • Successful impact transparency, harmonisation, and integrity will rely on the inclusion and engagement of SMEs.

Emerging markets

  • Capital markets want better information on impact for all stakeholders – and in an increasingly interconnected world, this must include truly global voices.

The report sums up the key messages as follows. There is an urgent need to narrow the gap between rhetoric and delivery. Private capital and enterprise are playing a critical role. The challenges should not be underestimated, but there is a window of opportunity.

Please click to access the full report on the ITF website.

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IASB announces 2023 research forum

13 Dec 2021

The International Accounting Standards Board (IASB) will host its 2023 Research Forum in early November 2023 on the general theme of accounting for intangible assets.

The Forum will be held in conjunction with the journals Accounting in Europe and European Accounting Review. The call for papers notes that researchers are encouraged to contribute evidence on intangible assets from a variety of perspectives. Submissions on the following topics are mentioned in the call for papers as being particularly of interest:

  • Recognition and measurement
    • Internally generated assets
    • Internally generated vs intangible assets acquired in business combinations
    • New types of intangible assets (such as cryptocurrencies, emission rights, cloud computing)
  • Disclosure in financial statements
    • Internally generated and unrecognised assets
    • Research and development expenditure
  • Other information sources
    • Management Commentary
    • Sustainability reporting
  • Related projects
    • Pollutant pricing mechanisms
    • Cryptocurrencies

Please click for more information on the IASB website.

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ESMA integrates latest IFRS updates in its ESEF taxonomy

13 Dec 2021

The European Securities and Markets Authority (ESMA) has published amendments to the European Single Electronic format (ESEF) to update the core taxonomy to the latest updates to IFRSs.

The amendments replace the 2020 IFRS Taxonomy with the most recent one published by the IFRS Foundation in March 2021 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 more information and access to the updated taxonomy on the ESMA website.

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Pre-meeting summaries for the December 2021 IASB meeting

10 Dec 2021

The Board will hold a virtual meeting for three days, starting on Tuesday 14 December 2021. We have posted our pre-meeting summaries for the meeting that allow you to follow the IASB’s decision making more closely. We summarised 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.

The following topics are on the agenda:

Financial Instruments with Characteristics of Equity

The staff are proposing amendments to IAS 32. They recommend that the Board (a) clarify that some financial instruments with contingent settlement provisions can be compound instruments and clarify the measurement requirements for the liability component of such instruments; (b) specify that the term ‘liquidation’ in paragraph 25(b) of IAS 32, refers to when an entity has started the process to permanently cease to trade; (c) specify that the assessment of whether a contractual term is ‘not genuine’ in paragraph 25(a) of IAS 32, is not purely a probability-based assessment; and (d) amend IAS 32 to specify how an entity must consider the effects of applicable laws when classifying financial instruments as financial liabilities or equity.

The staff plan to bring recommendations on the classification of financial instruments that are subject to shareholders’ discretion and whether additional disclosures would be beneficial at a future meeting.

Maintenance and Consistent Application

Lease Liability In A Sale and Leaseback: At this meeting the staff recommend how to proceed with ED/2020/4 Lease Liability in a Sale and Leaseback (Proposed amendments to IFRS 16). The staff recommend retaining the following proposals: clarify that the leaseback liability is a liability to which IFRS 16 applies; not change the initial measurement requirements in paragraph 100(a) of IFRS 16 for the right-of-use asset and the gain or loss arising from the sale and leaseback; clarify that a seller-lessee subsequently measures the right-of-use asset arising from the leaseback applying paragraphs 29-35 of IFRS 16; and include an illustrative example of a sale and leaseback transaction with variable payments. The staff recommend changing the following aspects of the proposals: no longer prescribe how a seller-lessee determines the proportion of the previous carrying amount of the asset that relates to the right of use the seller-lessee retains; require the seller-lessee to subsequently measure the leaseback liability applying paragraphs 36-46 of IFRS 16; and specify that the term ‘lease payments’ may not be as defined in Appendix A to IFRS 16. Instead, the seller-lessee would apply the term ‘lease payments’ or ‘revised lease payments’ in such a manner that it does not recognise any amount of the gain or loss that relates to the right of use retained to the extent that the right of use is retained.

Economic Benefits from Use of a Windfarm (IFRS 16)—Finalisation of Agenda Decision: The Board will be asked if any Board members object to the finalisation of the agenda decision.

Business Combinations under Common Control

The Board published its Discussion Paper (DP) Business Combinations under Common Control (BCUCC) in November 2020, with a comment letter deadline of 1 September 2021. The purpose of this meeting is to provide the Board with an overview of feedback on the DP and detailed summaries of feedback on selected topics from the DP. The Board will not be asked to make decisions in this session.

Almost all respondents agree that the project should cover the receiving entity’s reporting for all transfers of businesses under common control. Most respondents agree with the preliminary view that neither the acquisition method nor a book-value method should be applied to all BCUCCs. Some respondents (including most respondents from China) disagree and say a book-value method should be applied to all BCUCCs. A few respondents report mixed views within their organisation/jurisdiction or do not express a clear view.

Third Agenda Consultation

The staff recommend proceeding with the criteria as proposed in the Request for Information (RFI) for evaluating potential projects: its importance to investors; whether there is any deficiency how the matter is reported; the type of entities it is likely to affect or whether it is more prevalent in some jurisdictions than others; how pervasive or acute the matter is likely to be; interaction with other projects; the complexity and feasibility of the potential project and its solutions; and whether the Board and its stakeholders have capacity and could make timely progress.

Primary Financial Statements

The staff recommend the Board proceed with a definition for unusual items, removing the reference to ‘limited predictive value’, developing application guidance which clarifies that the definition captures income or expenses that are dissimilar in type or amount from income or expenses expected in the future and explain that in considering whether income or expenses are similar, an entity would consider characteristics of the income and expenses, including the underlying event or transaction.

The staff recommend retaining the proposal to classify in the investing category: income and expenses from assets that generate returns individually and largely independently of other resources; adding further application guidance; and income and expenses from associates and joint ventures. The staff also recommend retaining the label ‘investing category’ and not continuing with the proposal to define ‘income and expense from investments’.

Second Comprehensive Review of the IFRS for SMEs Standard

The staff are recommending that IFRS for SMEs be amended to make it more closely aligned with IFRS 3, IFRS 10 (but not investment entities) and IFRS 11 (but retain the IFRS for SME classifications of joint arrangements and the accounting requirements for jointly controlled entities). The Board will discuss whether and how to align the IFRS for SMEs Standard with the impairment requirements in IFRS 9. The staff recommend adding the definition of a financial guarantee contract from IFRS 9. The summaries (and staff papers) list the amendments they recommend that the Board should and should not incorporate into IFRS for SMEs, as well as other narrower amendments the Board should make.

Rate-regulated Activities

The staff is developing a plan for redeliberating ED/2021/1 Regulatory Assets and Regulatory Liabilities. The staff recommend prioritising total allowed compensation (returns on assets not yet available for use and regulatory assets and regulatory liabilities arising from differences between assets’ regulatory recovery pace and their useful lives) and scope (including interaction of the proposals with IFRIC 12). These are topics about which respondents raised significant concerns.

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

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IASB finalises narrow-scope amendment to IFRS 17

09 Dec 2021

The International Accounting Standards Board (IASB) has published 'Initial Application of IFRS 17 and IFRS 9 — Comparative Information (Amendment to IFRS 17)' with an amendment that enables companies to improve the usefulness of the comparative information presented on initial application of IFRS 17 and IFRS 9.



Many insurance companies have not yet applied IFRS 9 Financial Instruments and will first apply it at the same time they apply IFRS 17 Insurance Contracts. However, the two standards have different requirements for the comparative information that will be presented on initial application. IFRS 17 requires companies to present one restated comparative period. IFRS 9 permits but does not require restatement of comparative periods, and prohibits companies from applying IFRS 9 to financial assets derecognised in the comparative period.

Some insurers have since raised concerns about the usefulness of the information that would be presented for financial assets in the comparative period on initial application of IFRS 17. They are of the view that such information would be misleading because it would include accounting mismatches that would essentially arise from the continued application of IAS 39 (i.e. would not represent economic mismatches), which would be very difficult to explain. These insurers asked the Board to allow them to present significantly improved information about financial instruments that would result from applying the classification requirements of IFRS 9 at the transition date of IFRS 17.

In July 2021, the IASB published proposed amendments to IFRS 17 to address these concerns and the amendments have now been finalised.


Key amendment

The main amendment in Initial Application of IFRS 17 and IFRS 9 — Comparative Information (Amendment to IFRS 17) is a narrow-scope amendment to the transition requirements of IFRS 17 for entities that first apply IFRS 17 and IFRS 9 at the same time. The amendment regards financial assets for which comparative information is presented on initial application of IFRS 17 and IFRS 9, but where this information has not been restated for IFRS 9. Under the amendment, an entity is permitted to present comparative information about a financial asset as if the classification and measurement requirements of IFRS 9 had been applied to that financial asset before. The option is available on an instrument-by-instrument basis. In applying the classification overlay to a financial asset, an entity is not required to apply the impairment requirements of IFRS 9.

There are no changes to the transition requirements in IFRS 9.


Effective date

An entity that elects to apply the amendment applies it when it first applies IFRS 17.


Additional information

The following additional information is available on the IASB website and on IAS Plus:


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EFRAG briefing on proposed new reduced disclosure IFRS

09 Dec 2021

The Secretariat of the European Financial Reporting Advisory Group (EFRAG) has published a briefing paper as part of the EFRAG strategy to stimulate debate on the IASB's proposals that would permit eligible subsidiaries that are small and medium-sized entities (SMEs) to apply IFRSs but with reduced disclosure requirements.

For the briefing paper, the EFRAG Secretariat has considered how the IASB's proposals might be applied in the EU. More specifically, the EFRAG Secretariat provides an EU Perspective on the IASB's proposed scope for subsidiaries without public accountability.

Please click to access the briefing paper through the press release on the EFRAG website.

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IASB Chair discusses the future for IFRS Accounting Standards

07 Dec 2021

On 7 December 2021, IASB Chair Andreas Barckow spoke to delegates at the AICPA and CIMA Conference on Current SEC and PCAOB Developments in Washington D.C. In his speech, Mr Barckow focused on sustainability, IASB’s current and future priorities, and convergence with FASB.

Specifically, Mr Barckow discussed:

  • Sustainability-related financial disclosures — He noted that sustainability has become a mainstream topic amongst board of directors and within financial reporting. He cited the creation of the International Sustainability Standards Board (ISSB) which was developed to create a global baseline of investor-focused, sustainability-related disclosure standards. In addition, he stated that the ISSB and the IASB will work independently of each other, but the 'connectivity between accounting requirements and sustainability disclosure requirements is essential'.
  • Current work programme and future direction — He highlighted three key projects the IASB is working on: (1) primary financial statements, (2) post-implementation reviews for the IASB’s consolidation Standards (IFRS 10, 11, and 12) and financial instruments Standard (IFRS 9), and (3) goodwill and impairment.
  • Agenda consultation and future work programme — He mentioned that the staff is in review of the feedback received from the IASB’s latest agenda consultation. Some themes that have emerged from the feedback so far are ‘be mindful how much change you impose on stakeholders; reserve time for working with the new ISSB as well as on emerging issues; and do something on intangibles’. New projects suggested by stakeholders include climate related risk, cryptocurrencies and related transactions, going concern, intangible assets and the statement of cash flows. Some of these projects may be handled by the ISSB, while others may be worked on jointly.
  • Convergence — He noted that having converged Standards and keeping Standards converged with the FASB are two different challenges; however, it is important to continue to keep the two Boards (IASB and FASB) informed on important issues and work together to the benefit of stakeholders.

See the full transcript on the IASB’s website.

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