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IPSASB exposure draft on borrowing costs

22 Oct 2020

The International Public Sector Accounting Standards Board (IPSASB) has released an exposure draft of non-authoritative guidance on borrowing costs.

Exposure Draft 74 IPSAS 5 'Borrowing Costs' – Non-Authoritative Guidance proposes the addition of non-authoritative guidance to IPSAS 5 Borrowing Costs that consists of implementation guidance and illustrative examples to clarify how the existing principles for when borrowing costs can be capitalised should be applied in various regularly encountered public sector contexts. The exposure draft does not propose amendments to the authoritative guidance in IPSAS 5.

Comments are requested by 1 March 2021.

Please click to access the following additional information on the IPSASB website:

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Seventh IASB research forum — papers available

22 Oct 2020

The International Accounting Standards Board (IASB) will host its seventh Research Forum on 2–3 November 2020 as a virtual conference. The papers to be presented and discussed are now available on the IASB website.

The forum will see the presentation of four academic papers, followed by a responses of an academic and of an IASB/NNS representative, and two panel discussions around research opportunities related to IFRS 9 and to IFRS 15. The audience will be invited to participate in the discussions. The papers are the following (all links to the IASB website):

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IASB and EAA virtual academic research seminar on goodwill

20 Oct 2020

On 30 October 2020, the International Accounting Standards Board (IASB) and European Accounting Association (EAA) will hold a virtual research seminar for academics related to the IASB’s Discussion Paper 'Business Combinations — Disclosures, Goodwill and Impairment' and relevant academic literature.

The purpose of the session is to obtain feedback from academics on the proposals in the March 2020 DP and to discuss relevant academic evidence.

Please click for more information on the IASB website.

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October 2020 IASB meeting agenda posted

16 Oct 2020

The IASB has posted the agenda for its next meeting, which will be held via video conference on 27–29 October 2020. There are nine topics on the agenda.

The Board will discuss the following:

  • Board work plan update
  • Agenda consultation
  • Equity method of accounting
  • Taxonomy
  • Main­te­nance and con­sis­tent ap­pli­ca­tion
  • Dynamic risk management
  • Ex­trac­tive ac­tiv­i­ties
  • Disclosure initiative — subsidiaries that are SMEs
  • Management commentary

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.

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EFRAG updates Board composition

15 Oct 2020

The EFRAG General Assembly has announced that Ricardo Sanchez and Sven Morich have been appointed to the Board. They have filled the vacancies that occurred when Karin Dohm and Andreas Barckow have stepped down. In addition, Hans Buysse has been appointed as EFRAG Board Vice-President.

Further, the EFRAG General Assembly extended the mandate of all EFRAG Board members that was to expire on 31 October 2020 (date incorrect in press release) by six months to 30 April 2021, to allow the EFRAG Board in its current composition to finalise the endorsement advice on IFRS 17 Insurance Contracts.

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

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FRC guidance on reporting in times of uncertainty

15 Oct 2020

The Financial Reporting Lab of the UK Financial Reporting Council (FRC) has released guidance covering some critical areas of focus for 2020 year-ends.

In view of COVID-19, many companies are facing a challenging year-end. While the uncertainty creates risks for annual reporting it also presents opportunities. The two new guides look at key elements in respect of resources, action, and the future and in respect of going concern, risk, and viability. Both guides:

  • summarise key messages from earlier reports;
  • provide an update on recent developments in corporate reporting;
  • offer some thoughts regarding how corporate reporting can develop; and
  • contain practical examples from reports and presentations released by companies.

Please click to access COVID-19: Resources, action, the future - a look forward and COVID 19: Going concern, risk, and viability - a look forward on the FRC website.

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Short video on the Trustee's sustainability reporting consultation

15 Oct 2020

The IFRS Foundation has released a short video with the Chair of the Trustees Erkki Liikanen explaining why the Trustees are consulting on sustainability reporting and what questions they are asking.

The Trustee's published the consultation paper on 30 September 2020. Comments are requested by 31 December 2020.

Please click to access the video (just over three minutes long) on YouTube.

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IFRS Foundation publishes third compilation of IFRS Interpretations Committee agenda decisions

14 Oct 2020

The IFRS Foundation has issued, “Compilation of Agenda Decisions — Volume 3” which contains all the agenda decisions made by the IFRS Interpretations Committee from April 2020 to September 2020.

The IFRS Foun­da­tion initiated the new com­pi­la­tion series in October 2019 and will continue it by pub­lish­ing new volumes bian­nu­ally in April and October. For more in­for­ma­tion, see the press release and com­pi­la­tion on the IASB website.

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Recent sustainability reporting developments

13 Oct 2020

A summary of recent developments at CDSB, TNFD, GRI/SASB, GRI, PRI, in New Zealand and Hong Kong, at AccountAbility, IAASB and CAQ.

In addition to the recent major developments at the European Commission, CFA Institute, five ESG standard-setters, the World Economic Forum, and the IFRS Foundation Trustees, the following smaller developments occurred recently:

  • The Climate Disclosure Standards Board (CDSB) released CDSB Framework application guidance for climate-related disclosure. The release is the first in a series of guides on nature-related financial disclosure, with water guidance to follow early next year. Please click for more information on the CDSB website.
  • The CDSB also offers free consultation on climate-related reporting for EU businesses. See here for more information.
  • Efforts are underway to create a Task Force for Nature-related Financial Disclosures (TNFD). An Informal Working Group has been founded that will lead to the creation of the TNFD itself in 2021. Establishing a reporting framework for finance sector impacts and dependencies on nature is seen as critical for halting biodiversity and ecosystem loss. A TNFD website is already available.
  • Following the launch of a collaborative workplan between the Global reporting Initiative (GRI) and the Sustainability Accounting Standards Board (SASB), the standard-setters are working together to develop materials that show how the two sets of reporting standards can be used together. As a next stage in the collaboration, a joint survey has been launched to help understand current experiences by organisations that use either or both sets of standards for their sustainability reporting. Please click for more information on the GRI website.
  • Also, a recent GRI public opinion poll on social and environmental corporate performance revealed rising trust in sustainability reporting around the world. Please see the GRI website for more information.
  • Principles for Responsible Investment (PRI) has published a call by investor groups on companies to reflect climate-related risks in financial reporting. They stress the investor view that climate-related risks are material factors that should be reflected appropriately in financial statements. More information is available on the PRI website.
  • New Zealand will implement mandatory climate risk reporting in line with the TCFD recommendations, becoming the first country to do so. Please see the press release of the New Zealand government for more information.
  • The Hong Kong Money Authority (HKMA) recently set out a supervisory approach designed to ensure banks build resilience to climate-related risk. In terms of disclosures and data, HKMA notes that supervised financial institutions should take the TCFD recommendations into account while developing an ‘appropriate’ approach to disclosing climate-related risk that enhances transparency. More information is available in the corresponding HKMA White Paper.
  • AccountAbility announces three developments:
    • German and simplified Chinese translations of the AA1000 AccountAbility Principles (press release)
    • Spanish, Portuguese, and Bahasa Indonesian translations of the AA1000 AccountAbility Principles (press release)
    • Latest guidance on sustainability assurance (press release)
  • The International Auditing and Assurance Standards Board (IAASB) has issued a Staff Audit Practice Alert The Consideration of Climate-Related Risks in an Audit of Financial Statement. The Staff Audit Practice Alert assists auditors in understanding what already exists in the International Standards on Auditing (ISA) today and how it relates to auditors’ considerations of climate-related risks in an audit of financial statements. Please click for more information on the IAASB website.
  • The Center for Audit Quality (CAQ) released a new report that finds external auditors can contribute to the reliability and comparability of non-GAAP financial measures and KPIs – information found outside of the audited financial statements. Please see the CAQ website for more more information.
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Survey of accounting for intangibles by SMEs

13 Oct 2020

The European Federation of Accountants and Auditors for SMEs (EFAA) has published the results of a survey that examined the extent of harmonisation of the accounting for intangibles by SMEs across Europe.

Intangible assets are often, and increasingly, the primary drivers of the value of a company. While there is significant European Union regulation governing how publicly accountable companies report intangible assets in their financial statements, the accounting directive has no explicit regulations for SME companies except for the accounting for goodwill. Therefore, EFAA carried out a study to gain insights into the accounting treatment of intangible assets across jurisdiction of EFAA member bodies.

The objectives of the study were: 

  • To determine the applicable regulatory framework for accounting for intangible assets in each jurisdiction;
  • to compare these frameworks;
  • to establish whether there are incentives that influence the acquisition and valuation of intangible assets; and
  • to inform the current debate on intangible assets in Europe.

Not surprisingly, the study revealed that there are significant variations between jurisdictions in Europe when it comes to the accounting treatment of intangibles by SMEs and, consequently, users of SME financial statements need to be alert to the lack of comparability of information on intangibles.

Please click to access The Financial Reporting of Intangibles by SMEs in Europe on the EFAA website.

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