Financial reporting update: IFRS 17, FRC governance code review, and more

Here’s a roundup of recent developments in the financial reporting world.

IFRS 17 update for investors

The European Financial Reporting Advisory Group (EFRAG) has issued a background briefing paper on the level of aggregation requirements of IFRS 17, Insurance Contracts. The paper is the first in a series intended to provide simplified information on certain areas of IFRS 17 to enable constituents to understand the issues and be in a position to comment on EFRAG’s draft endorsement advice (currently expected in the third quarter this year). The other papers will address the release of the contractual service margin and transition requirements.

Accountancy Europe’s views on sustainable finance

Accountancy Europe, which counts CIMA as one of its member organisations, published a white paper on the topic of sustainable finance. The document notes that the financial system and professional accountants can play a key role in creating a resource-efficient, sustainable economy. The document focuses on three areas:

  • Corporate reporting to accommodate long-term horizons;
  • Disclosure requirements to address investors’ needs; and
  • Accounting frameworks to be in line with long-term investments.

UK corporate governance code review

The UK Financial Reporting Council (FRC) published its consultation on a review of the UK corporate governance code in December. The Association of International Certified Professional Accountants has responded, with an emphasis on building trust through value creation. The FRC will consider responses and publish a revised code and guidance in the summer. The intention is for the code to come into force in January 2019.

Equity instruments

EFRAG has published a discussion paper, Equity Instruments — Impairment and Recycling, to gather constituents’ views on recycling and impairment of equity instruments designated at fair value through other comprehensive income to develop its technical advice to the European Commission.

Amendments made to IFRS 2

The EU has published a Commission Regulation endorsing “Classification and Measurement of Share-based Payment Transactions (Amendments to IFRS 2)”.

David Hackett is technical policy manager at the Association of International Certified Professional Accountants.