IASB amends income taxes standard in accordance with OECD reforms

IFAC issues sustainability-related disclosure guidance for audit committees; the IASB issues disclosure requirements to increase transparency of companies’ supplier finance.

The IASB issued amendments to IAS 12, Income Taxes, a news release said. The amendments provide companies temporary relief from accounting for deferred taxes arising from the Organisation for Economic Co-operation and Development's (OECD's) international tax reform.

According to the release, the amendments will introduce:

  • A temporary exception from accounting for deferred taxes arising from jurisdictions implementing the global tax rules. This will help to ensure consistency in the financial statements while easing into the implementation of the rules; and
  • Targeted disclosure requirements to help investors better understand a company's exposure to income taxes arising from the reform, particularly before legislation implementing the rules is in effect.

"Companies can benefit from the temporary exception immediately but are required to provide the disclosures to investors for annual reporting periods beginning on or after 1 January 2023," the release said. Access to the updated standard in full requires an IFRS subscription.

The IASB is also considering possible amendments to the IFRS for SMEs standard in relating to the OECD reforms and plans to publish an exposure draft in the second quarter of this year.

IFAC publishes sustainability guidance for audit committees

Because many professional accountants serve on and are accountable to audit committees, a news release said, the International Federation of Accountants (IFAC) has released key questions to prepare audit committees with effective questions to ask when overseeing sustainability- and ESG-related disclosures.

According to the release, the key questions cover:

  • Roles and responsibilities across the organisation;
  • Data collection, processes, and controls;
  • What's being reported?; and
  • Audit and assurance.

"We also encourage professional accountancy organisations (PAOs) to utilise these key questions to help their members stay up to date with, and prepare for, expanding oversight responsibilities in relation to sustainability," IFAC CEO Kevin Dancey said in the release.

IASB issues requirements to make supplier finance visible for investors

The IASB issued disclosure requirements to enhance the transparency of supplier finance arrangements and their effects on a company's liabilities, cash flows, and exposure to liquidity risk — in response to concerns from investors, a news release said.

According to the release, the amendments supplement requirements already in IFRS Accounting Standards and require a company to disclose:

  • The terms and conditions;
  • The amount of the liabilities that are part of the arrangements, breaking out the amounts for which the suppliers have already received payment from the finance providers, and stating where the liabilities sit on the balance sheet;
  • Ranges of payment due dates; and
  • Liquidity risk information.

The amendments, which affect IAS 7, Statement of Cash Flows, and IFRS 7, Financial Instruments: Disclosures, will become effective for annual reporting periods beginning on or after 1 January 2024.

An IFRS subscription is required to access the document.

Department for Business & Trade opens consultation

The UK Department for Business & Trade (DBT) is seeking views on the nonfinancial reporting requirements UK companies need to comply with to produce their annual report and whether company size thresholds remain appropriate, a government publication said.

This call for evidence is the first stage of the review process, the publication said, and participation in the survey is voluntary.

"Whilst the call for evidence represents an open approach to receiving stakeholder feedback, the objective of the review process is to deliver a simplified reporting framework for UK companies," the FRC said in a news release.

FRC launches initiative to help smaller firms

The FRC announced the launch of an initiative to assist smaller firms in conducting high-quality audits in the public-interest entity (PIE) market, a news release said. The Scalebox initiative aims to promote competition and choice in the PIE audit market and support the FRC's role as an improvement regulator.

All firms currently in Tier 2 and Tier 3 are eligible to join the Scalebox, as well as firms intending to enter the PIE audit market, the release said.

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