The IASB has issued amendments to the IFRS for SMEs accounting standard — the standard for small- and medium-size entities that do not have public accountability. Changes to the standard are based on the amendments to IAS 12, Income Taxes, issued in May, according to a news release.
The amendments have resulted from the introduction of the Organisation for Economic Co-operation and Development’s (OECD) Pillar Two model rules, the release said, mentioning that they follow “urgent calls from affected stakeholders”.
The amendments:
- Provide a temporary relief from accounting for deferred taxes arising from the implementation of the Pillar Two model rules; and
- Clarify that the standard requires companies to disclose information that enables users of their financial statements to evaluate the nature and financial effect of income tax consequences of the Pillar Two legislation.
Companies can benefit from the temporary exception in this amendment immediately, the release said. They are required to provide the disclosures set out in the amendments for annual reporting periods beginning on or after 1 January 2023.
An IFRS digital or IFRS digital and print subscription is required to download the revised standard.
UKEB publishes climate-related research
The UK Endorsement Board (UKEB) has published two reports in accordance with its research project to obtain insight on UK companies’ existing experience of reporting on climate-related matters and the connectivity between sustainability reporting and financial reporting, a UKEB publication said.
The reports, according to a news release from the UK Financial Reporting Council (FRC), include third-party research and investor perspective.
- Climate-Related Matters: Summary of Connectivity Research provides an overview of recent third-party research into connectivity challenges between TCFD disclosures (a proxy for the disclosures required by IFRS S2) and the financial statements.
- The second report, A Study in Connectivity: Analysis of 2022 UK Company Annual Reports, provides a deep-dive analysis from an investor’s perspective of potential connectivity challenges and includes stakeholder feedback on possible causes.
The board is also seeking views on how the accounting for, and reporting of, intangible assets could be improved to provide users of financial statements, such as investors, with more useful information to help them make better informed decisions, the FRC announced in another news release.
The survey takes around 20 minutes to complete, the release said. Stakeholder comments are welcome until 15 October.
UK, New Zealand formalise auditor reciprocity
The UK and New Zealand (NZ) have signed a first-of-its-kind agreement to recognise audit qualifications in both the UK and NZ so that auditors can more easily work between the countries, an FRC news release said.
The Memorandum of Understanding on Reciprocal Arrangements was signed by FRC and the NZ Financial Markets Authority — the competent audit authorities for each country — the release continued. The agreement will provide a process for auditors who have obtained professional audit qualifications in either the UK or NZ to apply for recognition of their qualification and audit rights in the other nation, the release said.
“The agreement will help to deliver a more resilient audit market in the UK and [NZ] through greater competition and choice and by enabling skilled auditors to have their qualifications recognised and so move more easily between the UK and [NZ],” the release said. “The FRC is currently exploring similar arrangements with other countries that are important markets to the UK, to further widen the audit talent pool, subject to thorough assessments of the qualifications.”
IFAC seeks insights from professional accountants
The International Federation of Accountants’ (IFAC) International Panel on Accountancy Education is surveying professional accountants to get their insights on what is needed to ensure current and future professional accountants are equipped to play their part in the sustainability discussion.
The survey takes 20 to 25 minutes to complete and is open for comments until 25 October. If you would like further opportunities to engage with IFAC, email education@ifac.org.
FRC issues draft amendments to FRS 102
The FRC has published FRED 84, Draft amendments to FRS 102: The Financial Reporting Standard applicable in the UK and Republic of Ireland: Supplier finance arrangements, a news release said. The changes are based on amendments to IAS 7 and IFRS 7 issued by the IASB.
The draft amendments introduce new disclosure requirements to provide users of financial statements with additional information about an entity’s use of supplier finance arrangements, the release said, and the effect of such arrangements on the entity’s financial position and cash flows.
Comments on the proposed amendments are requested by 31 December and can be sent to ukfrs@frc.org.uk. The regulator expects to finalise the proposed amendments in the first half of 2024, alongside the amendments arising from the current periodic review of FRS 102 and other FRS standards.
Coming next year: IFRS 18
A new global standard, IFRS 18, will improve the information companies provide about their financial performance. It will give investors better information to enable better decisions, IASB Chair Andreas Barckow said at the recent World Standard-setters Conference in London.
The new standard will replace IAS 1, Presentation of Financial Statements, and is expected to be issued during the second quarter of 2024, Barckow said, adding that national standard-setters will play a vital role in supporting implementation.
“It will bring more rigour to the statement of profit or loss by requiring companies to present two new mandatory subtotals, including operating profit,” Barckow said, noting a planned 2027 effective date for the standard. “It will allow companies to include so-called management-defined performance measures should they wish to present them — with certain requirements as to how they are presented to provide transparency. And it will provide new guidance on grouping of the information it provides on ‘the face’ of the financial statements or in the notes.”
— To comment on this article or to suggest an idea for another article, contact Steph Brown at Stephanie.Brown@aicpa-cima.com.