At the beginning of August, the EU’s AI act – the world’s first comprehensive regulation on artificial intelligence – came into force, a European Commission news release said.
The European Artificial Intelligence Act (AI Act) is “designed to ensure that AI developed and used in the EU is trustworthy, with safeguards to protect people’s fundamental rights”, the release said. “Member States have until 2 August 2025 to designate national competent authorities, who will oversee the application of the rules for AI systems and carry out market surveillance activities.”
Systems identified as minimal risk face no obligations under the AI Act; high-risk systems will be required to comply with strict requirements, including risk-mitigation systems; and AI systems considered a clear threat to the fundamental rights of people will be banned.
The AI Act also introduces rules for so-called “general-purpose” AI models, which are highly capable AI models that are designed to perform a wide variety of tasks like generating human-like text, the release said.
“Companies not complying with the rules will be fined,” the release said. “Fines could go up to 7% of the global annual turnover for violations of banned AI applications, up to 3% for violations of other obligations, and up to 1.5% for supplying incorrect information.”
The majority of rules of the AI Act will start applying on 2 August 2026, the release said. However, prohibitions of AI systems deemed to present an “unacceptable risk” will already apply after six months, while the rules for general-purpose AI models will apply after 12 months.
IPSASB proposes limited-scope updates to accrual-basis standard
The International Public Sector Accounting Standards Board (IPSASB) published an exposure draft detailing proposed amendments to IPSAS 33, First-Time Adoption of Accrual Basis International Public Sector Accounting Standards, which is open for comment, a news release said.
“The proposals in the limited-scope update project do not propose to change the objective, scope, or available exemptions in IPSAS 33,” the release said. The amendments aim to make it easier to apply and to encourage first-time adopters to comply with IPSAS in a planned way as soon as possible.
Stakeholder concerns, which informed the proposed amendments, include:
- IPSAS 33 should be more user-friendly when applied as part of the entity’s broader transition journey;
- Reliefs should be more clearly set in the entire transition process to accrual-basis IPSAS; and
- Reliefs should be designed to encourage the recognition and measurement of items, contributing to compliance as early as possible.
FRC launches discussion paper on digital reporting
A discussion paper, launched by the UK Financial Reporting Council (FRC), addresses changes in the regulatory landscape and considers the impact of the recently passed Economic Crime and Corporate Transparency Act 2023, a news release said.
According to the release, key topics include:
- Potential alternatives to the European Single Electronic Format taxonomy for UK-regulated markets;
- Proposed changes to structured digital reporting to support regulatory disclosure initiatives;
- Considerations for mandatory assurance of digital tagging;
- The impact of “full tagging” requirements on companies and charities; and
- Strategies to support stakeholders in adapting to new digital reporting requirements.
The paper seeks input from a wide range of stakeholders, including preparers of financial reports, investors, software vendors, accountants, and regulators, the release said. “It aims to help shape the future of digital reporting in the UK, ensuring it meets the needs of all users while promoting transparency, comparability, and efficiency in corporate reporting.”
Comments are requested by 1 November and can be submitted by email to XBRL@frc.org.uk.
FCA looks to improve UK pension schemes
The UK Financial Conduct Authority (FCA), the UK Department for Work and Pensions (DWP), and the Pensions Regulator’s (TPR) new proposed framework for contribution schemes aims to shift the focus from costs to long-term value and, ultimately, deliver better retirement savings, a news release said.
“The joint framework would be used by pension providers and those making decisions on behalf of savers to provide greater transparency over how schemes are performing,” the release said. “Poorly performing schemes will be required to improve or ultimately protect savers by transferring them to better schemes.”
The FCA is seeking feedback on the framework by 17 October. Responses will be shared with the government and TPR to support swift development of a consistent approach once legislation is in place, the release said.
Comments can be submitted online or by email to vfmconsultationpaper@fca.org.uk.
FRC publishes amendments to FRS 101
The regulator issued minor amendments to FRS 101, Reduced Disclosure Framework, a news release said, following an annual review.
Changes include a disclosure exemption from presenting certain comparative information, the release said, and a conditional exemption for qualifying entities in respect of certain disclosures about supplier finance arrangements required by IAS 7, Statement of Cash Flows.
Supporting documents following the amendments include a feedback statement on the changes.
EU commission releases sustainability reporting guidance
To make the EU sustainable finance framework more usable and to reduce administrative burdens for companies, the European Commission published frequently asked questions (FAQ) to guide companies in sustainability reporting, a publication said.
The FAQs consider input received from companies and cover issues such as scope, application dates, and exemptions, the publication said.
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