The IASB issued amendments to IFRS 9, Financial Instruments, to make the requirements of the standard more understandable and consistent, a news release said. The board also introduced additional disclosure requirements to enhance transparency for investors.
These amendments respond to stakeholder concerns around clarity in some areas of the requirements and address new issues that have emerged since IFRS 9 was issued.
According to the release, these areas include:
- Clarifying the classification of financial assets with environmental, social, and corporate governance (ESG) and similar features: “ESG-linked features in loans could affect whether the loans are measured at amortised cost or fair value. To resolve any potential diversity in practice, the amendments clarify how the contractual cash flows on such loans should be assessed.”
- Settlement of liabilities through electronic payment systems: “The amendments clarify the date on which a financial asset or financial liability is derecognised. The IASB also decided to develop an accounting policy option to allow a company to derecognise a financial liability before it delivers cash on the settlement date if specified criteria are met.”
The amendments can be downloaded by those with an IFRS Digital subscription and are effective for annual reporting periods beginning on or after 1 January 2026.
Sustainability consultations open across five regions
Growing global support for the ISSB standards continues as sustainability consultations open across five regions, following the publication of the ISSB’s inaugural standards in June 2023, a publication from the IFRS Foundation said.
The ISSB is not directly involved in these consultations, and all questions related to them should be addressed to the relevant organisation, the publication said. This information is provided on a “best-endeavours basis” and should not be considered as a complete list.
The regions include Brazil, Canada, China, Japan, and South Korea. The consultation documents for each region are assessable through the publication.
EU net-zero act will come into force this summer
The EU set a benchmark for the manufacturing capacity of strategic net-zero technologies to meet at least 40% of the EU’s annual deployment needs by 2030, a press release said. To meet those ambitious climate targets, the EU commission welcomes the final adoption of the Net-Zero Industry Act (NZIA) to strengthen its domestic manufacturing capacities of key clean technologies.
The NZIA aims to increase the competitiveness and resilience of the EU’s industrial base to support job creation, the release said. The new regulation “improves the conditions for investment” in net-zero technologies by simplifying and accelerating permitting procedures, reducing administrative burden, and facilitating access to markets.
“Public authorities will have to consider sustainability, resilience, cybersecurity, and other qualitative criteria in procurements procedures for clean technologies and auctions for the deployment of renewable energy,” the release said. “NZIA includes measures for investment in education, training, and innovation, with the establishment of Net-Zero Industry Academies to train 100,000 workers within three years and support the mutual recognition of professional qualifications.”
The European Parliament and Council reached a provisional agreement on 6 February, and Parliament voted on the legislation on 25 April, the release said. The Council vote on Monday was the final step in the legislative process. The NZIA is expected to come into effect towards the end of June.
GRI and IFRS move to strengthen collaboration on sustainability reporting
The IFRS Foundation and the Global Reporting Initiative (GRI) aim to deepen their working relationship in response to market demand for GRI and the International Sustainability Standards Board (ISSB) standards interoperability, a news release said. This builds upon the memorandum of understanding signed by the organisations in 2022.
“The increased collaboration will optimise how GRI and ISSB standards can be used together to facilitate reporting on an organisation’s impacts, risks, and opportunities, including risks that arise from the organisation’s impacts,” the release said.
It also seeks to provide a “seamless, global, and comprehensive sustainability reporting system” for companies looking to meet the information needs of both investors and a broader range of stakeholders.
An initial outcome of the collaboration between the ISSB and the Global Sustainability Standards Board (GSSB) will involve a methodology pilot building on the recently published GRI 101, Biodiversity 2024, the release said, and the ISSB’s upcoming project on Biodiversity, Ecosystems, and Ecosystem Services.
FRC publishes standard for collective money purchase pensions
Following a consultation to ensure developments in this emerging area are proportionately reflected, the UK Financial Reporting Council (FRC) published Technical Actuarial Standard 310, Collective Money Purchase Pensions (TAS 310), a news release said. The standard aims to “maintain trust” in collective money purchase schemes.
“TAS 310 allows for the different considerations for actuarial work in relation to collective money purchase pension schemes, compared to defined benefit or defined contribution pensions,” the release said.
To maintain trust in these schemes, the regulator’s new standard will address the risks to pension scheme members, reflecting the FRC’s commitment to high-quality actuarial work as the market develops.
The standard includes requirements in relation to assumptions and modelling, as well as the provision of advice on assessments of scheme soundness, scheme valuations, and setting actuarial factors. The updated guidance on proportionality covers specific examples relevant to TAS 310.
IFAC CEO honours Melancon following retirement announcement
Barry Melancon, president and the longest-serving CEO of AICPA & CIMA, together as the Association of International Certified Professional Accountants, has been a major supporter of connecting the accounting profession globally through the International Federation of Accountants (IFAC) and an advocate for embracing digital and sustainability transformations, a news release said.
Under Melancon’s leadership, IFAC and the AICPA collaborated on numerous projects including the annual State of Play benchmarking studies that capture and analyse the extent to which companies are reporting and obtaining assurance over their sustainability disclosures.
“I’ve been fortunate in my career to have had a strong professional collaboration with Barry, and I have always been grateful to receive his counsel and partnership,” IFAC CEO Lee White said in the release. “On behalf of the profession, we thank him for his many contributions and wish him well in his upcoming retirement from AICPA & CIMA and look forward to working with him as he continues to advocate for the profession.”
— To comment on this article or to suggest an idea for another article, contact Steph Brown at Stephanie.Brown@aicpa-cima.com.
