Welcome to this week’s Technical Roundup.
In developments in recent weeks, the International Sustainability Standards Board (ISSB) is in close cooperation with the International Accounting Standards Board in developing IFRS sustainability disclosure standards; and IAASA has published Information Note ‘Applying IFRS 9 Financial Instruments – expected credit losses’ which sets out an impairment model based on an expected credit loss (ECL) model for financial instruments.
Read more on these and other developments that may be of interest to members below.
Financial Reporting
The Financial Reporting Technical Committee (FRTC) of Chartered Accountants Ireland has responded to IASB Exposure Draft ED/2021/3: Disclosure Requirements in IFRS Standards—A Pilot Approach. The Exposure Draft included some proposals intended to improve the effectiveness of disclosures in financial statements and to address ongoing concerns regarding information disclosed in financial statements (often referred to as the ‘disclosure problem’). The Exposure Draft also applied those proposals to develop proposed amendments to IFRS 13 (Fair Value Measurement) and IAS 19 (Employee Benefits). Whilst the Committee agreed with the IASB’s ongoing efforts to address the ‘disclosure problem’, the response letter from the FRTC highlights some concerns with the proposed approach outlined in the Exposure Draft.
IAASA has published Information Note ‘Applying IFRS 9 Financial Instruments – expected credit losses’ which sets out an impairment model based on an expected credit loss (ECL) model for financial instruments. The Information Note is based on observed trends in the application of IFRS 9 by banks and, in particular, since the start of the COVID-19 pandemic.
EFRAG is inviting preparers of financial statements to participate in a survey on the IASB Exposure Draft Subsidiaries without Public Accountability: Disclosures. The deadline of this survey has now been extended to 20 January 2022.
In the first podcast of 2022, IFRS Interpretations Committee Chair and Vice-Chair of the International Accounting Standards Board Sue Lloyd joined Technical Staff Member Patrina Buchanan to look back at activities to support consistent application of IFRS Accounting Standards during the last quarter of 2021. Issues discussed in this podcast include:
- Economic benefits from the use of a windfarm (IFRS 16- Leases)
- Principal vs agent in the case of a software reseller (IFRS 15- Revenue from Contracts with Customers)
- Negative low emission vehicle credits and whether a provision exists (IAS 37- Provisions, Contingent Liabilities and Contingent Assets)
- Lease liability in a sale and leaseback agreement (IFRS 16- Leases)
The December 2021 IFRS for SMEs Update has been issued.
Sustainability
The International Sustainability Standards Board (ISSB) is in close cooperation with the International Accounting Standards Board in developing IFRS sustainability disclosure standards that provide a global baseline of disclosure requirements designed to give investors transparent, high-quality, globally comparable sustainability information.
Audit
The International Auditing and Assurance Standards Board (IAASB) approved a new work plan, A Public Interest Focus in Uncertain Times, during its December 2021 meeting. Sustainability and environmental, social, and governance (ESG) assurance are a prominent addition to the new work plan with increased time and resourcing allocated to it for 2022–2023.
Insolvency
The British Government recently issued a consultation The Future of Insolvency Regulation on changes to the way the insolvency profession is regulated. This paper consults on proposals to strengthen the insolvency regulatory framework in the UK. The British Government’s preferred option is to create a Single Regulator to replace the four existing authorising bodies. The consultation closes at midnight on 24 March 2022.
Other Areas of Interest
At Accountancy Europe, they consider that 2020 and 2021 were landmarks for their SME work. They, for example, published 14 SME related publications in the period and held 11 webinars that were focused on the sector. They drew on thousands of small practitioners’ experiences to inform the EU policy debate while also providing them with practical guidance. You can keep up to date by registering for their monthly newsletter.
DETE recently opened a consultation seeking the views of stakeholders on the transposition of Directive (EU) 2021/2101 on disclosure of income tax information by certain undertakings and branches. The Directive aims to enhance corporate transparency and public scrutiny of corporate taxes paid by Multinational Enterprises (MNEs) carrying out activities in the EU. MNEs whether they are headquartered in the EU or not, with a base, subsidiary or a branch in the EU, and revenue over €750 million for each of the last two consecutive financial years, will have to disclose publicly in a specific report the income tax they pay. The Directive allows two policy options for Member States and these two options are the focus of this consultation. The deadline for submissions is 5pm on Friday, 18 February 2022.
DETE has issued its latest newsletter which includes information on a number of areas including a spotlight on skills programme on Wednesday 19th January 2022.This is fully funded by Enterprise Ireland and will help businesses create a company skills plan to identify and address their critical skills needs, build capability and achieve strategic growth.
ACCA, one of the fellow members of CCAB-I, recently announced the publication of a new guide on partnership law in Ireland. The publication is authored by Bill Holohan SC and Alan Raftery, both of Holohan Lane LLP Solicitors, and deals with all aspects of running a business through a partnership in Ireland. The booklet is free to download and deals with issues such as salaried and equity partners, binding the partnership, legal liability of partners, the dissolution of partnerships and joint and several liability.
The Pensions Authority's main source of income derives from fees levied on occupational pension schemes and trust retirement annuity contracts. This week it published revised occupational pension schemes fee rates for 2022 effective from 1 January 2022. The Authority says increased fees are necessary to meet its staffing and IT costs arising from the implementation of the EU IORP II Directive and the implementation of forward-looking risk-based supervision.
The Central Bank has reviewed the standard financial statement (SFS) used by regulated firms to gather information from distressed borrowers to assess whether they can be offered an alternative repayment arrangement. They found that it was complex and this week published a revised ,simplified SFS which must be used by all regulated firms from 1 January 2022. To assist borrowers in completing the SFS, the Central Bank has also published a Consumer Guide on the completion of the SFS aimed at enhancing borrower understanding of the SFS and how it should be completed.
In other Central Bank news this week, yesterday (13 Jan 2022) it announced a new regulatory regime for Crowdfunding Service Providers under EU Regulation. The Central Bank of Ireland has been designated the competent authority for crowdfunding regulation in Ireland. You can read further details of their press release here and you can find their Guidance Note on Completing an Application Form for Authorisation as a Crowdfunding Service Provider here.
In Phase II of its Codes of Practice consultation, the Decision Support Service has opened consultations for a second set of codes of practice as part of its preparations for the commencement of the Assisted Decision-Making (Capacity) Act 2015. Those draft codes are for independent advocates; co-decision-makers; decision-making assistants; decision-making representatives; special visitors; court friends; general visitors; and attorneys as part of an Enduring Power of Attorney (EPA). You can access the draft codes here. Feedback can be given by completing the online questionnaire or by downloading the questionnaire. The DSS asks that the draft codes be read alongside the main Code of Practice on Supporting Decision-making and Assessing Capacity. The consultation closes on 18th February 2022.
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