Technical Roundup 26 March

Mar 25, 2021

Welcome to this week’s Technical Roundup. 

In developments this week, the FRC starts the next periodic review of FRS 102 and is seeking views from stakeholders; the Institute’s Accounting Committee responds to the IASB Exposure Draft ‘Lease Liability in a Sale and Leaseback (Proposed amendment to IFRS 16)’; the FRC issues a revised Practice Note 14 ‘The Audit of Housing Associations in the United Kingdom’; The IFRS Foundation Trustees announce a working group to accelerate convergence in global sustainability reporting standards focused on enterprise value; and BEIS has published a consultation seeking views on proposals to mandate climate-related financial disclosures by certain companies and LLPs.

Read more on these and other developments that may be of interest to members below.

Financial Reporting

  • The Financial Reporting Council (FRC) is starting the next periodic review of FRS 102 (and other UK and Ireland accounting standards). Part of this process is seeking views from stakeholders on areas that might be considered as part of the review. The FRC note that this might include new issues/transactions that should be addressed, or comments or suggestions in relation to the current requirements. In addition to stakeholder feedback the review will consider recent developments in financial reporting (such as changes in IFRS) and relevant developments in the wider reporting framework. Stakeholders can provide comments to the FRC on any aspect of the standards to ukfrsperiodicreview@frc.org.uk by 31 October 2021. The FRC note that any changes to accounting standards that are proposed as a result of the periodic review will be subject to public consultation at a later date, not expected to be before 2022, and that the effective date for any amendments is currently expected to be 1 January 2024. The FRC also expects to hold roundtable events for stakeholders to provide their views.
  • The Chair of the UK Endorsement Board, has announced the appointment of ten members to form the inaugural UK Endorsement Board (UKEB). The UKEB has been set up to endorse and adopt new or amended international accounting standards on behalf of the UK.
  • The International Accounting Standards Board (IASB) has published a webcast for investors summarising the Board’s consultation on reporting mergers and acquisitions between companies under common control (transfers of businesses from one company within a group to another). The Board invites investors to comment on its suggestions by completing a short investor survey, or to arrange a 1:1 interview.
  • The meeting report from the SME Implementation Group (SMEIG) meeting held on 4–5 February 2021 is now available. SMEIG, a consultative group of the IASB, supports the international adoption of the IFRS for SMEs Standard and monitors its implementation.
  • The Institute’s Accounting Committee has responded to the IASB Exposure Draft ED/2020/4: Lease Liability in a Sale and Leaseback (Proposed amendment to IFRS 16). The IASB’s proposed amendment would specify the method a seller-lessee uses in initially measuring the right-of-use asset and liability arising in a sale and leaseback transaction and how the seller-lessee subsequently measures that liability. The response is available to read here.
  • The IFRS Foundation has published the IFRS Taxonomy 2021. The IFRS Taxonomy 2021 is based on IFRS Standards as at 1 January 2021, including those issued but not yet effective. A short webcast introducing the IFRS Taxonomy 2021 is also available.
  • The March 2021 IFRIC Update is now available. IFRIC Update is a summary of the decisions reached by the IFRS Interpretations Committee in its public meetings. The Committee met on 16 March 2021.
  • EFRAG has announced that it will hold its EFRAG Board webcast meeting on Monday 29 March 2021. The agenda and public documents for the meeting, along with details on how to watch the live webcast, can be found here.

Auditing

  • The FRC has issued a revised Practice Note 14 (PN 14) (Revised March 2021) The Audit of Housing Associations in the United Kingdom. PN 14 provides sector specific guidance on applying the FRC’s auditing standards to audits of Housing Associations.
  • The Technology Working Group of the International Auditing and Assurance Standards Board (IAASB) has released non-authoritative support material to help auditors address the risk of overreliance on technology, whether it arises from using automated tools and techniques or from using information produced by an entity’s systems.
  • Following publication of the UK Government’s consultation Restoring trust in audit and corporate governance the FRC will be hosting a series of webinars and roundtables to provide further insight on key aspects of the consultation and to provide interested stakeholders with an opportunity to share their views and comment on the government’s proposals. Further details about how to participate in the FRC’s engagement programme is available here.

Sustainability / Non-Financial Reporting

  • The Trustees of the IFRS Foundation have announced the formation of a working group to accelerate convergence in global sustainability reporting standards focused on enterprise value and to undertake technical preparation for a potential international sustainability reporting standards board under the governance of the IFRS Foundation. Find out more on the work and membership of the group.
  • At its March 2021 meeting last week, the IAASB approved Non-Authoritative Guidance on Applying ISAE 3000 (Revised) to Extended External Reporting (EER) Assurance Engagements, which will be published in April. To help stakeholders understand the role of both the guidance and ISAE 3000 (Revised), the IAASB Chair has published an articleAssurance Standards keeping pace on non-financial reporting’ detailing the guidance and how it supports the application of ISAE 3000 (Revised), growing demands for non-financial information reporting and assurance thereon, and the IAASB’s ongoing commitment to the consistent performance of quality engagements.
  • The Department for Business, Energy & Industrial Strategy in the UK has published a consultation seeking views on proposals to mandate climate-related financial disclosures by publicly quoted companies, large private companies and Limited Liability Partnerships (LLPs).

 Anti-Money Laundering

  • Together with ICAEW, the International Federation of Accountants (IFAC) has released the sixth installment in its Anti-Money Laundering: The Basics educational series: Installment 6: Businesses in Difficulty. IFAC note that the publication is part of a 6-month short series helping accountants enhance their understanding of how money laundering works, the risks they face, and what they can do to mitigate these risks and make a positive contribution to the public interest. They also note that the installment series, with its focus on accessibility and ease of use, will be a resource for Small and Medium Practices, and accountants less familiar with AML, while also providing guidance for those looking for a quick refresher or reference.

Other areas of interest

  • The Charites Regulator and the Revenue Commissioners have agreed an updated cooperation arrangement. Noting the issuing of the memorandum of understanding, the Charities Regulator says that it supports cooperation and collaboration in the interest of ensuring appropriate sharing and assessment of information by both parties, and that the overarching aim of the arrangement is to uphold the integrity of charitable organisations and charitable trusts in Ireland and support public confidence in charities operating in Ireland or under Irish law.

For further technical information and updates please visit the Technical Hub and the Covid-19 Hub on the Institute website.