Welcome to the latest edition of Technical Roundup which is published on the first and third Friday of every month.
This is the first edition of Technical Roundup since its Summer Break and we have included some updates below which occurred over the Summer.
In developments since the last edition Chartered Accountants Ireland were delighted to welcome members who joined on 1 September to the Institute thereby creating the largest professional body on the island of Ireland. IAASA recently published a consultation paper to obtain stakeholders’ views on its proposal to revise the Ethical Standard for Auditors (Ireland) and the Financial Reporting Council has issued a consultation on revisions to its Guidance on the Going Concern Basis of Accounting and Related Reporting including Solvency and Liquidity Risks.
Read more on these and other developments that may be of interest to members below.
Financial Reporting
The International Accounting Standards Board (IASB) has published several updates over the summer months covering their recent activities, including
The IASB has published its review of the impairment requirements relating to financial instruments, which indicate that the requirements in IFRS 9 are working as intended and provide useful information to users of financial instruments.
The IASB is proposing amendments to its newest standard, IFRS 19 Subsidiaries without Public Accountability Disclosures, which proposes to reduce disclosure requirements for entities applying the standard. The comment period remains open until 27 November 2024.
The IASB is proposing narrow-scope amendments to IAS 21 The Effect of Changes in Foreign Exchange Rates. The comment period remains open until 22 November 2024.
The IASB is also proposing to add eight illustrative examples to illustrate how companies can apply IFRS Accounting Standards when reporting the effects of climate-related and other uncertainties in their financial statements. The comment period for these proposals remains open until 28 November 2024.
The Financial Reporting Council (FRC) has issued a consultation on revisions to its Guidance on the Going Concern Basis of Accounting and Related Reporting, including Solvency and Liquidity Risks
The European Financial Reporting Advisory Group (EFRAG) has issued its Annual Review 2023 which includes key developments for 2023 and Q1 of 2024.
The FRC has published amendments to the FRS 101 Reduced Disclosure Framework standard. There are minor amendments to the standard including a disclosure exemption from presenting certain comparative information, and a conditional exemption for qualifying entities in respect of certain disclosures about supplier finance arrangements required by IAS 7 Statement of Cash Flows.
The FRC has published thematic reviews covering offsetting in financial statements and IFRS 17 first year disclosures.
IASB Exposure Drafts
On 15th July, the IASB closed the comment period for their exposure draft ED/2024/1 Business Combinations—Disclosures, Goodwill and Impairment (Proposed amendments to IFRS 3, IAS 36). While broadly agreeing with the proposals, the Institute made some recommendations for the IASB to consider when finalising their response. EFRAG and the UK Endorsement Board (UKEB) also responded to the consultation with some recommendations.
On 7th August, the IASB closed their comment period for their exposure draft ED/2024/3 Contracts for Renewable Electricity- Proposed amendments to IFRS 9 and IFRS 7. The Institute’s Financial Reporting Technical Committee issued a response to this and noted its overall support for the project, with some areas for improvement and clarification noted. EFRAG and the UKEB also responded to the consultation with some recommendations.
IFRS 18 educational material
IFRS 18 Presentation and Disclosure in Financial Statements will become effective on 1 January 2027. Some recently published educational material in relation to this new standard includes;
- IAASA’s policy paper, which sets out some matters for preparers to consider when applying the standard
- EFRAG’s summary reports on their educational sessions held over the Summer
- The UKEB have held some outreach activities and have also conducted some surveys on the standard
Join us for some Free CPD & learn about the upcoming changes to FRS 102 on 11 September
In March, the FRC issued amendments to FRS 102 and FRS 105 as part of its second periodic review of the standards. These changes will become effective in 2025 and 2026. In order to raise awareness of the requirements set out in the amended accounting standards, the FRC will be in Dublin on the 11th September for a free, in-person event. Please join us at the event to learn more about the upcoming changes, including significant changes to lease accounting and revenue recognition.
Auditing and Assurance
IAASA has published a consultation paper on its proposal to revise the Ethical Standard for Auditors (Ireland) and the comment period remains open until 25 October. The proposed effective date for the new standard is for audits of financial statements for periods beginning on or after 15 December 2025.
IAASA has issued the July edition of its Standards Newsletter which includes updates on assurance of corporate sustainability reporting in Ireland and international developments.
The FRC has published its sixth Annual Enforcement Review (Review) which provides a summary of FRC enforcement activity for the year ending 31 March 2024.
The FRC has published its Annual Review of Audit Quality which covers the inspection and supervision results of the Tier 1 audit firms (BDO, Deloitte, EY, Forvis Mazars, KPMG, and PwC), which the FRC defines as the firms with the largest share of the UK PIE market.
International Standard on Auditing for Audits of Financial Statements of Less Complex Entities (ISA for LCE).
IAASB has published new supplemental guidance on auditor reporting and new supplemental guidance which has been added to the existing resources issued. The IAASB guidance includes videos, webinars, and other guidance.
Sustainability
On 5 July 2024 Minister for Enterprise, Trade and Employment, Peter Burke TD signed into law the Statutory Instrument giving effect to the provisions of the Corporate Sustainability Reporting Directive (CSRD).
This legislation was signed just before the passing of the 18-month period whereby EU Member States had to have the CSRD enacted locally. While Ireland made this deadline, not all European countries did. You can keep track of the status of the CSRD transposition across Europe using Ropes & Gray’s CSRD Transposition Tracker.
On 7 August IAASA issued a letter to Audit Committee Chairs highlighting their responsibility for the process of preparing sustainability reports as well as for monitoring the assurance process. It also highlights IAASA’s expectation that compliance with these requirements may significantly impact the annual reporting timelines.
On 30 August, EFRAG published its XBRL Taxonomy for ESRS Set 1, which enables the digital tagging of ESRS statements. In addition, EFRAG has published the XBRL Taxonomy for Article 8 disclosures. The digital taxonomies enable the marking up ('tagging') of sustainability reporting in machine-readable XBRL format.
Over the Summer, the Global Reporting Initiative (GRI) issued some interesting publications, including;
EFRAG’s ESRS Q&A platform continues to provide a useful source of information regarding the ESRS standards. The platform is regularly updated with new questions and explanations.
On 5 July 2024 the European Securities and Markets Authority (ESMA) published: a Final Report on the “Guidelines on Enforcement of Sustainability Information” (GLESI), and a Public Statement on the first application of the European Sustainability Reporting Standards (ESRS).
Over the Summer, the EFRAG have released a connectivity project initial paper entitled “Connectivity considerations and boundaries of different Annual Report sections”
The Ecodesign for Sustainable Products Regulation establishing a framework for the setting of ecodesign requirements for sustainable products was published on 28 June 2024 and entered into force on 18 July 2024. It expands the scope of and replaces the current Ecodesign Directive (which applies to the energy efficiency of energy using products). Please click the Dept. of Enterprise Trade and Employment link to find out more about the main features of the legislation which include putting a stop to the destruction of unsold consumer goods and promoting and procuring more sustainable products.
Sanctions and anti-money laundering
The Internet Organised Crime Threat Assessment (IOCTA) issued its annual assessment in July 2024. The report highlights relevant trends in crime areas such as cyber-attacks, child sexual exploitation and online and payment fraud schemes.
Charities news
The Charities (Amendment) Act 2024 was enacted in July 2024 and commencement of the legislation is awaited. Anyone who deals with a charity will benefit from reading Mason Hayes & Curran LLP article which deals with a selection of the new features of the 2024 Act. See in particular a useful paragraph on financial reporting requirements. The link to the Mason Hayes & Curran LLP article is here.
Also on the charities front, the Irish Charities Regulator has published a newsletter in recent weeks. Charities Regulator News Issue 29 (newsweaver.com). It contains a link to their Annual Report 2023, a very useful article and checklist for a charity which may be selling a property some information on the new Charities (Amendment) Act 2024 and an article on Charity reserves and why they matter.
Dept. of Enterprise Trade and Employment news
Increase in Company law thresholds come into force
The European Union (Adjustments of Size Criteria for Certain Companies and Groups) Regulations 2024 (S.I. No. 301 of 2024) were signed into law on the 19 June and came into operation on the 1 July 2024. The Regulations transpose delegated Directive 2023/2775/EU . The purpose of the Regulations and the Directive is to adjust company size thresholds in line with 25 per cent inflation, thereby reducing the regulatory and administrative burden on some companies, which would otherwise become subject to audit and additional financial reporting requirements. In October 2023 the Institute, as part of the Consultative Committee of Accountancy Bodies -Ireland responded to the European Commission request for feedback on adjusting SME size criteria for inflation .
Please see an Institute news item of June 24, 2024 on Increased size limits for Irish companies signed into law and click for the Dept. of Enterprise Trade and Employment (DETE) announcement referred to in the news item. Please click for a link to the page in the Institute’s technical hub dedicated to details of company law thresholds.
Employment (Collective Redundancies and Miscellaneous Provisions) and Companies (Amendment) Act 2024
Readers may recall a news item in our last edition of round up that this legislation had been passed and readers were given a link to an Institute guide on the company law changes. The Act was commenced in its entirety on 1 July 2024.
Draft company/business law legislation has been brought forward by DETE recently
Companies (Corporate Governance, Enforcement and Regulatory Provisions) Bill 2024
The General Scheme of the Companies (Corporate Governance, Enforcement and Regulatory Provisions) Bill 2024 was published by DETE in March 2024. Readers can click here for our news item on provisions which might be of interest to members. By way of update readers should note that in July 2024 DETE published the Companies (Corporate Governance, Enforcement and Regulatory Provisions) Bill 2024 (“the Bill”). The Bill includes substantially all the provisions of the General Scheme though it is worth noting that some of the provisions contained in the General Scheme in relation to the Corporate Enforcement Authority (CEA) are not included in the Bill. Click here to see the update on the proposed changes to Irish company law which we published in August 2024.
Registration of Limited Partnerships and Business Names Bill (General Scheme)
The heads of the General Scheme of the Registration of Limited Partnerships and Business Names Bill 2024 was published in July 2024. The General Scheme is accompanied by a Regulatory Impact Analysis. The General Scheme proposes to repeal and replace the Limited Partnerships Act 1907 and the Registration of Business Names Act 1963. Subsequently, in August 2024 government approval was secured to commence drafting of the Miscellaneous Provisions (Registration of Limited Partnerships and Business Names) Bill. The proposed Bill would repeal and replace the Limited Partnerships Act 1907 and the Registration of Business Names Act 1963. Both Acts require updating to provide for modern business practices for those engaged in business using a business name or the limited partnership model. Please click here for an article by law firm Pinsent Masons LLP, an article by law firm Addleshaw Goddard LLP and an article by KPMG Law LLP on the proposals.
National Enterprise Hub
On 10 July the Minister for Enterprise, Trade and Employment, Peter Burke TD, launched the National Enterprise Hub which brings together information and resources on over 180 government supports. It is a free service which will make it easier for entrepreneurs to access and avail of grants funding and expert advice across a range of sectors. The hub brings together information and resources on over 180 government supports from 19 different departments and state agencies which can be accessed through the new online hub (www.neh.gov.ie). Please click here for an article by Ogier LLP on the launch of the hub.
Pensions Authority
The Pensions Authority published 3 publications during the summer which might be of interest. The first is Investment strategy (liquidity risk) guidance for trustees. The next is a link to the launch of the IAPF’s (which represents pension savers) Cost Transparency Standard (CTS).The third is an information note on the Digital Operational Resilience Act (DORA).
Digital resilience - DORA and NIS-2
In August 2024 the Department of the Environment, Climate and Communications published the General Scheme of the National Cyber Security Bill 2024. The Bill, when passed, will implement EU Directive 2022/2555, Network and Information Security Directive known as NIS 2. The directive must be brought into effect by member states by 18 October 2024. When implemented, in-scope entities will have imposed on them a significantly increased cybersecurity preparedness and incident reporting regime. Click to read some further information from the Dept. on the general scheme including the categories of “essential “and “important “entities (which includes for example sectors such as transport, pharmaceutical and healthcare ) and cybersecurity risk management.
The three European Supervisory Authorities (EBA, EIOPA and ESMA – the ESAs) will establish the EU systemic cyber incident coordination framework in the context of the Digital Operational Resilience Act (DORA), that will facilitate an effective financial sector response to a cyber incident that poses a risk to financial stability by strengthening the coordination among financial authorities and other relevant bodies in the European Union.
Other
On 1 September Chartered Accountants Ireland and CPA Ireland commenced operations as one Institute under Chartered Accountants Ireland. CPA Ireland members, students, staff and services have been incorporated into those of Chartered Accountants Ireland creating the largest professional body on the island of Ireland.
On 11 July The Central Bank of Ireland published the independent review of its Fitness and Probity (F&P) regime. The review was undertaken by Mr Andrea Enria the former Chair of ECB Supervisory Board.
The Corporate Enforcement Authority has this week published its September newsletter which provides an overview of the CEA’s activities in recent months. This includes information about the CEA annual report, enforcement activities, company law developments and a reminder about its upcoming annual conference on 17 October 2024. You can sign up here to receive the CEA newsletter directly to your mailbox.
Readers, in particular employers, may find useful A &L Goodbody thoughts and insights after 18 months of the new whistleblowing regime | A&L Goodbody LLP (algoodbody.com) which was published during the summer. It is written 18 months after Ireland transposed the EU Whistleblowing Directive through the Protected Disclosures (Amendment) Act 2022 (“2022 Act”). It notes, for example, a substantial increase in the number of whistleblowing claims and discusses the question most frequently asked by its international employer clients. This is whether the employer can retain its centralised reporting channel at parent company level with the introduction of the 2022 Act or whether each legal entity in a group must have its own internal reporting channels and procedures. Readers are also reminded of the Institute resources in this area. The Institute pages on protected disclosures on the technical hub have a large volume of information and resources available on this topic.
In July 2024, the Irish Dept. of Finance published the Finance (Provision of Access to Cash Infrastructure) Bill 2024. The Bill aims to ensure that sufficient and effective access to cash is available in Ireland, and that any further evolution of the cash infrastructure will be managed in a fair, orderly, transparent and equitable manner for all stakeholders. Click here for the Dept. press release and text of the draft legislation.
The text of the EU Artificial Intelligence (AI) Act was published during the summer. You can click for the text of Regulation 2024/1689. The AI Act became law on 1 August 2024 and the various parts of the legislation come into effect in the coming years. Please click the link to access a European Commission page on the AI Act.
IFAC, the International Federation of Accountants has published a Professional Accountancy Organisation (PAO) Strategy Planning Toolkit which is designed to equip PAOs to develop their strategic plans and develop their operating models.
This information is provided as resources and information only and nothing in the information purports to provide professional advice or definitive legal interpretation(s) or opinion(s) on the applicable legislation or legal or other matters referred to in the information. If the reader is in doubt on any matter in this complex area further legal or other advice must be obtained. While every reasonable care has been taken by the Institute in the preparation of the information we do not guarantee the accuracy or veracity of any resource, guidance, information or opinion, or the appropriateness, suitability or applicability of any practice or procedure contained therein. The Institute is not responsible for any errors or omissions or for the results obtained from the use of the resources or information contained herein.