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Forum of Firms Update

18th May 2022

MGI World MGI IFRS Group Blog

The IFRS Blog is a series of topical issues, common issues and live cases in IFRS Standards and financial reporting.

Forum of Firms Update by Jane Lowden, F. W. Smith, Riches & Co., London

In March 2022 I attended a Forum of Firms meeting in London on behalf of MGI Worldwide. The meeting included updates from International Accounting Standards Board, International Ethical Standards Board and International Auditing & Assurance Standards Boards, as well as the newly formed International Sustainability Standards Board.

I have summarised below the key updates from the International Accounting Standards Board.

New IFRS requirements

The following new and amended standards will be required to be adopted:

Effective Date

Requirement

1 January 2022
  • Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16)
  • Reference to the Conceptual Framework (Amendments to IFRS 3)
  • Onerous Contracts – Cost of Fulfilling a Contract (Amendments to IAS 37)
  • Annual Improvements to IFRS Standards 2018 – 2020
1 January 2023
  • IFRS 17 Insurance Contracts
  • Definition of Accounting Estimates
  • Disclosure of Accounting Policies
  • Deferred Tax relating to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12)
1 January 2024
  • Classification of Liabilities as Current or Non-current (Amendments to IAS 1)

Current IASB standard setting projects

Primary financial statements

The IASB published an Exposure Draft in December 2019 with the objective of improving communication in financial statements, with focus on information included in the profit and loss account.

The main proposals include a requirement to disclose additional defined subtotals in the profit and loss account; to strengthen requirements for disaggregating information; and to require disclosures about management performance measures.

The IASB is currently discussing whether entities should be required to disclose an analysis of operating expenses by nature in the notes where the entity has reported its operating expenses by function in the profit and loss account.

The next project milestone will be to issue the IFRS Accounting Standard.

Rate-regulated activities

The IASB published an Exposure Draft in January 2021 to set out proposals for a model to account for regulatory assets and regulatory liabilities. This would replace IFRS 14 Regulatory Deferral Accounts.

The IASB is currently considering specific topics relating to determining whether a regulatory agreement is within the scope of the proposals and the definition of a regulator.

The next project milestone will be to issue the IFRS Accounting Standard.

Exposure Draft updates

Disclosure initiative – targeted standards-level review of disclosures

An Exposure Draft was published in March 2021 proposing a new approach to developing and drafting disclosure requirements in IFRS Accounting Standards, together with new disclosure requirements for IFRS 13 Fair Value Measurement and IAS 19 Employee Benefits. The comment period ended in January 2022 and the IASB have met to discuss the feedback.

Financial instruments with characteristics of equity

This exposure draft will amend IAS 32 Financial Instruments: Presentation to address common accounting challenges and will aim to improve the information that entities provide in their financial statements about financial instruments that they have issued.

Second comprehensive review of the IFRS for SMEs Accounting Standard

An Exposure Draft is expected to be published in the third quarter of 2022 concerning the alignment of the IFRS for SMEs with new requirements in IFRS Accounting Standards.

MGI Worldwide's Global IFRS specialist have the benefit of continuing day-to-day experience in IFRS. This means that we can bring practical knowledge to IFRS questions raised and help to apply the sometimes complex regulations in a way that minimises the risk of audit adjustments or the detection of accounting errors by national regulators.

If you have any questions relating to these updates or any other aspects of how IFRS may affect your business, please contact a member of the MGI Worldwide CPAAI IFRS Specialist Group or Nicki Lynn, International Business Development Manager nicki.lynn@mgiworld.com.

MGI Worldwide with CPAAI, is a top 20 ranked global accounting network and association with almost 9,000 professionals, accountants and tax experts in some 400 locations in over 100 countries around the world. 

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