Response 4 - ICAS

OFFICIAL - PUBLIC UKEB UK Endorsement Board

Deadline for completion of this Invitation to Comment: Close of business on Friday, 6 February 2026

Please submit to: [email protected]

UK Endorsement Board

The UK Endorsement Board (UKEB) is the UK's National Standard Setter for IFRS Accounting Standards and is, therefore, responsible for the endorsement and adoption of IFRS Accounting Standards for use in the UK. The UKEB also leads the UK's engagement with the IFRS Foundation on the development of new accounting standards, amendments and interpretations.

Objectives and Context

This consultation is a subset of the overall UKEB Regulatory Strategy (2025/28)¹ which remains unchanged. The UKEB is seeking stakeholder feedback on its Regulatory Strategy and Research topics for the 2026/27 period.

Who should respond to this Invitation to Comment?

Stakeholders with an interest in the quality of accounts prepared in accordance with IFRS Standards.

How to respond to this Invitation to Comment

Please download this document, answer any questions on which you would like to provide views, and return it to [email protected] by close of business on Friday, 6 February 2026.

Privacy and other policies

The data collected through submitting this document will be stored and processed by the UKEB. By submitting this document, you consent to the UKEB processing your data for the purposes of influencing the development of and adopting IFRS for use in the UK. For further information, please see our Privacy Statements and Notices and other Policies (e.g. Consultation Responses Policy and Data Protection Policy)².

The UKEB's policy is to publish on its website all responses to formal consultations issued by the UKEB unless the respondent explicitly requests otherwise. A standard confidentiality statement in an e-mail message will not be regarded as a request for non-disclosure. If you do not wish your signature to be published, please provide the UKEB with an unsigned version of your submission. The UKEB prefers to publish responses that do not include a personal signature. Other than the name of the organisation/individual responding, information contained in the “Your Details” document will not be published. The UKEB does not edit personal information (such as telephone numbers, postal or e-mail addresses) from any other response document submitted; therefore, only information that you wish to be published should be submitted in such responses.

Part One – Regulatory Strategy

Question One: Regulatory Strategy

Do you have any comments on the UKEB's 2026/27 (Draft) Regulatory Strategy?

Please provide your rationale and any supporting comments, as necessary. We are supportive of the UKEBʼs 2026/27 (Draft) Regulatory Strategy.

Part Two - Research topics

For background and context for the research topics included in questions one to three below, please refer to the Annex of this document.

Question One: Accounting for Intangible Assets

Do you agree with the proposed approach of the UKEB:

• continuing to develop an understanding of what information is most useful for stakeholders;
• developing potential principles-based accounting treatments; and
• considering potential connectivity issues with ISSB Sustainability Disclosure Standards

Please provide an explanation for your response as well as any alternative suggestions.

This remains an important topic in which there is considerable stakeholder interest. Additionally, we note the potential connectivity issues with ISSB Sustainability Disclosure Standards which we believe to be a key matter for consideration.

Question Two: Carbon and Other Environmental Credits

Do you agree with the proposed approach of the UKEB:

• documenting the current schemes, disclosures and approaches adopted in the UK;
• considering potential principles-based accounting treatments; and
• assessing any potential connectivity implications for the financial statements from ISSB Sustainability Disclosure Standards.

Please provide an explanation for your response as well as any alternative suggestions.

We believe this to be an important topic in which there is considerable stakeholder interest. Additionally, we note the potential connectivity issues with ISSB Sustainability Disclosure Standards which we believe to be a key matter for consideration.

Question Three: Fundamental issues or gaps with IFRS

Are there IFRS Accounting Standards that need to be developed or require fundamental revisions to ensure they continue to remain relevant in the contemporary business environment? Can you suggest a principles-based approach to address the issues you have identified?

Please provide an explanation for your response and any principles-based approaches that could address them.

We do, however, believe that connectivity issues with ISSB Sustainability Disclosure Standards is a major issue and welcome the UKEB's acknowledgement of this in its suggested approach to the research projects which it is proposing to undertake.

Question Four: Relative priority of research topics

Please indicate your view of the priority of research topics (1 Highest to 5 Lowest) considering their pervasiveness, feasibility, relevance to the UK and urgency. Please also add any alternative topics in the response box below the table.

Please provide an explanation for your rankings and a detailed description of any alternative topics.

We believe these to be the order that these issues need addressed to meet current stakeholder demands.

Question Five: Any Other Comments

The UKEB welcomes any other feedback on this overall consultation.

We have no other comments.

Question Six: Use of large language models

If you used a large language model in developing your responses, please disclose the model and the query used.

We did not use an LLM in developing this response.

Annex: Context and background for research topics

Context

1Research supports the UKEB's influencing and adoption activities and help to fulfil the Board's thought leadership guiding principle.

2The UKEB will take a problem-solving approach in relation to all research projects. Ad hoc research may relate to topics such as cost of capital, the UKEB's Post Implementation Review (PIR) of IFRS 17 Insurance Contracts or further work related to Rate Regulated Activities.

3At the Accounting Standards Advisory Forum (ASAF) meeting in October 2025, the IASB Chair noted that, in addition to the two projects currently on the IASB project reserve list (Pollutant Pricing Mechanisms and Operating Segments), the IASB had become aware that Hyperinflation and Cryptocurrencies were also urgent and high priority topics for some stakeholders. These four topics are likely to be of interest to the IASB in the near to medium term.

4As part of the IASB's Third Agenda Consultation, the UKEB conducted outreach on Operating Segments and Hyperinflation. It was concluded³ that UK stakeholders considered Operating Segments to be a low priority. They also considered that Hyperinflation was neither prevalent nor acute for UK IFRS reporters (even those with subsidiaries in inflationary economies).

5The UKEB considers that Pollutant Pricing Mechanisms (PPMs) and Intangible Assets (including Cryptocurrencies) will be of most relevance to UK stakeholders in the near to medium term.

6The UKEB has capacity to focus on two major research projects in addition to ad-hoc research requirements. Given its limited resources and the potential relevance to UK listed companies, the UKEB has decided not to undertake proactive research on either Operating Segments or Hyperinflation, at this time.

Background

Accounting for Intangible Assets (Question 1 above)

7The IASB is currently in the research phase of an Accounting for Intangibles project. It has indicated that it will undertake research through the remainder of 2025 and finalise the project direction in 2026. The UKEB sees an opportunity to support this work and to encourage the IASB to develop a principles-based approach to accounting for intangible assets.

8Intangible assets are a significant part of the UK economy and are expected to play an important role in future economic growth. Appropriate accounting plays a key role in providing decision useful information about these items to users of financial statements.

9In anticipation, the UKEB initiated its own research project focused on understanding UK stakeholders' views and gathering evidence about the UK intangibles landscape⁴, ⁵, ⁶.

10During 2026/27, the UKEB could continue to build on its 2025/26 case-study based intangibles research. New research could identify potential interactions with IFRS Sustainability Disclosure Standards in relation to climate-related opportunities. Elements of relevant ISSB research projects could also be explored with stakeholders.

11This would provide the UKEB with a body of evidence to support its engagement with, and influencing of, the IASB's intangibles research and highlight opportunities to embed principles-based solutions in future international standard setting.

12To complement the current UKEB case study-based research, the UKEB could:

1. continue to develop a detailed understanding of what information is most useful through engagement with UK stakeholders, including users of financial information;
2. develop a conceptual, principles-based framework to support standard-based solutions to address current accounting challenges with intangible assets; and
3. consider potential connectivity issues with IFRS Sustainability Disclosure Standards.

Carbon and Other Environmental Credits (Question 2 above)

13In response to feedback on the IASB's Third Agenda Consultation, the IASB added a Pollutant Pricing Mechanisms (PPM) project to their reserve list. Since then, the prevalence of these schemes and the diversity in practice, in accounting for them, has increased.

14The IASB met, in January 2025⁷, to discuss whether to promote a project on PPMs from its reserve list to its Workplan. The IASB decided to defer the decision until the Fourth Agenda Consultation, which has since been postponed by a year.

15The UKEB's engagement with this project to date has been limited but included participation in an IASB PPM survey in March 2024⁸. The UKEB provided the IASB with a summary view of the type of schemes, examples of financial statement disclosures and the range of accounting treatments used in the UK and encouraged the IASB to activate the project.

16PPMs or Carbon and Other Environmental Credits are expected to play an important role in managing UK companies' efforts to address climate change and the transition to a net zero economy. Appropriate accounting plays a key role in providing decision-useful information about these items to users of financial statements.

17In anticipation of the IASB activating a project on PPMs and given the deferral of the IASB's Fourth Agenda Consultation, the UKEB could undertake descriptive research. This could focus on identifying the extent and nature of Carbon and Other Environmental Credits utilised by UK listed companies, and the different accounting treatments adopted. The research could also explore stakeholders' views on potential connections with the financial statements, in relation to carbon credits disclosures required under IFRS S2.

18This work would provide an evidence base to support future Board discussions. Even if the IASB does not undertake a standalone project, the evidence gathered would be useful to future discussions on intangible assets and provisions.

19To complement the IASB considerations, the UKEB could:

1. document the range of environmental credit schemes in the UK, the extent and nature of financial statement disclosures and the range of accounting treatments adopted in listed entities;
2. consider potential principles-based accounting treatments for environmental credits; and
3. assess any potential connectivity implications on the financial statements from carbon and environmental credit disclosure requirements in IFRS Sustainability Disclosure Standards.

Fundamental gaps or issues in IFRS Accounting Standards (Question 3 above)

20UKEB discussions in June 2025⁹ on its approach to the IASB's Fourth Agenda Consultation noted an opportunity to take a wide view across the IFRS Accounting Standards to identify any significant current or emerging issues that are inadequately addressed or not addressed at all. This project would be an opportunity to consider principles-based, as opposed to narrow-scope, solutions to these challenges.

Thank you for completing this Invitation to Comment

Please submit this document by close of business on Friday, 6 February 2026 to: [email protected]

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