Response 4 - Grant Thornton

Deadline for completion of this Invitation to Comment:

Close of business 18 November 2021

Please submit to: [email protected]

Introduction

The objective of this Invitation to Comment is to obtain input from stakeholders on the endorsement and adoption of a set of six Amendments to international accounting standards published by the International Accounting Standards Board (IASB) in May 2020, with an effective date of 1 January 2022 with earlier application permitted, (the ‘May 2020 Amendments’).

The May 2020 Amendments are comprised of three Annual Improvements amendments (from the IASB's Annual Improvements to IFRS® Standards 2018-2020) and three Narrow-Scope amendments.

The Annual Improvements amendments covered in this assessment are:

• Amendments to IFRS 1 First-time Adoption of International Financial Reporting Standards—Subsidiary as a First-time Adopter.
• Amendments to IFRS 9 Financial Instruments—Fees in the '10 per cent' Test for Derecognition of Financial Liabilities.
• Amendments to IAS 41 Agriculture—Taxation in Fair Value Measurements.

The Narrow-Scope amendments covered in this assessment are:

• Amendments to IAS 16 Property, Plant and Equipment—Proceeds before Intended Use.
• Amendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets—Onerous Contracts—Cost of Fulfilling a Contract.
• Amendments to IFRS 3 Business Combinations—Reference to the Conceptual Framework.

UK endorsement and adoption process

The requirements for UK endorsement and adoption are set out in the Statutory Instrument 2019/685¹.

The delegation of the powers to formally adopt international accounting standards for use in the UK was delegated to the UK Endorsment Board in May 2021².

The information collected from this Invitation to Comment is intended to help with the endorsement assessment. This will form part of the work necessary for potential UK endorsement and adoption of the May 2020 Amendments.

Who should respond to this Invitation to Comment?

Stakeholders with an interest in the quality of accounts that apply IFRS.

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 to [email protected] by close of business on 18 November 2021.

Brief responses providing views on individual questions are welcome, as well as comprehensive responses to all questions.

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 endorsing 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)³.

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 UKEB with an unsigned version of your submission. The UKEB prefer 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 document submitted; therefore, only information that you wish to be published should be submitted in such responses.

Part B: Assessment against endorsement criteria

Our initial assessment concludes that:

• the May 2020 Amendments meet the criteria of relevance, reliability, comparability and understandability required of the financial information needed for making economic decisions and assessing the stewardship of management, as required by SI 2019/685 (see Regulation 7(1)(c));
• application of the May 2020 Amendments is not contrary to the principle that an entity's accounts/consolidated accounts must give a true and fair view as required by SI 2019/685 (see Regulation 7(1)(a));
• that the May 2020 Amendments are likely to be conducive to the long term public good in the UK as required by SI 2019/685 (see Regulation 7(1)(b)), including that:
  • will generally improve financial reporting;
  • will lead to benefits that exceed the costs; and
  • is not likely to have an adverse effect on the economy of the UK, including on economic growth.

Our assessment of each of the Annual Improvements amendments is set out in Appendix 1 of this DECA in the pages indicated below:

Our assessment of each of the Narrow-Scope amendments is set out in Appendix 2 of this DECA in the pages indicated below:

1Do you have any comments relating to our description of ‘not contrary to the true and fair view requirement' in paragraph 16 of the DECA?

No comments

2Do you agree with these assessments against the technical criteria? (please select one option)

Yes [ ] No [X]

3Please include any comments you may have in response to question 2:

N/A

4Do you agree with these assessments against UK long term public good? (please select one option)

Yes [ ] No [X]

5Please include any comments you may have in response to question 4:

N/A

Thank you for completing this Invitation to Comment

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