Response 1 - ICAEW

ICAEW REPRESENTATION 31/24

Issued 25 March 2024

ICAEW welcomes the opportunity to comment on the Draft Endorsement Criteria Assessment (DECA) of Lack of Exchangeability - Amendments to IAS 21 published by UK Endorsement Board on 5 February 2024, a copy of which is available from this link.

For questions on this submission please contact the Corporate Reporting Faculty at [email protected] quoting REP 29/24.

ICAEW supports the UKEB DECA: Lack of Exchangeability - Amendments to IAS 21, effective on or after 1 January 2025 with earlier application permitted.

This response of 25 March 2024 has been prepared by the ICAEW Corporate Reporting Faculty. Recognised internationally as a leading authority on corporate reporting, the faculty, through its Financial Reporting Committee, is responsible for formulating ICAEW policy on financial and non-financial reporting issues and makes submissions to standard setters and other external bodies on behalf of ICAEW. The faculty provides an extensive range of services to its members including providing practical assistance with common corporate reporting problems.

ICAEW is a world-leading professional body established under a Royal Charter to serve the public interest. In pursuit of its vision of a world of sustainable economies, ICAEW works with governments, regulators and businesses and it leads, connects, supports and regulates more than 166,000 chartered accountant members in over 146 countries. ICAEW members work in all types of private and public organisations, including public practice firms, and are trained to provide clarity and rigour and apply the highest professional, technical and ethical standards.

© ICAEW 2024 All rights reserved. This document may be reproduced without specific permission, in whole or part, free of charge and in any format or medium, subject to the conditions that: * it is appropriately attributed, replicated accurately and is not used in a misleading context; * the source of the extract or document is acknowledged and the title and ICAEW reference number are quoted. Where third-party copyright material has been identified application for permission must be made to the copyright holder.

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The Institute of Chartered Accountants in England and Wales (ICAEW) incorporated by Royal Charter (RC000246) Registered office: Chartered Accountants' Hall Moorgate Place London EC2R 6EA UK

KEY POINTS

1ICAEW supports the UK endorsement of the IASB's amendments to IAS 21 Lack of Exchangeability issued in 2023.

2This response of 25 March 2024, included in the appendix below, has been prepared on behalf of ICAEW by the Corporate Reporting Faculty.

APPENDIX – DETAILED RESPONSE

Invitation to Comment

Call for comments on Draft Endorsement Criteria Assessment of Lack of Exchangeability (Amendments to IAS 21)

Deadline for completion of this Invitation to Comment:

Close of business, [Monday 6 May 2024]

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 Lack of Exchangeability (Amendments to IAS 21) (the Amendments), published by the International Accounting Standards Board (IASB) in August 2023. The Amendments aim to clarify the requirements for assessing exchangeability, the exchange rate to use when there is a lack of exchangeability and the related disclosures. The Amendments aim to address diversity in practice and improve the usefulness of the information provided to the investors. The Amendments will be effective for annual periods beginning on or after 1 January 2025. Earlier application is permitted. The information collected from this Invitation to Comment is intended to help with the endorsement assessment.

UK endorsement and adoption process

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

The powers to formally adopt international accounting standards for use in the UK were delegated to the UK Endorsement Board in May 2021².

Who should respond to this Invitation to Comment?

Stakeholders with an interest in the quality of accounts prepared in accordance with IFRS Accounting 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 [Monday 6 May 2024].

Brief responses to 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 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)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 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.

Assessment against endorsement criteria

Our draft assessment [tentatively] concludes that:

1. the Amendments meet the criteria of relevance, reliability, understandability and comparability 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));
2. application of the Amendments is not contrary to the principle that an entity's accounts must give a true and fair view as required by SI 2019/685 (see Regulation 7(1)(a)); and
3. that the 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)), having considered: * whether they will generally improve the quality of financial reporting; * the costs and benefits that are likely to result from their use; and * whether they are likely to have an adverse effect on the economy of the UK, including on economic growth.

Our assessment of the Amendments is set out in Section 2 of the DECA.

Questions

Technical accounting criteria assessment

Do you agree with the draft assessment of the Amendments against the technical accounting criteria? (please select one option)

Comments: No comments

True and fair view

Do you agree with the draft assessment that the Amendments are not contrary to the true and fair view requirement? (please select one option)

Comments: No comments

UK long term public good

Do you agree with the initial overall assessment of costs and benefits likely to arise from the Amendments? (please select one option)

Comments: No comments

Do you agree with the draft assessment that the Amendments are likely to be conducive to the long term public good in the UK? (please select one option)

Comments: No comments

Thank you for completing this Invitation to Comment

Please submit this document by close of business on [Monday 6 May 2024] to: [email protected]

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