Third Agenda Consultation

Introduction

The IASB’s Request for Information for it's Third Agenda Consultation was published on 30 March 2021, with a comment period to 27 September 2021.

UK Endorsement Board outreach

The UKEB secretariat seeks input and feedback from UK stakeholders as the UKEB secretariat develops its response to the IASB

IASB’s agenda consultation objectives

IASB’s objective for the agenda consultation is to seek formal public input on:

  1. the strategic direction and balance of activities and work plan
  2. the criteria used to decide whether potential projects are added to the work plan
  3. financial reporting matters which should be given priority by the board

The feedback received will be used to inform IASB’s 2022–2026 work plan.

Strategic direction and balance of activities and work plan

IASB’s agenda consultation will ask respondents to comment on the balance of its activities across six main categories:

  1. New IFRS and major amendments
  2. Existing IFRS – maintenance and consistent application
  3.  IFRS taxonomy
  4. IFRS for SMEs
  5. Understandability
  6. Accessibility

Criteria used to decide whether potential projects are added to the work plan

The criteria used by IASB to decide whether potential projects are added to its work plan are set out in its Due Process Handbook and are:

  1. The importance of the matter to users
  2. Whether there is a deficiency in the way particular types of transactions or activities are reported in financial statements
  3. The types of entities likely to be affected by any proposals, including whether the matter is more prevalent in some jurisdictions than others
  4. How pervasive or acute a particular financial reporting issue is likely to be for entities

In addition, in practice the IASB also considers:

  1. Complexity and feasibility
  2. Available capacity
  3. Interaction with other projects on the work plan

Financial reporting matters which should be given priority by the board

The IASB will include 22 potential projects in its agenda consultation.  Respondents will be asked to rank them as low, medium or high priority. 

The agenda consultation will also ask respondents if there are other financial reporting matters that should be considered. 

Topics expected to be included in IASB’s agenda consultation request for information

  1. Borrowing costs - Review definition of borrowing cost and qualifying asset in IAS 23
  2. Climate-related risks and other emerging risks - Address any gaps in current requirements that may apply to recognition and disclosure of climate-related and other emerging risks
  3. Commodity transactions - Develop accounting guidance for commodity loan transactions and other transactions involving commodities
  4. Cryptocurrencies and related transactions - Develop accounting guidance for crypto-currencies and related transactions
  5. Discontinued operations and disposal groups* - Post-implementation review of IFRS 5
  6. Discount rates and related matters  Consider making requirements relating to discount rates consistent across all standards
  7. Employee benefits - Develop accounting requirements for hybrid pension plans; consider removing the prohibition on recycling of actuarial gains and losses presented in OCI
  8. Expenses - Develop an IFRS standard for cost of sales, using the principles of IFRS 15; develop detailed guidance on classification of expenses by function in profit or loss; develop enhanced disclosures about expenses, so users can distinguish between maintenance and growth expenditure
  9. Foreign currencies - Develop enhanced disclosures on foreign currencies and clarify the accounting for foreign currency derivatives
  10. Going concern - Develop enhanced disclosure requirements for the going concern assumption; develop accounting requirements for entities that are no longer a going concern
  11. Government grants - Revise accounting for government grants using principles from IFRS 15 and Conceptual Framework
  12.  Income taxes - Improve tax disclosures and develop accounting guidance for emerging types of taxes
  13. Inflation* - Assess whether it would be feasible to extend the scope of IAS 29 Financial Reporting in Hyperinflationary Economics to cover economies subject to only high inflation, without amending other requirements of IAS 29.
  14. Intangible assets - Review accounting for intangible assets, including the definition of intangible assets and inconsistencies between the treatment of acquired and internally generated intangible assets
  15. Interest rates - Develop accounting guidance for negative interest rates
  16. Interim reporting - Clarify the definition of an interim period and review IAS 34 for inconsistencies with other standards
  17. Operating segments - Review aggregation criteria and improve disclosures
  18. Other comprehensive income - Apply Conceptual Framework principles to the classification of income and expenses in OCI and recycling consistently across all standards
  19. Pollutant pricing mechanisms* - Consider addressing any diversity that may exist in accounting for pollutant pricing mechanisms (including emissions trading schemes).
  20. Separate financial Statements - Review of IAS 27 Separate Financial Statements; clarify the accounting in separate financial statements for some transactions between a parent and its subsidiaries; develop more effective disclosures.
  21. Variable and contingent consideration* - Consider how to account for variable and contingent payments for asset purchases outside of a business combination
  22. Statement of cash flows and related matters - Undertake a review of the presentation and disclosure of information about cash flows including information about factoring, supply chain financing arrangements, capital expenditure and cash flows linked to operating expenses; consider developing
  • a standardised definition of and disclosures about free cash flows
  • a separate statement of cash flows for financial institution

*Project is in IASB’s current research pipeline, as it was identified as a priority in the IASB’s previous agenda consultation.  However, work has not yet commenced on the project, so IASB is seeking views on whether these projects are still priorities.



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