Adam Deller is a financial reporting specialist and lecturer



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The ‘Meet the Experts’ conference held in November was another chance for financial reporting specialists to hear about the significant projects on the horizon. This conference had a significant focus on sustainability-related reporting but also gave an update on other financial reporting developments.

Andreas Barckow, the chair of the International Accounting Standards Board (IASB), discussed the board’s activities in his keynote address. These included the potential for three new IFRS Standards to be issued, an update on some ongoing projects and information on others that are to be discontinued.

Two new IFRS Standards are expected to be issued in the first half of 2024

On the horizon

The first, and perhaps most significant, is IFRS 18, Presentation and Disclosure in Financial Statements. This is covered in more detail in my earlier articles ‘Replacement plans for IAS 1’, and ‘Preparing for IFRS 18’ but the major changes will be to the statement of profit or loss. It will include three defined categories (operating, investing, financing) and two required subtotals (operating profit, profit before financing and tax).

There is also further guidance on the use of management performance measures and when information can be aggregated or disaggregated.

The second potential standard (expected to become IFRS 19) relates to subsidiaries without public accountability: disclosures. This is aimed at reducing the disclosures for subsidiaries without public accountability, particularly in complex areas such as leases or share-based payments.

Both of these new IFRS Standards are expected to be issued in the first half of 2024. The larger impact will certainly be from IFRS 18, which will be effective for accounting periods beginning on or after 1 January 2027.

It is not feasible to produce a calculation that will solve the ‘too little, too late’ problem

The final of the proposed new standards is on rate-regulated activities. It looks at the timing differences that arise between a regulated rate (where a company can charge customers for compensation for goods or services provided) and the period those costs are included. This proposal is likely to become IFRS 20 and is planned to be finalised in late 2024, replacing IFRS 14, Regulatory Deferral Accounts.

Ongoing projects

One of the biggest ongoing projects is the snappily titled Business Combinations: Disclosures, Goodwill and Impairment project. As discussed previously in AB, this is no longer a project that is looking to improve the impairment calculation or suggesting a move to amortisation.

The board has accepted that it is not feasible to produce a calculation that will solve the ‘too little, too late’ problem and has moved towards enhanced disclosure requirements about business combinations.

Work is ongoing regarding ‘climate-related and other uncertainties in the financial statements’

The current proposals look at additional disclosures, including a distinction between strategic and non-strategic business combinations with differing levels of disclosures on each. An exposure draft on this is expected around March 2024.

Work is also ongoing regarding ‘climate-related and other uncertainties in the financial statements’. This is not intended to be a significant project that replicates or replaces any part of IFRS S2 (see previous AB coverage). This is just a narrow scope project, exploring the development of illustrative examples and targeted amendments to improve disclosures.

Research projects

Two major research projects are likely to be started in 2024. Both have the potential to be significant projects that could result in significant IFRS Standards if they are fully examined. The first of these, on intangible assets, has been discussed many times and is likely to be a large and complex process.

The second of these is the statement of cashflows. (I’ll look at this in more detail next month.) When asked during the conference about what the problem with cashflows was, Barckow suggested that the IASB will create an inventory of responses and devise a priority list from there. His thoughts are that this may involve more targeted amendments than issuing a new replacement for IAS 7, Statement of Cash Flows.

The work on extractive activities and businesses under common control is being stopped

It is interesting to note that two of the external panellists during the conference were against this and believed that this may be a standard requiring a significant overhaul. The potential concerns around IAS 7 will be picked up in a future article.

End of the line

With these new areas being explored or issued, there are some projects that have come to the end of their life. The work on extractive activities is being stopped, as is the work on businesses under common control. While both contained some reasonable ideas, the board is prioritising its resources and felt that these would be better utilised elsewhere.

The work on management commentary has not been ceased, but the board is waiting for the results of consultations undertaken by the International Sustainability Standards Board.

Watch and learn

Watch Adam Deller’s series of videos explaining the fundamentals of IFRS Standards