Every five years, the International Accounting Standards Board (the Board) takes a fresh look at its agenda – in consultation with all stakeholders – to confirm that it has set the right priorities and struck a balance in its activities to keep IFRS Standards fit for purpose.
The Board has published a Request for Information (RFI) outlining its vision for the 2022–2026 agenda and seeking stakeholder views on:
- the strategic direction and balance of its activities;
- its criteria for assessing priorities; and
- the financial reporting issues to prioritise over the next five years.
The latest global challenges, including the COVID-19 pandemic and climate change, have shifted the focus from familiar financial reporting matters and may re-shape the Board’s 2022–2026 agenda.
Strategic direction – Shifting the focus
The RFI focuses on the Board’s primary activities – i.e. setting and maintaining financial reporting standards. In tandem, the IFRS Foundation Trustees are addressing calls for a new international sustainability standards board. This could impact the scope of the Board’s work going forward, especially on cross-cutting matters related to sustainability reporting.
Setting the priorities – Key drivers
In setting its priorities, the Board focuses on investors’ needs and considers:
- the matter – its importance to investors and any existing reporting deficiencies, its pervasiveness and the type of companies affected;
- the solution – the complexity and feasibility of possible solutions and interaction with other projects; and
- the resources – the capacity of the Board and stakeholders to progress the project.
Assessing the priorities will be a matter of judgement and the relative importance of any particular criterion.
Potential ‘to do’ list
To diagnose common financial reporting issues more accurately and focus on those that really matter, the Board conducted an outreach in developing the RFI. Based on the results, the Board identified the following potential projects to put on its ‘to do’ list, offering alternative options. The list is not exhaustive and does not represent a draft work plan – its purpose is to elicit more focused feedback.
| Potential projects | |
|---|---|
| 1. Borrowing costs | 12. Income taxes |
| 2. Climate-related risks | 13. Inflation* |
3. Commodity transactions |
14. Intangible assets |
| 4. Cryptocurrencies and related transactions | 15. Interim financial reporting |
5. Discontinued operations and disposal groups* |
16. Negative interest rates |
6. Discount rates |
17. Operating segments |
7. Employee benefits |
18. Other comprehensive income |
8. Expenses: inventory and cost of sales |
19. Pollutant pricing mechanisms* |
9. Foreign currencies |
20. Separate financial statements |
10. Going concern |
21. Statement of cash flows and related matters |
11. Government grants |
22. Variable and contingent consideration* |
* These projects were identified as priorities in the previous agenda consultation but are currently inactive. |
|
Have your say
The agenda consultation provides a unique opportunity for all stakeholders to steer the Board’s direction.
Questions to be considered include the following.
- Has the Board identified the right priorities and struck a balance in its activities to keep IFRS Standards fit for purpose considering the latest challenges, including the COVID-19 pandemic and climate-related matters?
- Should the Board have a fresh look at some old standards – e.g. those dealing with intangible assets, government grants and going concern?
- Should the Board consider a broader agenda and focus on non-financial matters, as non-financial information becomes increasingly important to investors and corporate decision-makers?
Read the Request for Information and provide your comments to the Board by 27 September 2021.
* Read our comment letter (PDF 239 KB) to learn more about the KPMG position.
You may also find our Sustainability reporting pages articles helpful, as these also address the IFRS Foundation consultation on setting up an international sustainability standards board to complement the IASB Board.
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